Companies evaluating tracking technologies for their reusable packaging are often overwhelmed by the variety of solutions and uncertain how to calculate these solutions’ ROI. To help solve this problem, member companies of the Reusable Packaging Association (RPA) have developed a Technology Value Assessment Calculator to quantify the economic value and potential return on investment of applying smart tracking technologies to reusable packaging assets. This tool provides a starting point to assess how reusable packaging with tracking technology can estimate annual ROI (return on investment) levels when considering various potential technology-based solutions. This tool is located in the RPA’s Technology Hub here.
What does the calculator do?
This simple interactive tool allows a user to enter such variables as the number & cost of reusable assets, the total cost of the technology-based solution, the number of shipments, cycle time, loss rates of the reusable assets, and the type of product being transported. This tool allows annual savings to be reflected in real-time so a user can better understand the key variables that may impact potential savings, including the option when a returnable asset is carrying perishable food items. A user may email a copy of the results from different iterations so they can be easily compared and kept for future reference.
How does the calculator help reusable packaging users?
This tool was developed from the real-life experiences of the Technology Working Group (TWG) companies of the Reusable Packaging Association. This online tool continues to be updated based on learnings and validated use cases.
With the technology of tracking reusable packaging being optimized and a large number of proven solutions in the market, this value Assessment Calculator will help businesses to find the solution that fits their goals and ambitions. Users will get a realistic view of investments and cost savings in this easy-to-use tool that allows them to assess different scenarios and remove any hesitancy due to past issues & assumptions. And with all relevant parameters adjustable to individual use cases, the outcome is undeniably useful for ROI calculations and making well-informed decisions early in the evaluation process.
Use the Technology Value Assessment Calculator to evaluate your project today!
If a user is interested in learning more about a specific technology-based solution for reusable assets, they can contact an RPA member company product & services provider listed in the RPA Reusables Marketplace.
Using the Technology Value Assessment Calculator
Here is the overview of the tool, key variables, and how to use the tool when considering technology investments for Reusable Transport Packaging (RTP) type applications.
REUSABLE & TECHNOLOGY INVESTMENTS
- Reusable Transport Packaging (RTP) Product Type
Enter the type of returnable asset. This choice may include pallets, Reusable Plastic Containers (RPC), Intermediate Bulk Containers (IBC), or Distribution Totes.
- Number of RTP Units in Inventory
Enter the number of Returnable Transport Packaging (RTP) assets being used or considered.
- Percent of RTP Units Equipped with Technology Device
What percentage of the reusable assets will have a technology device applied?
- Total Cost of Deployment of Tracking Technologies: All Devices, Equipment, and Software
What is the total cost of the deployment of the technologies being applied?This number should include the costs of any devices, labels, equipment to read, and software required to interact with the technology-based solution. This amount is the TOTAL amount for installation and implementation. A user can incorporate recurring software licenses into this input field.
- RTP Purchase Cost per Unit
What is the cost of each reusable asset?
SUPPLY CHAIN CHARACTERISTICS
- Number of Shipments Using RTPs Over 1 Year Period
What is the total number of shipments of reusable assets each year? For example, if 25,000 RPCs (crates) are shipped four times per year, a user would enter 100,000 shipments per year.
- Percent of RTP Units Lost Per Year (annual pool shrink)
What is the percentage of reusable assets which are lost each year?This loss rate can vary based on a specific supply chain characteristic. Experiment with the calculator to understand the impact that loss can have on the ROI of the proposed solution. The loss rate entered can be the result of losing the asset and/or tag separation from the asset. (e.g., 1 out of 10 assets loses its tag either directly or indirectly, and the result is data loss, tracking loss, etc.). This percent loss entered results in increased costs to replace an asset, cost to re-tag an asset, and/or include the cost of a new tag, etc.
- Number of Days RTP Takes to Complete Use Cycle (average days out before return)
What is the typical number of days or cycle time of the reusables asset before it returns?
- Shortest Number of Days Possible to Complete Use Cycle (minimum days out before return)
What is the shortest number of days or cycle time of the reusables asset before it returns?
- Number of Workers Involved in Procuring and Managing RTP Assets
What is the number of workers required to manage the reusable assets being considered?
- Percent of Time Spent Managing RTP Inventories
What is the percentage of the time those workers spent managing the reusable assets?
APPLICATION & PRODUCT TYPE – FOOD
- Is the RTP Carrying a Food Item
Select “Yes” if the reusable asset carries a food, perishable item. A reusable asset may cause less product damage and can extend the life of food items.
END OF LIFE – REUSABLE ASSET
- Weight of Each RTP Product in US Pounds
Enter the weight of an individual reusable asset. At the end-of-life of a reusable asset, there may be a residual value of the plastic used as a raw material for future reusable assets.
- Technology Capital Investment
This output summarizes one-time costs for hardware, software, and other implementation activities.
- CAPEX per Unit Inventory
The capital investment per inventory is required. This output is helpful when considering the potential number of reusable assets that will be technology-enabled.
SUPPLY CHAIN SAVINGS
- Lost Reduction Savings
The savings result from a reduction in asset losses. The calculation assumes a 90% improvement in lost recovery after applying a technology-enabled solution.
- Asset Utilization Savings
The cycle time-based savings from improved utility and cycle time improvement of the reusable assets result from a technology-enabled pool of assets that can be increasingly utilized.
- Labor Efficiency Gains
The savings result from less workforce required to manage the reusable assets. This savings assumes a 50% time-saving improvement by utilizing a technology-enabled asset.
FOOD WASTE IMPROVEMENT SAVINGS
- Retail value of Food Waste Improvement
Savings resulting from a 10% reduction of food waste across the supply chain. 10% increase in retail unsalable food waste otherwise assumed.
END OF LIFE – REUSABLE ASSET
- End-of-Life Material Recovery Value
Savings assuming a 25% value of recyclable material at end-of-life from original manufactured cost. Estimate using $0.40 per pound of recycled material value and factors an 90% improvement in lost recovery.
- Total Annual ROI Savings from Technology-Enables RTPs
The total of both Investments and resulting Savings of using a technology-enabled asset.