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  Manufacturing Insights   |   August, 2008
The Next Phase of Lean: Returnable Packaging
by Thomas R. Cutler

Fortune 500 businesses, particularly automotive Tier 1 manufacturing suppliers, consumer product manufacturers, scrap steel businesses, and distribution and freight companies, are utilizing returnable packaging services as the next phase in a lean manufacturing initiative. Having maximized many of the plant floor operations, it is precisely this type of creative packaging purchase that empowers independent used equipment dealers, used equipment liquidators, and industrial end-users to eliminate another significant element of waste in their business model.

As industrial automation continues down its lean manufacturing journey, the area of packaging waste has taken center stage. The way to reduce this packaging waste is returnable packaging. The EarthWorks Group estimates that 30% of landfill waste is created by plastic and paper packaging. The use of cardboard products and other one-time-use packaging products contribute significantly to this waste.

David Madden is President of, an online marketplace that offers manufacturing and distribution businesses an outlet for procuring or selling used returnable packaging. According to Madden, “Product offerings include many standard and common reusable packaging solutions, including but not limited to plastic totes, plastic collapsible bulk boxes, metal containers, wire baskets, and plastic pallets. As a component in continued process improvement returnable packaging empowers companies to reduce packaging acquisition costs through access to used returnable packaging inventories and enabled companies to maximize return during disposal of used packaging fleets.”

Folding bulk containers, industrial totes, and metal storage bins are used over and over again within a facility or between a supplier and a customer. They can be used literally thousands of times. These bulk boxes are much cheaper in the long term when compared to buying cardboard boxes and wood crates every time that product is shipped. Savings can be observed in the per piece packaging cost. While the upfront investment in returnable packaging may cost more, savings can be realized quickly through repeated use (the same bulk containers, metal bins, and totes are used over and over), labor (no more box assembly), material handling (fewer moves from stackable containers), quality (fewer rejects due to damaged packaging), and floor space (plastic and metal containers can stack very high). The per piece packaging costs for used bulk containers and totes can be as low as 5% of the costs for a comparable expendable solution, depending on shipping volumes.

Plastic Pallets:

Plastic pallets come in a couple of varieties. For the most part, they are made from structural foam, but there are also thermoform pallets available. The structural foam pallets are more rigid and durable than the thermoform version. Usually, the more rigid plastic pallets are paired with an HDPE (high-density polyethylene) plastic returnable tote in order to create a plastic container pallet. This pairing works well, because structural foam plastic pallets typically have a shorter lip around the edge of the pallet, and the totes fit perfectly within the lip. To finish off the combination, a pallet cover is used to make the plastic container pallets stackable on each other. By comparison, when using plastic corrugated (typically a custom made tote), the thermoform pallet is a better choice, because it uses a much higher lip height. The higher lip height on the thermoform pallet catches tote edges easily. Plastic pallets can also be used as export pallets. Due to export pallet requirements, any wood pallets must be heat treated; alternatively plastic pallets circumvent these requirements. Used plastic pallets for export purposes make a lot of sense from a cost perspective, given that export pallets will rarely be returned to the company.

Madden noted that, “Container Exchanger specializes in saving money by providing access to used pallets from Stratis, Rhrig, Hampel, Orbis, Linpac, and others. Most of the companies that buy our pallets also discover that they have used plastic totes or bins that they can sell as well. We broker any used returnable packaging and sell these containers throughout the nation to maximize ROI (return on investment) for our clients.”

Madden proudly noted the way in which returnable packaging saves money for both buyers and sellers.

  • Providing Free professional website listing and assistance.
  • Providing exposure to a nationwide network of manufacturers.
  • Marketing and advertising to ensure quick sale.
  • Arranging the shipping required for items sold.
  • Maximize return from packaging investment.
  • The listed price includes all fees, there will be no surprises.
  • Purchasing used packaging greatly reduces costs.
  • Eliminating the "middle-man" typically involved in purchasing packaging.
  • Simplified Order Delivery - arrange shipping for the goods purchased.
  • Free Want Ads for any items that are not listed.

Increasingly companies will convert entire operations to returnable containers as part of a company's lean manufacturing methods. Improving packaging, transportation, and line-side presentation of containers are becoming the specific goals of the returnable packaging methodology. Such a program will axiomatically benefit the environment by virtually eliminating waste from expendable packaging, while improving the bottom-line.

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based TR Cutler, Inc. ( Cutler is the founder of the Manufacturing Media Consortium of three thousand journalists and editors writing about trends in manufacturing. Cutler is a member of the Society of Professional Journalist and author more than 300 feature articles annually regarding the manufacturing sector. Cutler can be contacted at See More Details.

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