Turning to returnables

From Motorola to Mack Truck, returnable containers are catching on.

By -- Modern Materials Handling, 6/1/2000

The cube is among the most basic of geometric designs. Its beauty for materials handling is an ability to fill a defined space with a maximum amount of product. While most containers used in materials handling follow the basic cube design, the applications for today's containers are anything but basic. Containers protect, store, ship, handle work-in-process, and accumulate orders.

In the past, cardboard containers alone handled most of these duties. But in recent years environmental and economic concerns have made returnable containers an alternative that makes sense.

"As corrugated costs increase, it becomes more justifiable to move to returnables," says Larry Porter, marketing manager for container manufacturer Buckhorn.

Each year the number of returnables in the marketplace increases, as they handle goods within facilities and also move products from one facility to another. One leading container manufacturer reports that its sales of plastic returnables rose 20% last year alone.

"Everybody has a situation where they have a part that needs to be stored or transported," says Ken Beckerman, product manager for Flexcon Containers. "People are seeing the advantages and financial payback in returnables."

And that recognition is coming from many different quarters. For instance, large collapsible containers are used by one manufacturer to transport parts from a Mexican supplier. Another supplier uses small custom-designed plastic totes to deliver parts directly to an automotive assembly line. Elsewhere, containers are designed not only to protect sensitive parts but also offer other benefits, such as discharging electrostatic energy that can damage critical components.

As a result of their versatility, returnables are widely used in delivery loops between companies as well as within the four walls of a single facility. Furthermore, these containers are playing a role in the e-commerce revolution. In short, it's tough to pigeon-hole containers by their design or their application.

Thrown into a loop

The most popular containers sold are those with attached hinged lids. When closed, they stack easily. When open, these containers are designed to nest within each other to reduce the amount of space required to store or transport them.

"You are paying extra for that lid, so usually they are used for applications that leave the facilities," says Peter Dunlap, industrial product line manager for Akro-Mils.

Lid-bearing containers are particularly suited for closed loop distribution systems in which the containers transport products from the supplier to manufacturer. The units are later returned to the supplier for reuse.

The automotive and food industries have been the leading proponents of large loop container systems. Already well established, use of returnables in these industries is actually increasing as manufacturers and food brokers force them further down the supply chain. Users in these industries often rely on container management services to provide them with leased units.

"You have to have a standard product though for this type of logistics program to work," says Porter. He adds that produce growers are leading users of managed loops because "an orange is an orange, whether it comes from California, Florida, or elsewhere."

Loops are not as common, however, once they extend to more specialized products and industries.

"Once you step beyond the established model, it is a constant missionary activity," adds Linpac's David Stewart. Like all good missionaries, Stewart finds new customers and applications for returnables every day.

"It used to be that we were looking for large customers with loops," he says. "Now we see the concept migrating down to smaller installations and shops as they develop their own shipping loops."

Often these loops are between a company's own facilities. Stewart says an example of this is an appliance manufacturer that transports electric motors, controls, and stampings in large collapsible containers to its own assembly facility.

These small loops tend to grow into larger loops.

"They are specialty-oriented when they begin," says Bill McMahon, director of new business development for Orbis. "Over time they may grow to become the industry standard. It usually just takes someone to lead the way."

McMahon adds that materials handling within facilities usually is the most efficient part of the supply chain. Major gains are made by eliminating bottlenecks that occur before goods enter a DC and after they depart. Returnables provide standardization, parts orientation, and labor reductions, all of which makes the loops in which they operate more efficient.

The relatively light weight of plastic returnables also is an advantage for shipping.

"So much is being shipped by air freight these days," says Matt Shuert, general manager of Shuert Industries. "Plastic weighs less and is more durable than other materials."

The push for just-in-time supply to the manufacturing line has had a major impact on the increase of returnable containers. Manufacturers no longer want to store parts within their facilities. Instead, their suppliers time the delivery of parts just as they are needed for assembly. Returnable containers are well suited to transport these goods directly to the lines.

Flexcon's Beckerman says he has one client that delivers a trailer load of product every day to a manufacturing customer. The trailer sits on the dock, with product pulled from it as needed. Each empty container is returned to the trailer where it is stored until the next day when a truck arrives with another full trailer. The delivery truck then returns the trailer holding the empties to the supplier.

"The client never has to store the product. It just stays on the loading dock," adds Beckerman.

Loops are not restricted to manufacturing alone. Companies also use them for internal distribution. The Pep Boys automotive chain developed a closed loop for delivering auto parts and accessories to its retail stores. Plastic totes with lids transport goods to each store where items are sequenced for an individual aisle.

Likewise, any containers that can be adapted for use on store shelving or retail floor space provide savings.

"Anything that is display-ready really cuts labor at the store level," says McMahon.

Let's mix it up

Traditionally a pallet load of cartons was composed of only one type of product. That is no longer the case. Nevertheless, companies that ship full pallets save money.

Today's plastic containers come in various sizes designed to cross-stack into a pallet cube. Many containers also come in a variety of colors. Each color may designate one product or stock keeping unit found on the pallet. This makes it easier to sort once the load arrives at its destination. Cross docking of such product is also becoming more prevalent.

However, this often requires custom returnable containers.

"More and more we find people want a tailored solution," says Flexcon's Beckerman. "There is a huge swing towards meeting the customer needs rather than simply offering a product line that the customer has to fit into."

Sometimes this means designing a complete custom container, other times it means adapting the dunnage within the container's interior to create a tight product fit.

Beckerman recently sold containers to Groceryworks.com , an online grocer in the Dallas area. Three types of containers transport goods directly to a shopper's home. Each uses a standard size that holds two grocery bags. Dry goods are placed in one and the other two are designed with insulation and dry ice pockets to keep foods either frozen or refrigerated for up to ten hours.

Returnables are also a mainstay within distribution centers, where the loop they make is limited to the four walls of the facility.

Large bulk containers may be used for storage, such as those used by an electric utility to store electric meters. The containers are easily pulled and taken to job sites as needed.

The square shape of most containers is an additional benefit to storage applications.

"When stacked, containers take advantage of the cubic rather than the square footage of a facility," says Linpac's Stewart. "Everybody is concerned with conserving space. Much of what is available can be found by looking up at cubic space."

Solid stacking also provides improved warehouse safety.

"I have had a number of customers who buy containers for the safety advantages," says Shuert. "They want the ability to safely stack our bulk containers five high in the warehouse."

Other ideas

There are other uses for containers within facilities as well. They are used for product picking, where each container represents a customer order. The container passes from one picking zone to another until the order is full. Reusable containers provide consistency and are compatible with conveyors, sorters, and other material handling equipment.

E-commerce distribution operations have also been an emerging market for containers.

"They often have a lot of money to invest in automation and their timeframe is short," says Jill Paull, marketing communications manager for Orbis, who adds that returnable containers provide a ready solution to these customers.

Containers are also used for kitting of parts. A boiler manufacturer uses them to hold field-installed parts until units are ready to ship. Likewise, a power tool company regularly changes its production lines, on each occasion losing valuable time searching for the needed parts for the changeover. Now, parts are kitted into containers to make for an efficient transition.

Another benefit of returnables is their trackability. Most container lines contain convenient space for a bar code label that can easily be read by hand or fixed scanners.

Radio frequency identification (RFID) is also seeing limited use. Tags can be attached or imbedded directly onto containers.

"You can put a dictionary on an RFID tag. It holds thousands of time the product data of a bar code tag," explains Robb Clarke of Michigan State's school of packaging. He says that a container's entire history can be stored on such tags.

Built like a Mack truck

Mack Truck has a reputation for building vehicles that are practically indestructible. The same could be said of the new returnable steel containers the company bought to deliver instrument panels to its assembly line.

"The instrument panel is an appearance item," says Bernie Vercillo, senior packaging engineer at Mack Truck. "It should be aesthetically perfect when the truck leaves the plant, free from any defects."

Ensuring that these panels remain in pristine condition is not easy considering the rough environments of shipping and manufacturing. The panels are supplied by Consolidated Metco in Bryson City, N.C. and sent by freight to the Mack assembly plant in Winnsboro, S.C.

Previously, corrugated cartons with a great deal of foam dunnage were used to ship the panels, but only two panels could be held at a time in the 72 X 48 X 24 in. cartons. The new steel containers (Steel King, 800-553-3096, www.steelking.com) hold six units in a 88 X 48 X 50 in. space. The greater shipping density has saved on shipping charges, plus eliminating the corrugated materials has saved on disposal and the labor required to unpack the cartons and stage them at the line.

Since going to the new container Mack has saved $34 on each panel it ships. Return on investment has been a short two months.

"We have had tremendous savings with this container," says Vercillo. "Since we ship highly sensitive parts the old packaging and materials costs were excessive."

Mack has been using the containers for only a year for shipping panels for its new line of Vision over-the-road trucks and currently has 105 containers in its returnable loop. Another 102 containers have just been purchased for the Keystone model truck line. Eventually, the new instrument panels will be used in 75% of all trucks Mack builds, and will also house parts bound for Mack's Macungie, Pa assembly plant.

The containers are delivered just in time to the assembly line with only about ten days of float built into the loop system. They are not only designed to protect the parts during shipping, but also act as a workbench to allow for sub-assembly work to be done on the parts when they arrive at the line. Every housing, for example, has different drilling options that are best performed just prior to installation. Work is done on the panels while they are still inside the walk-in containers.

"There is less chance of the product hitting something and being damaged that way," adds Vercillo.

The container holds the panels at each end where foam padding cushions the four contact points. Such little contact further reduces the risk of scratching or marring the finish during shipping. The parts are also oriented in the cases to the proper position in which they will be assembled in the trucks.

The containers additionally provide four-way entry, which has eliminated the pallet that was required with the previous shipping cartons. The rugged construction also means that these containers are low maintenance.

"The containers have accomplished everything we wanted in a shipping rack and more," says Vercillo. "Our supplier also loves them and we have had very positive reactions from our line workers."

Motorola's cellular connection

As a world leader in cellular technology, Motorola demands precise manufacturing for its electronic components and cell phones. Sturdy containers are required to transport work in process and completed phones within and between facilities. The containers not only protect the components, but must also be compatible with automated equipment, storage systems, and robotic assemblers.

Motorola selected pre-form trays (Orbis, 888-217-0965, www.orbis-menasha.com) designed to fit snuggly into two types of transport totes. The system replaces corrugated trays Motorola had used previously.

"We were using cardboard containers that held two thin plastic trays that nested on top of each other," explains Pete Rohlwing, technical operations engineer at Motorola's Harvard, Ill. facility.

Rohlwing says the old containers would not fit within the totes and were not sturdy enough to work alone with the conveyor system. They additionally lacked the precision positioning required for automated picking.

Dust and contaminants common to cardboard products were also a hindrance to the manufacture of the company's precision electronic components. The new trays solved this problem as well. They are cleaner, stack easier, are more durable, and can be tracked easily within the facility.

"Each tray has a unique bar code label, so we can record serial numbers of the phones and match them to the trays, and then the trays to the totes," adds Rohlwing.

Picking accuracy with the robotic assembly machines has also increased, providing improved cycle times in both assembly and packaging areas.

The trays are also designed to accommodate several models of phones, whereas a different corrugated tray had been needed before for each type of phone.

Two totes models, also made by the tray supplier, are used to transport the trays. Typically, five trays can stack within each tote. One model is designed for in-house movement of goods from manufacturing to distribution and is compatible with Motorola's transceiver carousel. The carousel stores totes filled with completed phones until they are sent to a packaging station to fill customer orders. The carousel also holds empty trays and totes until needed in another location.

The other tote model transports trays full of finished phones from other assembly facilities to Illinois for final packaging.

"We started using the trays in Harvard. Then once we took them of site, they fit right into the process," says Rohlwing. "Right now we are shipping the totes back and forth between Florida, North Carolina, and Mexico. The trays and totes travel well and are freight ready."

Rowling says Motorola now has about 220,000-250,000 trays in its system, and after two years of use they have held up well. "They are very durable," he adds.