Reducing Supply Chain Costs

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Dayton, Ohio, USA, March 5, 2015

An effective reuse program can significantly reduce total supply chain costs. The most noticeable way is multiple reuses of the same shipping solution, decreasing packaging costs compared to one-time usage.  A solution priced such that it can be treated as a supply items and expensed should be selected. The ordering and receipt process for the reusable solution will then be no different than one-time-use shipping solutions.

After identifying a supplier that meets the necessary criteria for a successful reuse program, it is essential that both parties have extensive dialogue about packaging and performance requirements, resulting in the correct shipping solution and specifications.

An experienced supplier can help a biopharmaceutical company with the education, documentation and training to implement a reuse program.  The program is unique in its simplicity. Instead of shipping to its destination as for one-time-use, the shipping solutions arrive at their destinations with preprinted return labels and simple return shipping instructions. The return label is placed on the shipping solution, picked up by the delivery service and returned to the facility.  A low cost ground service is the preferred return shipping mode. Customer compliance and participation in the return is vital to the success of a reuse program.

It is important to notify those who will receive your shipping solution that participation in the program is highly recommended and appreciated. Communicating the environmental benefits and the assurance of future shipments received being re-qualified is added incentive to encourage participation. Some companies apply a nonparticipation penalty via per-shipment charge, although most end users comply as they are more than happy to participate to save money by avoiding the dreaded ‘filling up of the dumpster’ scenario that is a common complaint in the industry.

Recent CSafe REPAQ® program launches have shown up to 90% level of participation within the first year.  Customers enthusiastically embrace the concept of reducing the negative environmental effects of one-time-use without risking the quality of the products shipped.

Given, many programs have no cost unless a shipping solution is returned, there is an immediate positive financial impact from the program. In many cases, the net savings from the implementation of a reuse program in the first year can easily achieve 60% of the cost to complete the same amount of one-time-use shipments. With the potential for such significant savings, the economic value of reuse is immediately obvious.

Perhaps the most important component of a reuse program is the resulting capability to re-qualify every shipping solution before reuse. Without this feature, the monetary gains of using fewer shipping solutions could be quickly overshadowed by the cost of product loss and a tarnish of company reputation and image.

In the final analysis, the benefits of reuse can provide significant supply chain cost savings.  When done properly, all key stakeholders can be satisfied and benefit through the overall cost reduction, environmentally friendly solution and performance of the packaging. The success of a reuse program hinges on the packaging selected and the effectiveness of the re-qualification process.