Electronic Parts/Guidelines - infoHouse

PackinglUse: This is the labor involved in actually using a package or container. This should be
compared to the labor of using disposable containers and packaging. This should include labor to
both pack and unpack.
RepairlCleanhg: This is the labor required to repair, refurbish or clean a reusable item, so that it
may be reused.
Disposal: This is the cost to dispose of containers and packaging. A comparison of disposal costs for
reusable items versus disposable items should be made. Included in the comparison should be;
labor costs to sort and place items in appropriate waste containers, compactors or bailers,
lease or purchase costs for special equipment (e.& compactors and bailers), and
costs of waste material pick-up andlor disposal.
EquipmentlTooling: Capital and expense costs for equipment and tools needed to use or make dis-
posable and reusable items should be estimated. In many cases, out-of-pocket cost analyses are used
to compare reusable and disposable programs. If out-of-pocket analyses are used, all tools and equip-
ment can be treated as expenses or out-of-pocket cash flows.
6.3.2 Technical & Business Considerations
The following are some items that should be considered when evaluating, deVelOping or implementing
reusable programs:
Transportation Distance: Physical shipping distance and time greatly effect the inventory pipeline and
the total number of reusable items needed. When shipping distances are short, pipelines usually are
small, and the total number of reusable items is usually small. In addition, short distances result in
lower transportation costs, especially for returning reusable items. Pipeline and return costs are often
the largest costs in a reusable container program.
Example: Local Vendors
Reusable programs often work best when transportation distance is very short. For example, with
packaging programs for supplier parts, it may be easier to implement reusable programs with nearby
or 1 oca1 vendors.
. The pipeline will be short, so there will be fewer reusable items to buy.
Return shipping costs will usually be low.
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Many suppliers may have their own trucks, so return shipping may be free. This is especially
true when a local supplier has a truck coming back empty, after making a delivery.
With vendors very close, inventory on parts packed in reusable containers is likely to be very
low, because the vendor can make frequent deliveries. The low parts inventory requires fewer
reusable containers. There will be fewer or no containers holding parts in an IBM warehouse.
When the pipeline is small and easy to control, a reusable item is more likely to be used as an
integral part of material handling systems at both the supplier and IBM. This is especially true
with local vendors who make frequent deliveries to IEM. In addition, the vendor is more likely
to accept management responsibility for much of
repairing, scrapping reusable items).
the reusable program (e.g., purchasing,
Part Size: With supplier parts. larger parts are often better candidates for reusable programs, than
smaller sized parts.
There are fewer parts per container, so the containers make more round trips. This is a cost
benefit, if the container is Well designed, very durable, and has a high reuse life. When the life of a
program is close to or shorter than the reuse life of a container or reusable item, a higher number
of reuses makes a reuse program more easily justified.