EIP Implemented: Transforming NAIP Reconditioning Through Innovation

Using the systems implemented in Houston and Hutchins, similar automation has already been implemented in Delphi, Ind. and Cannon Falls, Minn. using newly purchased equipment. Additional implementation is possible at another six IBC reconditioning facilities.

Conclusion:

By completing these projects without CAPEX investment and using maintenance teams at the facilities, the financial benefit of the initial two projects was realized immediately. Cost savings of approximately $130,000 annual savings at each location is expected from these projects. Additionally, there is a cost avoidance of $150K at each location to install automated equipment and improve cash flow that would have been allocated to CAPEX. The monetary value of realized savings is $560K. The most significant impact of this EIP project is the improvement in working conditions for employees who previously manually power washed IBC cages. These employees can now be reassigned to less labor-intensive tasks in safer areas of the facility, reducing the risks associated with repetitive motion, noise, and high-pressure water. Additionally, the automated process enhances quality by ensuring a consistent wash for every cage.

Until recently, the Clarkston, Mich. facility manufactured black IBC bottles approximately eight times a year. After producing these bottles, the machine needed to be cleared of black colorant. This was done by creating transition bottles and using other purging methods. Each separate run of black bottles generated approximately 39,000 lbs. of excess regrind that could not be used for IBCs. Prior to this EIP project, Clarkston sold this regrind to a third-party.

The Mount Vernon, Ohio facility was tasked with evaluating whether the regrind could be incorporated into the PRC used for producing pallet components. Despite the regrind being significantly different from the PCR material, the team concluded that it could be mixed with the PRC at low levels without compromising the quality of the pallet components.

The Mount Vernon team determined how to properly blend regrind with the PCR and how to handle and store the regrind material without having to make capital investments for this project.

Conclusion:

Even though black bottle production is being eliminated, this EIP provided significant savings and demonstrates the value in collaboration between facilities. Historically, Clarkston sold the 39,000 lbs. of regrind for $0.06/lb. while Mount Vernon purchased PRC at $0.40/lb. Utilization of regrind from the black colorant purge in Clarkston, combined with additional regrind produced on two upcoming black runs in Mount Vernon to fulfill customer requirements, will generate approximately $40,000 annual savings by offsetting the purchase cost for PCR.

“The diversity within our product portfolio and network of facilities allows for many opportunities where locations can synergize to make the best use of our resources and materials. Good job by the Clarkston and Mount Vernon teams for identifying the potential for this collaboration and implementing a workable process,” commented Ed Konyen, NAIP Senior Vice President of Operations.