Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
Now that sustainability has entered the mainstream, more companies are looking at whether their operations might be a good fit for reusable packaging. Indeed, according to Jerry Welcome of the Reusable Packaging Association (RPA), the industry has seen annual growth of 10 percent over the past few years.
According to RPA, reusable packaging includes reusable pallets, racks, bulk containers, handheld con¬tainers, and dunnage made of durable materials such as metal, plastic, or wood. (A cardboard box, although it could be used more than once, would not be considered reusable packaging.)
The benefits of using reusables are manifold, experts say. They can reduce a shipment's impact on the environment. They are more cost-effective than buying one-way or nonreturnable packaging. They are typically stronger and easier to clean than their single-use counterparts. Finally, there's the aesthetic appeal. Reusable packaging usually looks better and often takes up less warehouse space because it is usually stackable and collapsible.
But for all the positives, reusable packaging does not make sense for everyone. Reusable packaging is not cheap, so to get a return on these assets (or to justify the fees if the units are rented from a pooler), a company has to make sure that it can get the packaging back. "You've invested the capital, the time, and the labor resource," points out Lisa Knight, director of marketing at Container and Pooling Solutions (CAPS). "If you are not able to get those [assets] back, you're going to be in some trouble."
For that reason, reusables tend to work best in a closed-loop system, where the units are exchanged among the same few parties, says Knight. She notes that there are circumstances under which reusables can work in nonclosed-loop environments—for example, if all of the end users' facilities are located close together, you could set up a regular milk run to retrieve the units. But even under such an arrangement, it would still be necessary to have a tightly controlled supply chain with a limited number of participants, she says.
But even if you have a tightly controlled supply chain, a reusable packaging program is not always a slam dunk. You have to put some thought into the program's setup. What follows are some steps you can take to make reusable packaging work for your company:
1. Calculate closely how many assets will be needed. To determine your asset requirements, it's important to know not only how many shippers are in the system but also the assets' cycle time. How long will it actually take to get reusable containers or pallets back from the end users? How many should be returned at one time? Is it worthwhile retrieving five or six containers or pallets, or should the return be postponed until a full truckload is built? Other questions center on the consistency of packaging volumes and whether there's a peak season for the packaging. Understanding all these factors will ensure the right amount of containers or packaging units are on hand and avoid the need to pay for expedited shipping from the end user, says Knight.
2. Conduct a lifecycle analysis. It is naïve to automatically assume that reusables will be cheaper or greener for the business, says Jack Ampuja, founder of the packaging advisory firm Supply Chain Optimizers. For that reason, he urges managers to perform a detailed eco-analysis tailored to their specific enterprise.
"Go back to what the original raw materials are and how they are converted into the packaging product, [and] look at how they come to your system, how they are transported, what you do with them," says Ampuja.
Ampuja adds that it's important that the analysis cover issues surrounding the packaging product's end of life. For example, many reusables are made out of plastic. "But plastic doesn't just disappear when its life is up," he says. "The [units] can be recycled, but in many ways, they can be much harder to recycle than paper."
3. Get supplier/customer buy-in. There are some cases where companies are only using reusables to ship between their own facilities. Most of the time, however, the items are being shipped back and forth between the company and one or more of its suppliers or customers.
In those cases, make sure suppliers or customers are on board with the reusables initiative. "Don't go down the path of doing the conversion [from nonreusables to reusables] without making sure your suppliers or customers understand what they are doing and the objectives behind it," says Norm Kukuk, vice president of marketing for Orbis Corp., a reusable packaging supplier.
One way to get partner buy-in, says Kukuk, is to show how reusable packaging will help them reduce overall costs. Another possibility, he says, is to point out how reusable packaging could support any objectives they may have, such as complying with new food safety requirements from the Food and Drug Administration.
Before you select a type of packaging, Kukuk recommends getting a customer's and/or supplier's input on how they would like to implement a reusable program. Ask them how they'd like to receive the packaging and return it and how they'd like their employees to pick out of the asset or place items into it.
4. Manage the assets. Reusable packaging is inherently valuable and can cost anywhere from $60 to several hundred dollars per piece. In order to get the most from these assets, companies must have processes in place to track, return, clean, repair, and eventually recycle or dispose of the material.
A pooler can help with the nuts and bolts of tracking and maintaining the assets. For example, many poolers will provide their customers (and their customers' partners) with scanners and systems to track assets. They will also ensure the assets are returned in a timely manner and that they are cleaned and repaired.
But contracting with a pooler doesn't mean you can simply step away from the operation; customers still have to be actively engaged in the process. "You need to understand [exactly] how you're going to be charged and who is responsible when one of these valuable pallets or totes goes outside the system or is broken," says Craig Densmore, a consultant with Supply Chain Optimizers and a professor of packaging at the Rochester Institute of Technology. "You don't want to receive a bill for a million dollars from the pooler because you can't account for reusables that they say are in your possession. It does take some administration from both sides."
It is also critical that your suppliers or customers play an active role in managing the fleet of assets. "Don't allow them to sit on inventory," says Kukuk. "Make sure you've detailed exactly how much they are allowed to keep on hand. Without that, you can get into a situation where your suppliers or customers are just building up buffers of packaging, and you find that your fleet is not turning over as fast as it could be."
That's a situation you definitely want to avoid, says Dave Mabon, head of contract packaging for third-party logistics service provider Genco. For cost reasons, you need to get as many turns as possible from each asset, he says.
5. Train, train, and train some more! To get the most out of the investment, employees must be properly trained on how to use and care for the asset, says Densmore. That might mean, for example, making sure associates know how to collapse and/or stack the items for maximum cube utilization when they are in return mode, he says.
6. Periodically reanalyze your packaging needs. Companies should recognize that as business conditions change, they may also have to adjust their packaging. For example, a business that has recently automated its operations might find it has to switch to a different type of reusable packaging. Or as the type of product being shipped changes, a company may need to switch to bigger or stronger containers.
The important thing, according to Kukuk, is to have procedures in place to ensure your program is re-evaluated on an ongoing basis. Companies with successful reusable packaging programs, he says, are continually "rightsizing" their packaging to make sure they are using the right packaging for the right application.
How to handle your used corrugated
For all reusable packaging's benefits, it's hard to beat the allure of cardboard. The cardboard box is cheap, easy to obtain, and easy to recycle. It's also versatile: According to Jack Ampuja, president and CEO of the packaging advisory firm Supply Chain Optimizers, a typical corrugated cardboard box will work extremely well for two-thirds of all packaging applications.
But if you do use cardboard boxes, you have to have a plan in place for handling the excess (also known as old corrugated containers, or OCC). If you don't, it can create serious bottlenecks in an operation, says Mike Connell, sales manager at Balemaster, a manufacturer of balers. "A distribution center usually requires several people to handle its excess corrugated," he explains. "Boxes are cut down or flattened and bundled on pallets. It can be a very labor-intensive task."
In most cases, Balemaster says, you will need a baler at your site so that you can create bales that will be sold to a paper broker for recycling. "With an automatic baler, the boxes are simply fed into the baling chamber where they are compacted quickly into a tight bale that can be recycled," Connell says. "The benefits of using a baler in a DC include generating revenue by selling bales to a recycling company, eliminating the cost of hauling the excess corrugated to a waste yard or landfill, and being environmentally friendly."
But you have to choose your baler carefully. There are several different kinds of machines on the market, so selection is not always a simple matter, explains Tade Mahoney of American Baler Co. The wrong choice could prove costly, he adds. "You have to be really careful because balers are expensive to put in, and they're expensive to take out. So operators of distribution centers have a responsibility to provide [their baler vendor] with accurate information."
That information includes what type of boxes the baler will be handling (for example, whether they're single-wall or double-wall corrugated), the size of the boxes, the carton-per-minute flow rate (both during average and peak times), and the percentage of broken-down boxes versus setup boxes that will be tossed into the baler. "From that, we determine how big a baler you need, how big a charge box (the chamber below the hopper and in front of the ram that holds material before it's compressed) you need, and how fast the ram (the plate that compresses the corrugated) has to cycle," Mahoney says.
Many DCs can get by with a 60-inch charge box, an eight-inch cylinder, and 50 to 75 horsepower, according to Mahoney. "But that's not good for everyone," he emphasizes.
Companies may want to consider other features for their balers depending on their operation. For instance, a high-volume operation might want a baler that can tie bales automatically (which can save two to 10 minutes of time over manually tying a bale), while a site looking to cut its energy costs might want a baler that turns off when idle. Alternatively, a baler with dual pumps and motors might be a good fit for a DC that can't afford a total work stoppage—that's because if one of the pumps or motors breaks down, the machine can continue to operate at a slower speed. Finally, a really large DC may find that a baler cannot keep up with the amount of excess corrugated it churns out. In that case, it may want to install a shredder over the baler.
Repeat user
When dairy product company Fairlife switched from using fiberboard containers to plastic reusuable totes for shipping milk to grocery chain Kroger, the benefits were immediately noticeable.
"It was cheaper, cleaner, and easier for the end customer to deal with," says Hans Maron, Fairlife's vice president of operations.
The fiberboard containers, which cost around $100 apiece, had to be recycled after one use. In contrast, the reusable totes, which Fairlife rents from pooler CAPS, can be used 50 to 60 times before they need replacement. "Totes, as long as they don't get damaged, have a life of three to four years," says Maron.
The main reason for Fairlife's switch to reusables, however, was ease of use. The totes are easier to fill and empty than the fiberboard version. They're also stronger. With fiberboard, according to Maron, there's more of a risk of a forklift tine's puncturing the packaging. Additionally, if the fiberboard is stacked, it can get pinched and start to leak. The totes, on the other hand, can be stacked 10 to 15 feet high.
Furthermore, CAPS has made leasing convenient for Fairlife. As part of its service, CAPS picks up the totes from the Kroger facility, cleans them, wraps them in plastic, and returns them to Fairlife.
There were a couple of factors that made Fairlife a good candidate for reusable packaging. First, the company had a closed-loop supply chain. It ships out filled totes from a single Fairlife location to a single Kroger location, where the milk is processed to make the grocery chain's own branded Greek yogurt. Second, the company had the shipment volume and consistency (300 to 400 totes per month) to make returns economical. "If you have lower volumes and they don't turn often, you're going to end up paying more to make sure they don't accumulate as much at the end user," Maron explains. "With higher volumes—because you can fit about 108 totes in a trailer—you're able to take full truckloads, which cuts back on shipping costs."
Supply chain risk analytics company Everstream Analytics has launched a product that can quantify the impact of leading climate indicators and project how identified risk will impact customer supply chains.
Expanding upon the weather and climate intelligence Everstream already provides, the new “Climate Risk Scores” tool enables clients to apply eight climate indicator risk projection scores to their facilities and supplier locations to forecast future climate risk and support business continuity.
The tool leverages data from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) to project scores to varying locations using those eight category indicators: tropical cyclone, river flood, sea level rise, heat, fire weather, cold, drought and precipitation.
The Climate Risk Scores capability provides indicator risk projections for key natural disaster and weather risks into 2040, 2050 and 2100, offering several forecast scenarios at each juncture. The proactive planning tool can apply these insights to an organization’s systems via APIs, to directly incorporate climate projections and risk severity levels into your action systems for smarter decisions. Climate Risk scores offer insights into how these new operations may be affected, allowing organizations to make informed decisions and mitigate risks proactively.
“As temperatures and extreme weather events around the world continue to rise, businesses can no longer ignore the impact of climate change on their operations and suppliers,” Jon Davis, Chief Meteorologist at Everstream Analytics, said in a release. “We’ve consulted with the world’s largest brands on the top risk indicators impacting their operations, and we’re thrilled to bring this industry-first capability into Explore to automate access for all our clients. With pathways ranging from low to high impact, this capability further enables organizations to grasp the full spectrum of potential outcomes in real-time, make informed decisions and proactively mitigate risks.”
According to New Orleans-based LongueVue, the “strategic rebranding” brings together the complementary capabilities of these three companies to form a vertically integrated flexible packaging leader with expertise in blown film production, flexographic printing, adhesive laminations, and converting.
“This unified platform enables us to provide our customers with greater flexibility and innovation across all aspects of packaging," Joe Piccione, CEO of Innotex, said in a release. "As we continue to evolve and adapt to the changing needs of the industry, we look forward to delivering exceptional solutions and service."
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Stampin’ Up!’s Riverton, Utah, distribution center
What happens when your warehouse technology upgrade turns into a complete process overhaul? That may sound like a headache to some, but for leaders at paper crafting company Stampin’ Up! it’s been a golden opportunity—especially when it comes to boosting productivity. The Utah-based direct marketing company has increased its average pick rate by more than 70% in the past year and a half. And it’s all due to a warehouse management system (WMS) implementation that opened the door to process changes and new technologies that are speeding its high-velocity, high-SKU (stock-keeping unit) order fulfillment operations.
The bottom line: Stampin’ Up! is filling orders faster than ever before, with less manpower, since it shifted to an easy-to-use voice picking system that makes adapting to seasonal product changes and promotions a piece of cake. Here’s how.
FACING UP TO CHANGE
Stampin’ Up!’s business increased rapidly in 2020, when pandemic-era lockdowns sparked a surge in online orders for its crafting and scrapbooking supplies—everything from rubber stamps to specialty papers, ink, and embellishments needed for home-based projects. At around the same time, company leaders learned that the WMS in use at its main distribution center (DC) in Riverton, Utah, was nearing its end-of-life and would have to be replaced. That process set in motion a series of changes that would upend the way Stampin’ Up! picked items and filled orders, setting the company on a path toward continuous improvement.
“We began a process to replace the WMS, with no intent to do anything else,” explains Rich Bushell, the company’s director of global distribution services. “But when we started to investigate a new WMS, we began to look at the larger picture. We saw problems within our [picking] system. Really, they were problems with our processes.”
Stampin’ Up! had hired global supply chain consulting firm Argon & Co. to help with the WMS selection and implementation, and it was that process that sparked the change. Argon & Co. Partner Steve Mulaik, who worked on the project, says it quickly became clear that Stampin’ Up!’s zone-based pick-and-pass fulfillment process wasn’t working well—primarily because pickers spent a lot of idle time waiting for the next order. Under the old system, which used pick-to-light technology, workers stood in their respective zones and made picks only from their assigned location; when it came time for a pick, the system directed them where to make that pick via indicator lights on storage shelves. The workers placed the picked items directly into shipping boxes that would be passed to the next zone via conveyor.
“The business problem here was that they had a system that didn’t work reliably,” Mulaik explains. “And there were periods when [workers] would have nothing to do. The workload was not balanced.”
This was less than ideal for a DC facing accelerating demand for multi-item orders—a typical Stampin’ Up! order contains 17 to 21 items per box, according to Bushell. In a bid to make the picking process more flexible, Mulaik suggested eliminating the zones altogether and changing the workflow. Ultimately, that would mean replacing the pick-to-light system and revamping the pick-and-pass process with a protocol that would keep workers moving and orders flowing consistently.
“We changed the whole process, building on some academic work from Georgia Tech along with how you communicate with the system,” Mulaik explains. “Together, that has really resulted in the significant change in productivity that they’ve seen.”
RIGHTING THE SHIP
The Riverton DC’s new solution combines voice picking technology with a whole new process known as “bucket brigade” picking. A bucket brigade helps distribute work more evenly among pickers in a DC: Pickers still work in a production-line fashion, picking items into bins or boxes and then sending the bins down the line via conveyor. But rather than stop and wait for the next order to come to them, pickers continue to work by walking up to the next person on the line and taking over that person’s assignment; the worker who is overtaken does the same, creating a process in which pickers are constantly filling orders and no one is picking from the same location.
Stampin’ Up! doesn’t follow the bucket brigade process precisely but has instead developed its own variation the company calls “leapfrog.” Instead of taking the next person’s work, pickers will move up the line to the next open order after completing a task—“leapfrogging” over the other pickers in the line to keep the process moving.
“We’re moving to the work,” Bushell explains. “If your boxes are full and you push them [down the line], you just move to the open work. The idea is that it takes the zones away; you move to where the next pick is.”
The voice piece increases the operation’s flexibility and directs the leapfrog process. Voice-directed picking allows pickers to listen to commands and respond verbally via a headset and handheld device. All commands filter through the headset, freeing the worker’s eyes and hands for picking tasks. Stampin’ Up! uses voice technology from AccuSpeechMobile with a combination of company-issued Android devices and Bluetooth headsets, although employees can use their own Bluetooth headsets or earbuds if they wish.
Mulaik and Bushell say the simplicity of the AccuSpeechMobile system was a game-changer for this project. The device-based system requires no voice server or middleware and no changes to a customer’s back-end systems in order to operate. It uses “screen scrape” technology, a process that allows the collection of large volumes of data quickly. Essentially, the program translates textual information from the device into audible commands telling associates what to pick. Workers then respond verbally, confirming the pick.
“AccuSpeech takes what the [WMS] says and then says it in your ear,” Bushell explains. “The key to the device is having all the data needed to make the pick shown on the screen. However, the picker should never—or rarely—need to look at the screen [because] the voice tells them the info and the commands are set up to repeat if prompted. This helps increase speed.
“The voice piece really ties everything together and makes our system more efficient.”
And about that system: Stampin’ Up! chose a WMS from technology provider QSSI, which directs all the work in the DC. And the conveyor systems were updated with new equipment and controls—from ABCO Systems and JR Controls—to keep all those orders moving down the line. The company also adopted automated labeling technology and overhauled its slotting procedure—the process of determining the most efficient storage location for its various items—as part of the project.
MISSION ACCOMPLISHED
Productivity improvement in the DC has been the biggest benefit of the project, which was officially completed in the spring of 2023 but continues to bear fruit. Prior to the change, Stampin’ Up! workers averaged 160 picks per hour, per person. That number rose to more than 200 picks per hour within the first few months, according to Bushell, and was up to 276 picks per hour as of this past August—a more than 70% increase.
“We’ve seen some really good gains,” Bushell says, adding that the company has reduced its reliance on both temporary and full-time staff as well, the latter mainly through attrition. “Overall, we’re 20% to 25% down on our labor based on the change …. And it’s because we’re keeping people busy.”
Quality has stayed on par as well, something Bushell says concerned him when switching from the DC’s previous pick-to-light technology.
“You have very good quality with pick-to-light, so we [worried] about opening the door to errors with pick-to-voice because a human is confirming each pick,” he says. “But we average about one error per 3,300 picks. So the quality is really good.”
On top of all that, Bushell says employees are “really happy” with the new system. One reason is that the voice system is easy to learn—so easy, anyone can do it. Stampin’ Up! runs frequent promotions and special offers that create mini spikes in business throughout the year; the new system makes it easy to get the required temporary help up to speed quickly or recruit staff members from other departments to accommodate those spikes.
“We [allocate] three days of training for voice, but it’s really about an hour,” Bushell says, adding that some of the employees from other departments simply enjoy the change of pace and the exercise of working on the “leapfrog” bucket brigade. “I have people that sign up every day to come pick.”
Not only has Stampin’ Up! reduced downtime and expedited the picking of its signature rubber stamps, paper, and crafting supplies, but it’s also blazing a trail in fulfillment that its business partners say could serve as a model for other companies looking to crank up productivity in the DC.
“There are a lot of [companies] that have pick-and-pass systems today, and while those pick-and-pass systems look like they are efficient, those companies may not realize that people are only picking 70% of the time,” Mulaik says. “This is a way to reduce that inactivity significantly.
“If you can get 20% of your productivity back—that’s a big number.”
With its new AutoStore automated storage and retrieval (AS/RS) system, Toyota Material Handling Inc.’s parts distribution center, located at its U.S. headquarters campus in Columbus, Indiana, will be able to store more forklift and other parts and move them more quickly. The new system represents a major step toward achieving TMH’s goal of next-day parts delivery to 98% of its customers in the U.S. and Canada by 2030, said TMH North America President and CEO Brett Wood at the launch event on October 28. The upgrade to the DC was designed, built, and installed through a close collaboration between TMH, AutoStore, and Bastian Solutions, the Toyota-owned material handling automation designer and systems integrator that is a cornerstone of the forklift maker’s Toyota Automated Logistics business unit. The AS/RS is Bastian’s 100th AutoStore installation in North America.
TMH’s AutoStore system deploys 28 energy-efficient robotic shuttles to retrieve and deliver totes from within a vertical storage grid. To expedite processing, artificial intelligence (AI)-enhanced software determines optimal storage locations based on whether parts are high- or low-demand items. The shuttles, each independently controlled and selected based on shortest distance to the stored tote, swiftly deliver the ordered parts to four picking ports. Each port can process up to 175 totes per hour; the company’s initial goal is 150 totes per hour, with room to grow. The AS/RS also eliminates the need for order pickers to walk up to 10 miles per day, saving time, boosting picking accuracy, and improving ergonomics for associates.
The upgrades, which also include a Kardex vertical lift module for parts that are too large for the AS/RS and a spiral conveyor, will more than triple storage capacity, from 40,000 to 128,000 storage positions, making it possible for TMH to increase its parts inventory. Currently the DC stores some 55,000 stock-keeping units (SKUs) and ships an average of $1 million worth of parts per day, reaching 80% of customers by two-day ground delivery. A Sparck Technologies CVP Impack fit-to-size packaging machine speeds packing and shipping and is expected to save up to 20% on the cost of packing materials.
Distribution, manufacturing expansion on the agenda
The Columbus parts DC currently serves all of the U.S. and Canada; inventory consists mostly of Toyota’s own parts as well as some parts for Bastian Solutions and forklift maker The Raymond Corp., which is part of TMH North America. To meet the company’s goal of next-day delivery to virtually all parts customers, TMH is exploring establishing up to five additional parts DCs. All will be TMH-designed, owned, and operated, with varying levels of automation to meet specific needs, said Bret Bruin, vice president, aftermarket sales and operations, in an interview.
Parts distribution is not the only area where TMH is investing in expanded capacity. With demand for electric forklifts continuing to rise, the company recently broke ground for a new factory on the expansive Columbus campus that will benefit both Toyota and Raymond. The two OEMs—which currently have only 5% overlap among their customers—already manufacture certain forklift models and parts for each other, said Wood in an interview. Slated to open in 2026, the $100 million, 295,000-square-foot factory will make electric-powered forklifts. The lineup will include stand-up rider trucks, currently manufactured for both brands by Raymond in Greene, New York. Moving production to Columbus, Wood said, will not only help both OEMs keep up with fast-growing demand for those models, but it will also free up space and personnel in Raymond’s factory to increase production of orderpickers and reach trucks, which it produces for both brands. “We want to build the right trucks in the right place,” Wood said.
Editor's note:This article was revised on November 4 to correct the types of equipment produced in Raymond's factory.
“The latest data continues to show some positive developments for the freight market. However, there remain sequential declines nationwide, and in most regions,” Bobby Holland, U.S. Bank director of freight business analytics, said in a release. “Over the last two quarters, volume and spend contractions have lessened, but we’re waiting for clear evidence that the market has reached the bottom.”
By the numbers, shipments were down 1.9% compared to the previous quarter while spending dropped 1.4%. This was the ninth consecutive quarterly decrease in volume, but the smallest drop in more than a year.
Truck freight conditions varied greatly by region in the third quarter. In the West, spending was up 4.4% over the previous quarter and volume increased 1.1%. Meanwhile, in the Southeast spending declined 3.3% and shipments were down 3.0%.
“It’s a positive sign that spending contracted less than shipments. With diesel fuel prices lower, the fact that pricing didn’t erode more tells me the market is getting healthier,” Bob Costello, senior vice president and chief economist at the American Trucking Associations (ATA), said in the release.
The U.S. Bank Freight Payment Index measures quantitative changes in freight shipments and spend activity based on data from transactions processed through U.S. Bank Freight Payment, which processes more than $42 billion in freight payments annually for shippers and carriers across the U.S. The Index insights are provided to U.S. Bank customers to help them make business decisions and discover new opportunities.