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International Track: Containers and Materials Tuesday, November 11, 2008

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International Track: Containers and Materials Tuesday, November 11, 2008 – PowerPoint PPT presentation

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Title: International Track: Containers and Materials Tuesday, November 11, 2008


1
International Track Containers and Materials
Tuesday, November 11, 2008
  • Building the Business Case
  • for Reusable Transport Packaging

Presenter Brian Lindell, General Manager, Food
and Beverage Division Rehrig Pacific
Company Blindell_at_rehrigpacific.com 770-339-9888
2
Rehrig Pacific Background
A family tradition of growth, service
innovation
  • World-class product design and innovation
  • Nine (9) state of the art manufacturing
    facilities
  • 750 employees
  • Established in 1913
  • Fourth generation family owned operated
  • Technologically advanced plastic product
    manufacturer
  • Focused supply chain solutions provider

3
Rehrig Pacifics Manufacturing Locations
3
Sales Offices Europe United Kingdom Asia
Hong Kong Licensees - Worldwide
4
What customers use Rehrig Pacific?
5
Reusable/Returnable Transport Packaging Topics
Both a User and Non-User Perspective
  • Reusable/returnable packaging and the environment
  • Including a recently commissioned study on the
    energy use and the solid waste and greenhouse gas
    impact of reusable plastic crates versus one-way
    corrugated packaging
  • Benefits of reusable/returnable packaging
  • Including cost drivers of reusable packaging
  • How to get the reusable/returnable packaging back
    and reduce shrinkage
  • Including a typical cost-benefit financial model
    for reusable transport packaging
  • The important issue of asset management

6
So what is most green?
Reusable/Returnable Packaging and the Environment
One-Way OR Reusable
7
Reusable/Returnable Packaging and the Environment
  • Sustainability balancing three components
  • Environmental
  • Social
  • Economic
  • Reusable continued use
  • Renewable replenished by natural processes at a
    rate comparable or faster than its rate of
    consumption

8
Reusable/Returnable Packaging and the
Environment cont.
Open Loop Supply Chain for Grocery Retail
9
Reusable/Returnable Packaging and the
Environment cont.
Closed Loop Supply Chain for Grocery Retail
Reusable/Returnable Packaging
10
Reusable/Returnable Packaging and the
Environment cont.
  • Carbon Footprint or Global Warming Potential
    (GWP)
  • The measure of greenhouse gases (GHG) that are
    either directly or indirectly emitted to sustain
    a human activity, normally expressed in CO2
    equivalent.
  • Life Cycle Assessment (LCA)
  • A complex study that is the most accurate way of
    calculating the carbon footprint of a product.
  • LCA analyzes every single part or process
    involved in the life of a product and gives a
    clearer picture of a products effect on the
    environment, but not its social or economic
    impact.

11
Reusable/Returnable Packaging and the
Environment cont.
  • Sustainable packaging systems
  • Society effective, add economic and social
    value
  • Packaging system efficient with minimum use of
    materials and energy
  • Packaging material recyclable or compostable
  • Packaging component safe, non-toxic to humans
    and ecosystems
  • from a Michigan State University presentation

12
Reusable/Returnable Packaging and the
Environment cont.
  • In accordance with ISO 14000,
  • Franklin Associates, an independent laboratory,
    used the Life Cycle Analysis methodology for
    determining the environmental impact of three
    packaging types.
  • Franklin Associates September 2008 study
    compared
  • 1,000 cases of 20 oz. bottles packaged in the
    following
  • three ways

Reusable Plastic Crates
Corrugated Tray with shrink film, one-way
Corrugated Pad with shrink film, one-way
13
Reusable/Returnable Packaging and the
Environment cont.
  • The three categories in which the packaging was
    measured
  • energy use
  • solid waste contribution
  • greenhouse gases
  • The Life Cycle steps analyzed in the study
    include
  • extraction of raw materials from the earth
  • materials and container manufacture
  • outgoing transportation of containers
  • backhauling of empty plastic shells, and
    recycling
  • and end-of-life disposition.

14
Reusable/Returnable Packaging and the
Environment cont.
  • Two scenarios were analyzed
  • Baseline
  • Plastic crates 10 turns/year, 6-year life, 5
    annual losses
  • Both corrugated packages 25 recycled content,
    95 recycling, 50 film recycling
  • Alternative (to provide a more favorable scenario
    for one-way systems and less favorable for
    reusable plastic crates)
  • Plastic crates 10 turns/year, 3-year life, 10
    loss
  • Both corrugated packages 50 recycled content,
    95 recycling, 95 film recycling

15
Reusable/Returnable Packaging and the
Environment cont.
  • Results Baseline scenario for reusable plastic
    crates versus film with corrugated pad and film
    with corrugated tray.
  • Per the Wall Street Journal, U.S. residents
    generate an average of 118 pounds CO2 equivalent
    per day, or 20 metric tons per American annually.

16
Reusable/Returnable Packaging and the
Environment cont.
  • Results Alternative scenario for reusable
    plastic crates versus film with corrugated pad
    and film with corrugated tray

17
Benefits of Reusable/Returnable Packaging
  • Product protection reduced unsaleables
  • Product display improved merchandising
  • Financial economics continuously lower cost per
    case
  • Warehouse space space savings, improved
    stacking
  • and stability
  • Ergonomics improved for handlers, stock
    employees
  • and drivers

18
Cost Drivers of Reusable/Returnable Packaging
  • Product development cycle Things to consider
  • Main cost drivers
  • Product weight - over 50 of cost
  • Tooling - varies dependent on process
  • High pressure injection molding - most expensive
  • Material, HDPE and PP (100 Recyclable)
  • Color, black is least expensive and allows
  • for recycled material.

19
Cost Drivers of Reusable/Returnable Packaging
cont.
  • Float size how many turns does your business
    average
  • 5 turns 10 3 turns 17
  • Recycled materials tremendous cost savings, but
    difficult to source if color other than black
  • Decoration hot stamping vs molded-in logos

20
Reusable Packaging Companies Recommend
Purchasing More Containers and Pallets Because
  • Your business is growing
  • Reusable packaging makes business sense
  • for your application
  • Not because of loss.

21
How to Get Reusable/Returnable Packaging
Returned and Reduce Shrinkage
  • Asset management
  • Loss due to theft
  • Asset tracking
  • Third party logistics companies, pooled floats
  • Radio Frequency Identity (RFID)
  • Due to time constraints, this presentation will
    only explore Asset Management, but to represent a
    complete picture of ways to get packaging
    returned and reduce shrinkage, these three items
    are also listed here. More information about
    them is offered in the copy of my notes which you
    may request after this presentation.

22
Asset Management
  • Asset Management has successfully reduced
    packaging purchases by as much as 20.
  • Steps involved in Asset Management process should
    include
  • Objective assessment execute with management to
    determine expectations (Goals)
  • Preliminary preparation interview key
    stakeholders already involved in the process
  • Financial study examine past performance
  • Supply chain analysis conduct case float
    analysis
  • Planning and assessment format information flow
    to educate and build awareness.

23
Asset Management cont.
  • Implementation Hold key meetings to kick off
    initiative, test and monitor.
  • Identify results Comprehensively review how the
    new system is working, present the results to all
    stakeholders.
  • Structured and timely reviews Process must be
    ongoing and have continued support of upper
    management and continuous feedback to all
    stakeholders.

24
Loss Due to Theft
  • Loss represents less than 5 of missing assets
  • Misperception exists around how many assets
  • are actually stolen
  • The loss-due-to-theft study was partially funded
  • by Rehrig Pacific Company,
  • Private Investigators were hired in South
    Florida,
  • Los Angeles, Baltimore and Atlanta.

25
Loss Due to Theft cont.
  • Findings
  • South Florida no illegal recycling was found.
  • Baltimore no illegal recycling was found.
  • Southern California one illegal recycler was
    found with approximately 150K lbs. of mixed
    products.
  • Atlanta one illegal recycler found with
    approximately
  • 25K lbs. of mixed products.

26
Summary
  • Reusable packaging and the environment
  • The recently commissioned study revealed that
    reusable/returnable plastic crates require less
    total energy, produce less total solid waste and
    generate less total GWP than the two corrugated
    options.
  • Benefits of reusable packaging
  • Ask for a cost-benefit financial model make
    sure it works for you.
  • How to get the reusable packaging back
  • and reduce shrinkage
  • An asset management program can be beneficial.
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