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03/01/2018

When Does Returnable Packaging Make Sense?

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We've covered the benefits of returnable packaging in our Handling of Expendable Packaging vs. Returnable Packaging post. Citing that corrugated plastic is durable, reusable, and moisture resistant. We then went further and stated the benefits of returnable packaging also include a reduction in overall shipping costs, safer delivery, and fewer workplace injuries. So we have provided you with the benefits -  but when does it make sense for you to convert to returnables if you are currently using expendables? When is the application the right one and is there a closed loop system in place? Will you receive your desired ROI when you convert? All of the previous questions come into play when your organization is in the process of making the decision to convert to returnable packaging. Afterall, we want what is best for you and if our product doesn't make sense for your application or logistical environment - then we'll help you understand what that means so you have the best outcome possible for your packaging needs. 

Have you been wondering if converting to returnable packaging would make sense for your supply chain? Well, let us help you take a closer look at some ways you can make that determination. 

One of the first questions you can ask is: 
Will the cost difference between expendable packaging and returnable packaging give you your desired ROI? 

That is one of the reasons why we are here - to assist you in making this decision. We provide a savings calculator on our website to help you determine this. Some of the factors that come into play are the following: 

  • How many expendable boxes or containers do you use per year?
  • What is the average cost per expendable box?
  • What are the additional costs for tape, banding, shrink wrap and miscellaneous materials?
  • How many hours per year are spent assembling packaging, if any? 
  • What are some of the additional costs? Pertaining to product damage (caused by exposed staples, split boxes, general lack of protection, water contamination, etc.)
  • What are the storage costs associated with packaging materials?
  • What is the total quantity of plastic containers required to replace disposable/limited trip system?
    • Take into account the following:
      • Number of containers packed each day
      • Number of containers collected at a time
      • Frequency of collection
      • Time to unpack and return containers (days)
      • Shrinkage @ 2% per year
      • Buffer stock for seasonal peaks, if any

Our savings calculator analyzes all of your answers for the above list and provides you with how much time it will take to pay back your investment in returnables. This number can be the start to help you decide if you should convert to returnable packaging. However, it has been a lot of our customer's experience that the initial expense is soon absorbed, often ahead of projected times as companies find additional uses for their plastic containers. Furthermore, containers habitually out-live their projected life-span by many years. That is where our sales engineers come in. They will have a conversation with you and review questions like those on our Project Discovery  An assessment of your product and the logistical process you have in place are highly important in this decision making process as well. This brings us to the next component of consideration - the closed loop system.

Is your packaging from point A to point B, then back to point A to be refilled to go back out to Point B? Returnables work very well when the closed loop system is in place. As soon as a regular circuit between a shipment location and a delivery location is identified, returnable packaging enables a considerable reduction in expenditure and an improvement in short or medium-term profitability. When you think about returnable packaging, think of it in such a way that you are making an investment. It will be used for many years to come and be utilized over and over again.  

We are your returnable packaging resource. Part of what this means is that we help your organization decide if returnables are right for your application, logistical environment, and for your product protection. Our website will get you moving in the right direction and our team will aid you in the final steps of making this decision. 

Utilize our savings calculator, take a look and fill out our Project Discovery, and give us a call. We will move solutions forward for you. 

 

 

 

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