CASE STUDY No. 9622

KEY WORDS RETURNABLE-REUSABLE CONTAINERS, COMPONENT DELIVERY

United Technologies Automotive
917 Liechty Road
Berne, IN 46711

Contact: Darren Kaiser, Environmental Manager. Tel: 219-589-7201.
Paul McKibben, Purchasing Manager. Tel: 219-589-7363.

Summary

An auto industry supplier finds it can eliminate 180 tons of incoming corrugated cartons and reduce disposal costs by more than $1 million by adopting returnable-reusable containers to receive and internally and externally ship components and finished products.

Action

The Berne plant of United Technologies Automotive (UTA) supplies exterior mirrors, grilles, and other painted products to the automobile industry. The plant employs 500 people. A recent cost-cutting program included special attention to reducing the cost of waste disposal related to the manner in which the factory received materials from suppliers. Everything arrived in periodic large shipments in corrugated containers--often, 2 weeks of inventory requiring large amounts of storage space.

Plant management decided to ask suppliers to ship smaller quantities of components more frequently, and to use a returnable-reusable container which would be designed and supplied by UTA. Participants in this change were the Purchasing Department, which developed the new container; the Materials Department, which changed delivery methods and truck schedules; and environmental managers.

UTA utilizes two types of returnable containers. One is a 6" x 6" x 20" polypropylene box, with tapered sides making it nestable (from Hinkle Manufacturing, Rossford, Ohio; 419-666-5550). The other is a plastic tote made of HDPE and called Stakpak (from Orbis, Watertown, Wiscon-sin; 414-262-5412). The tote is used for shipping, storing, and moving work-in-process within the UTA plant. Totes nest onto a plastic pallet (from Orbis) measuring 48 x 48 inches, slightly large than a standard wooden pallet.

Payback

By mid-1996, UTA had replaced 90% of incoming shipments with returnable-reusable containers; 60% of outgoing shipments were in returnables. No breakage had occurred. Containers have an estimated life of 10 or more years. Switching to plastic skids yields savings of $400 to $500 a week, UTA says. The company estimates it recovered its investment in returnable-reusable containers in less than a year.

Other benefits

  1. Greatly reduced overhead costs to purchase pallets and containers.
  2. Reduced labor time to set up and break down corrugated cardboard containers.
  3. A cleaner working environment.
  4. Lower costs of inventory with the institution of just-in-time delivery facilitated by returnable-reusable containers.
  5. Easier cleaning of pallets with water or steam; wooden pallets virtually defied cleaning.
  6. Lighter, easier to handle pallets: 45 pounds vs. 90 pounds for a wooden pallet of same size.
  7. Reduced risk of injury to workers handling plastic pallets--no splinters, broken boards, or protruding nails. Reduction in back strains.
  8. Rare breakage problems. When breakage occurs, plastic pallets, if reasonably clean, can be returned to the manufacturer for recycling and credit against the cost of replacements.
 

 

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