Returnable Packaging and Automation

Best practices for integrating reusable packaging with automated manufacturing and storage systems. Industry insider emphasizes the importance of a direct line of communication between the automation supplier and the reusable packaging provider.

Mike Chiado, President of Americas for the Utz Group’s U.S. affiliate, George Utz Inc. USA gave a presentation on ‘Teaming Returnable Solutions with Automation’ at Promat 2017.

Mike Chiado

The Utz Group manufactures plastic containers, component holders, and pallets. The company’s returnable containers and other products are used in industries such as automotive, chemical and pharmaceutical, food, textiles, electronics, warehousing and logistics, and others.

The Utz Group operates from manufacturing facilities at eight locations around the world, including its recent addition in Mexico. Each is a stand-alone facility with its independent capabilities for engineering, prototype development, tooling development, and manufacturing. Also, the company can take a container solution it has developed for an industry and may be able to integrate that, adapting it for another industry. It can similarly change solutions regionally for customers or in different countries.

Mike, who previously worked in the automotive industry in product development and manufacturing and has been employed by the Utz Group for ten years, talked about integrating reusable packaging with automation. Indeed, his remarks underscored the importance of providers of returnable packaging working hand-in-glove with automation providers to serve manufacturers – notably in the early stages of developing or adding automated manufacturing or assembly operations.

Returnable packaging may be feasible for as few as 500 units and up to 100,000, depending on how “balanced” the manufacturing process is, said Mike.

He quickly summarized some of the advantages of returnable packaging – whether a business has automated manufacturing process or not – and also referred the audience to information on the website for the Reusable Packaging Association. Reusable packaging reduces packaging costs over time. It is a ‘green’ business strategy that benefits the environment, it enables standardization and improves quality and safety. Other benefits include reduced labor, increased throughput, and reduced work in progress.

Thermoformed containers can offer better value at low volume, but for large runs, injection molding can be an attractive option.

The Role of Reusable Packaging in Integrating a Customer’s Processes

The goal of the Utz Group in talking with manufacturers is not just to provide a container or pallet to move something for the client. The company wants to be viewed as integrating a client’s processes, Mike emphasized. “We want to integrate manufacturing processes together by a common, standard transport device from process to process.” The output of one manufacturing process is a standardized input for another production process, he noted.

Reusable containers support flexible manufacturing, he noted. “That’s a big one. It’s really about a strategic approach, and this is where we see customers get the most significant benefit, in developing flexible manufacturing solutions.”

Flexible manufacturing practices enable a business to optimize logistics and increase speed to market, he said. “They don’t have to re-invent the production process each time…You have a standardized approach in general,” an approach that can be duplicated and readily modified for new work cells and to produce new products.

When considering returnable packaging, people may think of plastic bread trays, milk crates, and containers used for automotive industry standards. Those types of applications have industry-specific standards even though they may be somewhat broad-brush, said Mike, and there are many suppliers in those markets.

For example, the Utz Group provides packaging and containers for what could be termed standard industry systems, such as trays, totes, pallets, and other packaging related to distribution center operations, such as for picking an order of goods for a tray, case, or full pallet. That type of packaging tends to be made for industry or integrator-specific standards and is used for the same kind of application over and over, perhaps slightly adapted.

Focus on Customer-Specific Solutions

“I want to focus here…(on) customer-specific solutions,” said Mike. “This is where we talk about marrying processes,” integrating and coordinating the steps in the manufacturing process, bringing the output of one process to the input of another process.

Customer-specific solutions focus on helping a business automate the assembly of its product. Think of robots working at high speeds. Returnable packaging for that kind of automated assembly environment usually is custom designed, at least the interior. Containers normally are very rigid with high dimensional integrity. They provide a precision fit for a part or component and also a precision orientation so they can be picked up or retrieved by a robotic device. Those kinds of attributes reduce the costs of robotic equipment, too. “We want to be able to convey them, to stack them, de-stack them, palletize them,” said Mike.

The packaging needs to be able to communicate with a robot-equipped work cell, too, so the cell knows what product is being introduced. Accordingly, the packaging has to be able to make use of RFID or barcodes.

The last attribute Mike discussed was the life cycle of the packaging, which is a key consideration in justifying the business case for investing in returnable packaging. Reusables tend to have a very long life. Plastic containers used in a food or beverage or automotive application may have a 3-4-year life cycle; a plastic tray used in a pharmaceutical application may have a life cycle of 10-15 years. Normally, they are not replaced because of wear and tear but because the manufacturing process has changed, and a new product is being run.

When can a business take advantage of automating and using returnable packaging? As with any application of returnables, the supply chain must be a closed loop, observed Mike. “That’s always the case with returnables. You want to be able to control the supply chain.” The biggest detriment to using returnables is a supply chain that is not a closed loop with resulting losses of units. Volume is also a consideration; the greater the volume, the more the investment can be justified. Another consideration is the type of product being manufactured. With high-value products, such as in the pharmaceutical and electronics industries, returnable packaging offers better protection of components against dust, dirt, and other contaminants.

In manufacturing or assembly operations with like families of parts, there is a good opportunity to consider automating using returnables, noted Mike. “You can spread it across multiple families, not just automate one cell.”

Relative Benefits of Thermoformed Versus Injection Molded Packaging

The Utz Group uses two manufacturing processes to produce plastic packaging, and Mike summarized each and their characteristics, and when one process is a better business choice. Injection molding uses granular plastic material that is heated with heat and pressure, then injected into a mold with high pressure. Thermoforming begins with a sheet of plastic that is heated and drawn over a mold with a vacuum and pressure to form an object.

 

Thermoformed products can offer a shorter development cycle.

Thermoforming can be used to produce a wide range of packaging that includes thick trays for holding and aligning parts for the automotive industry and trays to hold components used to manufacture a circuit board. It requires a lower initial investment for a customer, although the cost per piece is higher, and it offers flexibility and short lead times for development of the packaging. The up-front cost for an injection molded package tend to be higher, but the price per piece normally is lower.  A thermoforming product can be developed in six weeks, and a standard package in as little as two weeks; an injection molding solution takes about 18 weeks and even as long as 20 weeks because of the tool development process. Injection molded packaging allows parts to be contained in higher densities — closer together — and the containers can be produced much faster.

Which type of manufacturing process is selected depends in part on the volume of units the customer requires. An injection molded product that may require a higher initial investment but may be more cost effective than a thermoformed product depending on the number of units to be produced. The break-even point where injection molding is more cost effective is in the range of 12,000-20,000 pieces, depending on complexity, according to Mike.

There are ways to reduce the initial investment cost, too, noted Mike. It may be feasible to use an existing injection molding tool and modify it, or a set of standard molds may be available.

He described a case study of a customer that wanted to automate the assembly of the type of controller device that might be used for video gaming. The device had 19 components, same made internally and some made by manufacturers overseas, and the customer wanted to fully automate from components received from vendors to work cell; the parts would not be touched by human hands. In this instance, the customer initially thought injection molded packaging would be the best route, but the Utz Group developed a thermoforming solution that provided greater flexibility. The company was able to use limited thermoforming tools because many of the containers throughout the process shared common standards for the outside perimeter, from vendors to stacking and de-stacking and feeding operations to pallet strategy and racking strategy. The same standard allowed the development of multiple packages without the need to completely re-invent each container. The Utz Group also helped their customer figure out a way to take components arriving from Asia and to locate that packaging in a frame so it could it could be handled in the automated work cell instead of having to re-pack the component.

In the end, the Utz Group was able to produce the 19 unique trays for the entire assembly process using only two molds. The thermoformed trays saved the customer about $1.2 million compared to injection molding. “It worked out quite well for the customer,” said Mike.

Thinking About Reusables Strategically

Summing up, “The first point is you have to think about this strategically,” said Mike. “It’s an approach you want to take across manufacturing processes. Don’t just think about automating one cell. Think about automating across different families of parts.”

When a business considers using reusable packaging in automated manufacturing or assembly processes, both the client business and a vendor like Utz Group have to give ample consideration to related factors, particularly in the front of the supply chain — how components or materials will be handled and racked, for example.

Also, it is important to visit the issue of reusable packing early in the process of considering automation, and for direct communication between the automation vendors and providers of returnable packaging. “Some customers want to be in the middle,” said Mike, but the two vendors also need to be able to communicate directly with one another because of the nature of their roles.

In fact, the biggest mistake businesses make in turning to automation is investing and adding that capability without jointly involving a returnable packaging vendor in the process. “They call and say they want a returnable solution,” said Mike, after automating.

The standards for packaging for handling and moving parts or materials through the chain are what is most important, said Mike. “Think of standardizing as the first step.” Common standards lower the investment and allow common tooling and flexible approaches in producing the containers.

Tim Cox is a Virginia-based freelance writer and editor.

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