As a retailer or ecommerce company considers implementing reusable assets across their supply chain and transportation and logistics network ecosystem, companies must consider the financial and sustainability impact on both their business and partners.
As discussed in detail in the “Retail and the “How” of Reusable Transport Packaging” whitepaper, the retail industry needs to not only carefully consider the initial costs of building their reuse system supply chain or partnering with 3rd party reuse system pooling companies but also understand the impact on reaching the retailer’s Scope 3-level sustainability goals.
Based upon learnings from RPA retail and ecommerce workstream member companies, the following five areas are the most common factors to consider when asking, what makes an excellent reuse application?
- Supply Chain Characteristics
- Product Damage / Product Loss
- Volume of Goods
- Solid Waste Reduction / Cost Savings
- Sustainability Goals and Closing Gaps
Below is a more detailed discussion of these areas and factors a retailer should consider.
- Supply Chain Characteristics
Retailers should carefully consider their supply chain network characteristics when implementing reusable transport assets across their ecosystem. These characteristics should include:
1.1 Asset Control and Loss
When delivered and returned, is there a reasonable amount of control of the reusable asset within the targeted retail supply chain movements? Or is the asset not controlled and can be misused or illegally picked up by non-approved supply chain partners? While reusable asset loss can be solved by incorporating controllable processes and technology-based solutions for identification or tracking, reuse asset control should be considered when investing in a pool of reusable assets or using pooling services.
1.2 Geographic Distance
When considering reusable transportation assets, understanding the distances between the supply chain partner locations is very important, as this impacts the cycle time and reusable asset utilization rates as it moves across the supply chain and ecosystem partners.
1.3 Reverse Logistics
As goods are shipped and unloaded at a retail supply chain location, the reusable transport packaging needs to be collected, staged, and arranged for return without adding high costs and resources to manage. What reverse logistics solutions will be required to return the reusable asset?
In a closed-loop shipping system, the transportation that delivers the goods can be used to return the reusable asset to the previous location, allowing for gained efficiency by reducing waste, empty miles, etc. If a retailer builds or operates an open-loop pooling system, the assets can be returned to the open-pool partners through companies providing pooling-related services.
1.4 Cycle Time
The cycle time of the goods being moved on a reusable asset is also an important supply chain characteristic that needs to be considered. This includes how long the reusable asset is in use or stored at key locations, including the retailer, distribution center, and manufacturing locations across the supply chain. If the specific supply chain requires a reusable asset to be stored for long periods of time, it can impact the utilization and financial returns of the investment.
- Product Damage / Product Loss
When a retail-based supply chain is experiencing high levels of product damage from using disposable packaging, there are significant opportunities to reduce the amount of product damage.
Sturdy reusable packaging can lower physical damage to products they hold during transit and handling versus expendable packaging. At the same time, container ventilation helps reduce the cooling time for perishables, increasing freshness and prolonging shelf life. Both of these features lessen food waste when used in food distribution. There are multiple examples where reusable transport packaging can reduce product damage rates by more than 80%.
This can result in significant cost savings, decreased product loss, and food waste generation for a retailer’s supply chain.
- Volume of Goods
When a retailer considers the use of reuse system transport packaging solutions, the level of shipment volume can play an essential role in the reuse utilization rates of the goods being moved. This will impact the capital investment required to develop a reuse system pool of assets across the retail & ecommerce ecosystem of partners.
- Solid Waste Reduction / Cost Savings
As a retailer considers the waste generated across their direct supply chain operations and their partner’s supply chains, a large amount of packaging waste is often generated and disposed of. This can include secondary/tertiary corrugated packaging, plastic stretch wrap, slip sheets, etc. These materials can be recycled but require extra resources, planning, transportation, and logistics planning.
A retailer’s supply chain can reduce or eliminate recurring single-use packaging costs by eliminating excess packaging. In retail supply chain operations, teams often generate and manage multiple tons of corrugated and plastic waste. When considering goods movement across the entire retail supply chain, this can result in a significant quantity of labor resources applied to manage this challenge and hidden factories being created and operating within various retailers and supply chain partners.
Finally, this can significantly impact the sustainability goals that a retailer and their supply chain partner target as part of their Scope 3 emission reduction targets.
- Sustainability Goals and Closing Gaps
When considering reusable transport packaging solutions, it is important to quantify how a reuse system asset will impact a retailer’s supply chain and its supply chain partners’ sustainability goals.
As a retailer is considering options to reduce solid waste levels, food waste, and carbon emissions in their transportation and logistics networks and reduce their Scope 3 emission targets, the use of reuse system assets can have a high positive impact on reaching their goals of reducing waste and reaching their emission targets.
While there are other considerations, such as an underutilizing warehouse or transportation resources, reducing employee ergonomic concerns, or general needs to increase supply chain efficiencies and reduce costs, the above five areas are common across most successful reusable transportation assets retail-based supply chains.
A more in-depth reference guide and case study examples of Reusable Transportation Packaging in the retail & ecommerce ecosystem, “Retail and the “How” of Reusable Transport Packaging,” is available on the RPA website.
This brief article and whitepaper are a cumulation of work performed by the Reusable Packaging Association’s (RPA) Retail & Ecommerce workstream members and invited industry experts. The committee’s objective is to raise awareness of asset management and develop standards for common processes promoting the efficient movement, handling, visibility, and return of reusable packaging products across the retail & ecommerce supply chain.
A wide range of reusable solutions, including pallets, crates, containers, identification and tracking solutions and others can be found at the Reusables Marketplace, where both sustainable packaging and reusable packaging products and services from RPA member companies can be found.