Returnable and reusable containers and totes have long been key to effective parts management. But now, demand is building as more and more managers realize the potential to improve handling ergonomics as well as trim costs and improve efficiencies in automated systems and global supply chains. There's even talk of intelligent totes and containers playing a role in the future.

"The lowly tote or container flows through the entire supply chain," says Bob Klimko, director of market development for Wilbert Plastic Services (608-742-5303). "It may not be the end all, but it is an enabler of supply chain efficiency and optimized transportation. Use it properly, and the right container can help reduce operating expenses."

Much of the new demand is from current customers ordering more of the same totes and containers they are already using. In addition, new users are looking to cash in on the use of returnable and reusable plastic containers and totes.

"We are not seeing requests for new designs as much as we're seeing more volume of the products we've always offered," says Ken Beckerman, product manager, Flexcon Container (973-467-3323). "And it's not just us—our competitors are seeing an upswing in activity too, which we think is a big deal for this industry."

While demand is up, so is the cost of raw materials. That is putting pressure on container manufacturers to keep prices down but profits up. "Everyone in this industry is reeling," says Warren MacDonald, vice president, sales and marketing, Linpac Materials Handling (502-863-5500).

One result of price pressures is a consolidating market. "Before you would go to one company for pallets, someone else for bulk containers, and a third company for little totes," says MacDonald. "Now a customer can come in and do one-stop shopping for all of those products."

But look beyond the price of totes and containers, and you'll find there are several other trends influencing what's being used and where.

One of the most important trends is the expanding use of automation, especially automated storage and retrieval systems (AS/RS), carousels, vertical lift modules, conveyors and robotics in North America.

As these automated systems are used more widely, demand for quality containers manufactured under strict tolerances expands too. "When you're working in an automated environment, you have to manufacture to much tighter specifications," explains Deb Salemi, product manager, Orbis (800-999-8683). "If you have warp from the sides or bottom deflection, the container might not ride on the conveyor, fit in a storage space, or get read by automatic scanners."

It's not just conveyors and automated storage systems that work in tandem with containers. More and more containers are being used with robotic handling systems. Here, the design of the container is determined by the way that parts are presented by the robot. "Our engineers have to understand the system's needs and limitations so that the robot's end effector tooling can handle the part without flaw," says Rick Parker, vice president and director of business development, Creative Techniques (248-373-3050).

While nestable, flip-top containers have traditionally been used in automated systems, collapsible containers are becoming a viable alternative, according to Dave McCulloch, vice president, packaging systems division, Schaefer Systems International USA (888-ssi-tote). "You're winning two ways with collapsible containers," says McCulloch. "For every one you send out full, you get four back for the same freight. That can save up to 20% on your freight costs. And if you store them before putting them back in a mini-load system, you save again."

Eric Fredrickson, market manager for material handling sector, IPL Products Ltd (800-818-1318) agrees. "Collapsible container technology is established in the produce industry," he notes. "But we think you're going to see a transition from nestable to collapsible containers in other distribution supply chains."

As supply chains go global, so do the totes and containers that are used to ship products. Users sourcing and shipping around the world are looking for ways to take cost out of those supply chains. Totes are playing a role.

"We recently did an automated storage system for Volkswagen in Mexico," says McCulloch. "To reduce costs, they wanted to use the same container in their AS/RS that their suppliers used to ship parts to the plant."

Schaefer was able to make minor modifications to two stock containers. To further save money, the AS/RS was designed to maximize space using that new container size.

Another trend is to provide reusable packaging solutions on a global basis. "To do that, we're looking at creating a broader return loop," says MacDonald of Linpac. "Just like the automotive companies are sourcing parts in China and India, we can offer a family of reusable packaging services in Europe, Asia, North America and South America."

To meet global shipping needs, for instance, Linpac is now offering an 8 foot by 8 foot by 8 foot plastic shipping container for the international movement of parts.

At the same time, totes are getting smaller and lighter to accommodate changing demographics in the work force and a heightened awareness of ergonomics.

"The automotive industry specifically is going to smaller and smaller totes," says Salemi of Orbis. "Part of that is ergonomics. But they're also replacing bulk boxes and large containers to minimize the amount of inventory at the line."

But the trend to smaller and lighter isn't always just about ergonomics. Companies are also looking at smaller containers to save on freight.

"For the last 24 months, customers have been asking us to change the heights of their containers so they can ship less air," says Suzanne Redding, national marketing manager, Buckhorn, a division of Meyers Industry (800-543-4454). "Instead of the traditional 12-inch high container, we're making containers in ranges from 9 to 11 inches high. An inch doesn't sound like a lot, but the potential freight savings can justify the cost of a custom container."

Today, information about inventory is as important as the inventory itself. And tote and container suppliers have gotten into that game.

"The customization of containers has gone beyond just size," says Buckhorn's Redding. "We're now being asked to supply containers with specific labeling and tracking requirements."

That might involve providing totes with bar code tags attached to the side of a container, or totes with active RFID tags used to monitor work in process during a manufacturing process.

It might also involve providing Web-based information about containers to all the participants in a supply chain that might use those containers. "An auto manufacturer recently asked us to create a database so their OEMs can find out what containers are approved for what products," says Redding. "The services around the containers are becoming as important as the containers themselves."

There is also nascent interest in using RFID for supply chain applications and not just tracking work-in-process. "Our retail customers are beginning to ask us what we're doing with RFID," says Salemi. "We don't have a customer yet because of the cost of the labels, but the question is being asked."

Users are also exploring whether RFID can be used to track and manage containers in closed-loop systems. "Industry has been looking for ways to find the leaks in the system where containers are lost and to increase utilization rates for years," says Fredrickson of IPL Products. "The technology, infrastructure and market interest are starting to converge."

Finally, just as companies are outsourcing their manufacturing and logistics operations to third parties, some users are looking to third-party providers to manage their totes and containers. "We'll own the asset, recover the container once the product inside is consumed, clean and repair it and then return it to the point of origin," says Bob Wiedmaier, CEO of Container and Pallet Services (734-542-9150). "Because we're managing the containers every day, we can typically size the fleet of containers needed to be smaller than a company could do on their own."

In other words, totes and containers are becoming an ever more integral aspect of handling inventory efficiently both within and outside the four walls of the plant and warehouse.

Click on the icon to read more about container applications. (Focus on totes and containers - September 2004)