At its Chihuahua, Mexico facility, Altec Electro'nica manufactures electronic products, including radios, amplifiers, servo motors for powertrain systems, and driver information clusters for Ford and several other automotive OEMs.

Given the handling requirements when producing and distributing electronic components, a returnable packaging program incorporating rugged and well-designed reusable containers is today, a key component of Altec's material handling and supply system. The returnable program not only protects components and facilitates supply chain efficiency, but also benefits the environment.

Getting to this point, however, took a little work.

A Goal to Be Clean and Green

Five years ago, Altec asked ORBIS to help achieve specific operational improvements to help make its "greening strategy" successful. The strategy is an ongoing project that focuses on keeping a clean environment (both inside and outside the plant) and saving money on packaging through a returnable container program. At that time, Altec wanted to implement a returnable packaging solution as a way to reduce costs associated with purchasing, storing and disposing of large volumes of expendable packaging.

Altec wanted to achieve 90% conversion of outbound parts from expendable to returnable packaging by 2000 and at least 50% for inbound parts from suppliers by 2001. Achieving these goals would satisfy its greening strategy.

Planning to Meet "Greening" Goals

The conversion plan began with ORBIS' analysis of packaging for all parts and to define the feasibility for switching from expendable to returnable packaging. In the process, consideration had to be given to a packaging system that:

• Eliminates lost or damaged parts
• Opens up floor and storage space
• Promotes easier handling of parts and containers through ergonomic packaging designs
• Reduces all costs associated with expendable packaging
• Uses containers made of recyclable material
• Improves performance through stackability, shipping stability and container cleanliness
• Improves cube utilization to reduce freight costs
• Uses containers that were compatible with other Altec material handling systems
• Initiates consistent deliveries of empty containers from sister plants and suppliers
• Reduces total system costs and secured payback on the new returnable packaging system within one year

A System to Satisfy Needs

An entire system of returnable containers and custom-designed, interiors, pallets and topcaps was recommended and developed with the input of Altec's end-users.

ORBIS used hand-held StakPak containers and interiors for 120 component parts. Interiors made of reusable polyethylene, cross-link foam protect parts, while reducing the use of disposable films and covers. Both are capable of withstanding extreme changes in temperature that affect a container's performance.

ORBIS structural foam pallets with seat belts and top caps met the requirement for stacking, securing and shipping the optimum quantities of containers. This met Altec's need for increased pallet and truck utilization.

Testing and De-Bugging the System

Once the returnable packaging was identified, Altec and ORBIS conducted real-world tests of packaging prototypes and the material handling system. The tests evaluated:

• Ease of packing and unpacking pallets and containers by workers
• Product and packaging response to shock and vibration for the containers' ability to protect its contents
• Trial shipments of full palletized loads of product for cube utilization and lineside usability

These tests were conducted to ensure that the containers and the system would work for everyone involved. Problems could be addressed immediately and solved on the spot or with additional input and changes solved before the system was fully implemented.

As the plans were taking shape, the production of certain Altec product lines was moved up. ORBIS then faced a very tight schedule-less than three weeks-to implement the program.

The reason? New parts (to be packed in the new StakPak containers and interiors) were needed to replace parts that were rendered defective when traditional expendable packaging failed.

Even with this tightened deadline, ORBIS completed its tests, procured the proper packaging and implemented a very successful solution that significantly improved Altec's performance, customer satisfaction and product quality.

Results Speak Volumes

During the past three years Altec has saved more than $5 million. Much of these savings are attributable to:

• Reduced expendable material management, including less labor for assembling expendable partition sets and boxes, and less waste disposal
• Better performance of manufacturing production and logistics due to simplified material handling process, easier tracking of containers, reduced freight costs, improved use of floor and storage space, a cleaner facility and improved product quality

Altec found that returnable and reusable containers are not only environmentally friendly, but they make good business sense within its supply chain.