TAMPA, FL – Accounting for packaging costs may seem straightforward, but a simple assessment may be misleading, according to RPC provider IFCO.
According to a recent IFCO educational webinar, “indirect costs may account for as much 85 percent of the total cost of disposable packaging across the supply chain.” The company cited studies conducted by two separate organizations, including researchers at California Polytechnic State University (Cal Poly), with whom the company collaborated to develop a tool called “freshIMPACT,” a cost evaluation tool designed to give retailers a clear picture of the cost impact of different packaging types.
Cal Poly’s researchers gathered data from various activities at distribution centers, asset recovery centers, and stores and, in general, IFCO notes, the research indicates that RPCs “enabled tasks to be carried out much faster, and therefore more cost effectively, than with single-use packaging.”
Based on this assessment of “Time-Driven Activity-Based Costing,” Cal Poly developed the freshIMPACT tool for IFCO to help clients calculate fives types of indirect packaging cost: product damage, labor/handling, space utilization, equipment, and transport.
According to the Cal Poly study, RPCs created cost-saving efficiencies throughout the supply chains. At the distribution center, IFCO RPCs were found to “reduce the need for specialized handling expertise, and their standardized footprint, interlocking design, and ergonomic handholds made highly variable processes consistent.” At the store level, IFCO RPCs were determined to be “more space-efficient, both packed and empty, making better use of limited space in the back room and on carts.” And during disposal/sortation, “used, folded IFCO RPCs [proved] much easier to handle due to their uniform footprint and interlocking design,” and the company noted that “by contrast, baled cardboard has an inconsistent shape; straps on bales of cardboard break frequently, requiring restrapping.”
“Researchers were able to show that product damage rates fall as the use of IFCO RPCs rises” the company noted, asserting that “IFCO RPCs outperformed single-use packaging throughout the supply chain in terms of product protection.”
IFCO representatives can complete a freshIMPACT analysis in a single day. The process involves a brief questionnaire designed to generate the most accurate estimate based on the unique characteristics of a customers’ supply chain.
