At an estimated cost of between $800 million and $1.5 billion annually, the replacement of missing reusable packaging and pallets remains a nagging issue for the United States. Companies have assigned project managers, sent out memos, trained frontline staff, hung posters on the wall and incorporated various forms of asset recordkeeping to determine how many containers went to which location. Yet for the most part, the leakage continues.
Too often, we merely manage around the problem. We may budget for an annual container replacement amount that significantly exceeds the predicted end of life replacement requirement. Some companies even plan for the expedited transportation needed to reposition reusable packaging on an emergency basis, or for the purchase of corrugate boxes or recycled pallets to fill the void when the empty assets do not return as anticipated. In other words, we often budget to ease the inefficiencies caused by container loss, rather than getting at the root issue.
Here are four quick thoughts toward getting your reusable packaging system under control.
If executives want employees to manage reusables as if they matter, they must consistently lead by example. When reusables are stored in unsecured locations, or if they are not picked up on a regular basis, they start taking over the store’s back room. In a production pinch, employees may be directed or allowed to use the wrong packaging for the wrong customer. Such actions send a clear message that packaging assets are a secondary concern.
Another way to inadvertently send a message that packaging doesn’t matter is by failing to remove poor condition assets from the system for refurbishment or replacement. When employees are frustrated by container damage or unsanitary conditions, they may be less motivated to safeguard them from loss. What better way to create the need for fresh, new replacements than recycling old ones?
You may not own the containers, but they make your supply chain efficient. It is essential to manage them from a holistic perspective and not look at them as a windfall opportunity for your company in avoiding the cost of purchasing containers for an application. If we allow trading partner’s containers to be used for non-designated purposes such as storage or shipment, the result will be heightened replacement costs that negatively impact trading relationship.
The management of returnable containers and pallets is hard enough even in a straightforward loop such as a production plant to the retailer. As supply chains get more complex with multiple trading partners, reusable assets are increasingly more challenging to manage effectively to prevent loss.
That’s when a switch from an ownership model to a pooling approach can help. IFCO’s RPC pooling model eliminates the headaches of asset management for producers, logistics providers, and retailers alike. It allows the entire fresh supply chain to benefit from its high quality, standardized containers mutually.
Preventing reusable container and pallet loss isn’t impossible–but it requires action. A significant first step is to manage those assets like they matter.