The power of returnable containers
Whether you move products across country or merely across the shop or warehouse, returnable containers provide extra inventory protection and optimize space use.
By David Maloney -- Modern Materials Handling, 7/1/1999
If Michael McGrath of Daimler-Chrysler could have his way, all parts shipped to, from, and within his company's 18 North American assembly plants would be in a returnable container.McGrath, manager of mini-van platform materials handling, says that millions of returnable containers of all shapes and sizes are now in use within the automaker's closed-loop system. They protect everything from seats and roof panels to transmissions and small parts.
DaimlerChrysler's suppliers receive specific containers for each type of part. They fill and transport them directly to the manufacturing assembly line where their contents are assembled into a mini-van, truck, or a sedan. Empty containers then cycle back to the suppliers to be filled again.
Returnables especially make economic sense for companies and supply chains that use the same types of materials over and over again. They can be tailor-made to fit a number of specifications including size and shape. Returnable containers not only protect products during movement but optimize space during shipping by standardizing the shape and size of shipping units.
In addition, returnables are good for the environment. They eliminate the cardboard waste that many industries had literally been throwing away.
While the vast majority of returnable containers are still used within plants and warehouses, they are increasingly being used across many segments of the supply chain. DaimlerChrysler is one example. Meanwhile, the grocery industry is in the early stages of using returnables from the field to the store and back again.
All types for all uses
As a result of the diversity of potential applications, these containers come in a multitude of shapes, sizes, and materials. Whether they are made of plastic or wood, wire mesh, steel or aluminum, returnables are the basic tools of a wide range of materials handling operations.
"There is a real variety of containers out there," says Mike Ogle, Ph.D. from the Material Handling Institute. He notes they range from extended bulk sizes that hold literally a ton of materials to small bins designed for the tiniest of parts, such as electronic components. Daimler-Chrysler alone uses 1,500 different container types.
Beyond materials and sizes, returnables are available in a wide range of configurations. These include stackable models that allow containers to be placed on top of each other when filled with parts. Another characteristic is whether containers are nestable--do they fit inside each other when empty, minimizing space requirements when traveling to the next fill point.
The table in this story identifies leading suppliers of returnable containers and their offerings by materials and other characteristics.
Many returnables today stay within the four walls of plants and warehouses. Various types of bins and totes are designed to hold product during stock replenishment and picking processes. These containers are typically re-used hundreds of times during their productive life-span. Not only do they protect products during in-house transit, but they also provide a certain degree of uniformity to handling operations.
Today's containers can be stacked snuggly to fit pallet loads, they can be easily lifted by workers using ergonomic handle designs, and they provide containment for products being transported by conveyors.
Supply chain returnables
Beyond the four walls of plants and warehouses, automotive is not the only leader. Another innovator is the grocery industry.
Today, fruits and vegetables at about 100 growers are picked directly into plastic containers rather than cardboard boxes in orchards and fields. From there, they are transported to distribution centers and eventually to local grocery stores. Some stores have been equipped with display racks to hold the containers within the produce aisle. Customers choose their fruits and vegetables directly from them.
"A stronger container gives better handling, better cooling, and less product damage," says Ron Margulis of Chep, a leading supplier of leased containers and closed-loop container management systems. "When you look at plastics versus cardboard, it is not just selling a box to go into the supply chain, but is selling a concept for the future. It is really a process."
"People at retail like buying from the containers," says Margulis. "They are seen as cleaner than cardboard boxes, they provide less product shrinkage and damage and are overall more appealing."
Once the containers are emptied, they go back to the grower for re-use. Chep says it currently has over a million units in use. Magulis says they find the sturdier plastic containers more economical than cardboard, while they also protect produce better.
For all of their benefits, returnable containers that move through the entire supply chain do introduce one set of management factors that are certainly not a consideration with disposables. How does a company know where its returnables are at any given point? How can it manage their movement so that there are enough containers at the right spots at the right time?
Interestingly enough, answering these questions actually gives a company a better understanding of its supply chain flow.
Container and Pallet Services (CAPS), another supplier of leased, returnable containers, recently released a Web-based software system that manages, tracks, and identifies supply problems with returnables over the Internet.
"The key is tracking productivity of a given returnable. You want to know how often it is just sitting there," says Jennifer Bronson, of CAPS. "The goal is to help customers maintain visibility across their supply chain."
Clearly, returnable containers are here to stay. After all, McGrath of DaimlerChrysler is far from the only person who would like to see returnable containers used for 100% of parts movement.
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