A big question looms in the minds of those involved with reusable packaging systems: Could these material handling tools, most often associated with sustainability, take on a greater role as gloomy business conditions continue to force cost and waste reductions throughout the supply chain?
To find out, MHM tapped the expertise of the incoming president of the Reusable Packaging Association (RPA). RPA describes itself as a collaboration of manufacturers, poolers, distributors, retailers and educators that promotes the environmental, safety and economic benefits of reusable packaging.
Jerry Welcome officially took the reins last month. He brings a wealth of association management expertise at a critical time in the organization’s history. Jeanie Johnson, who served as executive director since the association’s inception in 1999, will continue her management consulting practice through Johnson Management Group.
MHM sat down with Welcome for an exclusive, one-on-one interview. Here are some of his insights.
In May, the Reusable Pallet and Container Coalition became the Reusable Packaging Association. What drove this identity change, and how has the market responded?
“The new RPA is an outgrowth of the board and membership’s strategic planning process. The members knew that, in order for the organization to grow and be relevant in the marketplace, it needed to go beyond its limited scope and look at a broader mandate—to promote reusable packaging systems as the preferred solution for moving, storing and handling product throughout the entire supply chain.
“In my opinion, the members correctly sensed a momentous shift in the demand for better supply-chain management practices and growing concern for environmental issues. Reducing solid waste, minimizing the carbon footprint of the products used in packaging and reducing overall costs to companies are all issues driving this change, and I’m glad to be leading an organization with these issues clearly in sight.
“I believe the market is responding very positively to these issues. Companies like Wal-Mart, Coca-Cola, John Deere, Kroger, GM and many others are embracing reusables in their operations and driving greater demand for these products. I think this is just the tip of the iceberg.”
What's covered under the term “reusable transport packaging,” and who are members of the RPA?
“Reusable transport packaging replaces one-time (and limited-use) pallets and boxes with reusable containers (such as totes and bins), along with reusable pallets and pallet/container rental systems (pooling). Reusable transport packaging is used for multiple trips in closed-loop and managed, open-loop shipping systems, in which the return of empty transport packaging components (reverse logistics) can be repeated.
“Reusable packaging protects and moves product throughout the supply chains of many major industries, including beverage, food, automotive and pharmaceutical. Reusable pallets and containers are designed for many years of use. They are typically made of durable wood, steel or virgin or recycled-content plastic, which is resistant to chemicals and moisture and has good insulating properties. Sturdy, moisture-proof containers are built to protect products, especially in rough shipping environments.
“RPA has four classes of membership. Regular members are companies or suppliers engaged in the manufacturing or pooling of reusable packaging products or systems. Affiliate members have secondary interests supportive of the trades and industries of RPA general members. End-user members are companies that use, or potentially use, pooled or reusable packaging and, finally, institutional members are nonprofit organizations with specific interests in the mission and scope of our work. Institutional members include academic institutions, such as Michigan State and other
| RPA President Jerry Welcome |
packaging schools, non-governmental organizations and associations.”
What are the biggest obstacles blocking increased adoption of reusable packaging systems?
“There are probably two key obstacles: stakeholder acceptance and endorsement and initial investment in these systems and products. I’ll discuss each briefly.
“As with any new supply-chain based project, the true success of a reusable packaging program depends on stakeholders across the supply chain embracing the benefits. Studies show 46% of supply-chain executives cited resistance to process change as the major factor that will impede their supply-chain performance improvements.
“Although it’s physically possible to implement reusable packaging rapidly, the biggest pitfall is lack of acceptance from people affected by the change. Packaging is one of the few areas that impacts almost every function in an organization. All of the people who touch the part or package should be represented and educated as part of implementation. RPA members have experienced packaging professionals available to provide on-site support to help plan and facilitate a smooth and cost-efficient transition. In most organizations, accomplishing this involves planning, training and testing to ensure that all the players embrace the new processes and work effectively with the new system.
“Next, the initial investment in reusable packaging is different from the simple purchase of traditional packaging materials, such as corrugated boxes and wood pallets. Without a thorough cost analysis, many companies may not account for the real savings and benefits they can gain from switching to reusables.
“Oftentimes, companies may see high initial startup costs but experience a significant return on investment in a very short period of time—say, just four to five months. Additionally, they can reduce storage and cut tons of waste. There are plenty of examples of how reusable packaging can save end users money.
“Also, if the initial investment is a concern, companies may be able to achieve immediate, significant savings by leasing or pooling their packaging. Leasing enables the use of reusable packaging without upfront investment. Companies can achieve all the benefits of reusable packaging without adding debt, assets or capital expenditures to their balance sheets.”
How will RPA help encourage further application of reusable packaging systems?
“I think the short answer is we need to do a better job of educating the marketplace about the benefits of reusable packaging products and systems. We need to conduct more studies and do more lab and field testing to collect more data to demonstrate the benefits of employing these products and systems. We need to work with government regulators to promote the advantages of reusable packaging and with companies that have already converted to these systems to share their successes. The more people see and hear about the successful implementation of these systems and products, the more likely more companies will adopt these products for their own benefit and for the benefit of the environment.”
Have advancements in tracking technologies allowed more end users to gain advantages that were previously out of reach?
“I think tracking technologies are absolutely a boost to managing product flow and identifying where product is in the supply chain. Because RFID hasn’t been fully deployed throughout the supply chain, it’s hard to make any significant claim as to its ability to result in advantages by reusables, or any other system, yet. I think we have seen some gains made through the implementation of better barcoding systems and more standardization of codes. I think there are some other tracking technologies coming into the marketplace that show promise in improving the supplychain management system.
“However, I’m not sure you can cite these examples as critical to the success of using reusable packaging quite yet. I do believe employing reusable packaging systems is advantageous overall, but the promise of better tracking technologies has yet to make a big impact on the use of our products.
“It’s getting closer, and RPA is in the process of conducting lab and field studies on RFID tags on pallets to collect data on the feasibility of using RFID tags to track pallet loads. The initial findings are promising, but until all the trials are final, and the data fully analyzed, we will have to wait and see how the use of RFID might impact the reusable market.”
Today, end users must move more product faster with fewer resources. How can reusable packaging help meet this challenge?
“Reusable systems will definitely improve efficiencies in the warehouse and throughout the distribution system. I believe, over the long haul, these products and systems will cost less and contribute to a company’s bottom line, as well as significantly contribute to a reduction in waste and overall carbon footprint. As proven tracking technologies are employed, they will also help in managing inventory as well as telling a company exactly where products are in the system.
“Here are some other areas in which reusable products and systems will have a contribution to a company’s productivity and profitability: lower cost-pertrip; lower labor costs; better product protection; less product damage; lower material costs over time; better ergonomics and improved worker safety; greater landfill availability without increased landfill costs (and taxes paid by the company); longer useful life of packaging; and reduced greenhouse gas emissions.”
What are your goals as incoming president?
“I have set several goals for my first year. Probably the most important goal is to continue to implement RPA’s longrange strategic plan and make sure we are on target to reach our strategic goals for 2009.
“The second goal is to increase membership in RPA. There are a lot of companies who should be a part of this organization, and I will be working with the membership committee to contact these companies and invite them to become a part of this dynamic organization.
“The third goal is to continue to build awareness of RPA in the marketplace, the media, government and other groups to help us reach our goals. The fourth goal is to work on an organizational transition, and by that, I mean make sure there is a smooth transition from Jeanie Johnson to myself and that we begin to build our staff capabilities and also work with the board of directors to help them become a more strategic governance group and less involved in the day-to-day work of the association.
“My final goal is to identify new strategic initiatives that will deliver value and add expertise and content to what we offer to members and the marketplace and create initiatives that will deliver new, non-dues revenue.”
How will your background help achieve those goals?
“I have nearly 17 years of senior-level trade association management experience, and I will use the knowledge gained from my various positions to help me guide the organization in the years ahead. I was president and chief operating officer of the International Fresh-Cut Produce Association, executive vice president for the United Fresh Produce Association and senior vice president of the Packaging Machinery Manufacturers Institute.
“I also have a strong legislative background, having worked on Capitol Hill with the House Committee on Agriculture and as a senior lobbyist for the American Meat Institute. My trade association experience covers the produce and meat industries and packaging sector, as well. I’ve been involved in developing and managing trade shows, communications and public-relations programs, membership, education and meetings, so I think I have all the requisite background needed to successfully manage my responsibilities at RPA.”
For more information about the RPA or reusable transport packaging systems in general, visit www.choosereusables.org.
Transport Packaging News
Study Highlights Shifts in Packaging Use
ARLINGTON, Va.—With retailers demanding greater value, and bottom lines demanding reduced costs, secondary packaging is under the microscope, according to the latest research from the Packaging Machinery Manufacturers Institute (PMMI).
The “Secondary Packaging Market Research Study” reports that every company participating in the study is investigating and re-evaluating its secondary packaging containers.
Corrugated fiberboard is under particular consideration, the survey reports, because the amount used impacts overall costs. According to PMMI’s research, 80% of companies are currently using regular slotted containers for secondary packaging, and within that group, more than half (51%) are decreasing usage by 5% to 60%.
Packaging professionals interviewed for the study largely (nearly 50%) predict a decrease in corrugated usage (with specially designed cartons filling the void), while 24% predict no change. Another significant contingent, 21%, foresees an increase in the use of corrugated fiberboard material because of Internet sales.
Also under consideration are alternative materials and the recycled content in corrugated fiberboard. Each change impacts secondary packaging performance as well as the machinery and primary packaging involved.
The report mentions a long list of alternative materials, including cornbased, bio-plastic polylactic acid; Hexacomb, a honeycomb product made from container board and starch; and thin-seal polypropylene.
Sustainability is top of mind, with 70% of respondents noting it as a goal in improving their secondary packaging. Cost savings, customer requests and reducing transportation costs are other drivers for changing secondary packaging.
To compile the study, PMMI researchers interviewed packaging professionals from consumer packaged goods firms in the food, beverage, dairy, electronics and personal-care markets; materials suppliers; and contract packagers.
ARPAC, GRSI Form Joint Venture
CONSHOHOCKEN, Pa.—AG Integrators (AGI) is a new joint-venture company created by ARPAC and GRSI. The venture blends packagingequipment manufacturing with software integration and warehouse control systems.
AGI designs packaging systems that integrate with new and existing equipment. The company focuses on automating and integrating processes, such as package formation, product and pack list insertion, labeling, manifesting and sorting.
AGI will be led by newly appointed president Steve Martyn and vice president of business development Chris Thorpe.
Pregis Names Director of Distributor Program
DEERFIELD, Ill.—Thor Petersen has been named director of Pregis Corp.’s distributor program.
Petersen will oversee programs and initiatives designed to strengthen the supplier/distributor relationship. He has a bachelor’s degree in packaging from Michigan State University.
Pregis’ distributor program is steered in part by the Pregis Distributor Council (PDC). The council, comprised of the company’s leading distributors, was formed earlier this year as a feedback and networking entity.
“One of the reasons we formed the PDC was to give key distributors the opportunity to tell us what specific programs, services and support they need to help them grow their business,” Petersen explains.
Under the banner of “focus on your growth,” Pregis will create new programs, including custom lead generation and marketing initiatives for its top-tier distributors. Additionally, training will be offered on a variety of topics.
CHEP Helps Build Townhouses
ORLANDO, Fla.—CHEP is joining business leaders, sponsors and volunteers to help Habitat Orlando with one of its biggest homebuilding projects.
CHEP, a pallet and container pooling services company, is providing financial support for Staghorn Villas, an $8 million townhome community that will provide affordable homes for 58 local families. The 3.9-acre homebuilding site is slated for completion in spring 2011.
CHEP is also providing volunteers for the development of Staghorn Villas as part of the company’s CHEP Cares initiative.
“We are personally involved with the process of creating homes for the community, and that has brought us closer together as an organization,” says Kevin Shuba, president of CHEP Americas.