Solutions
SAP’s returnable packaging solution
Reduce your waste and carbon emissions
Returnable Packaging makes it possible to manage the return of packaging. Reusing materials is a more efficient, cheaper, and more sustainable approach than recycling. It follows the principles of the circular value chain, enabling smart and efficient rethinking of company packaging logistics through the reduction of packaging waste and the associated carbon emissions. It also reinforces collaboration across partners along the same supply chain.
The challenge
Companies have long recognised the risk of climate change and the additional costs and taxes it entails. Natural catastrophes have multiplied across the globe during the last decade. Companies are now facing pressure from many sides to reduce their overall CO₂ emissions. They need to find levers to achieve their ESG objectives while pursuing sustainable sales growth.
Companies understand that they cannot sacrifice growth and profitability as they seek sustainability. To reconcile these seemingly competing priorities, they need to explore innovative solutions and technologies that enable them to achieve their environmental goals while continuing to grow their business.
Traditional supply chains are at the centre of this challenge. They create too much waste, and public scrutiny and taxes on them are tending to increase. The current volumes of production and sales are not feasible given the current global pressure to reduce waste and CO₂ generation. If nothing is done, sales and profits will drop. In Sales and Retail, regulators have already taken action, implementing anti-waste laws. First movers have begun programmes to minimise their environmental impact, following these new rules.
The solution
To reduce their emissions of CO₂ and waste, companies can find solutions in the principles of the circular value chain model. It enables more effective use of resources with the aim of reducing not only waste but also the associated CO₂ emissions. The reuse of products, materials and packaging is the best way to retain value while reducing waste generation.
Returnable packaging helps companies benefit from optimisation of their supply chain activity by using the power of a digital solution. This is extremely beneficial not only to industries with significant sales volumes, such as Pharmaceuticals and Retail (Personal Care, food and beverages), but also to companies looking to implement a virtuous local or regional supply chain in a short timeline.
After the initial investment, savings from returnable packaging are often realised quickly:
In the Zero Waste Hierarchy, the use of returnable packaging in business processes is a recognised way to reduce waste and CO₂ emissions.
Returnable packaging reduces packaging CO₂ emissions by up to 50%1
The global demand for sustainable packaging is expected to reach USD 358.3 billion by 2028. That implies a CAGR of 5.10% growth2 .
Industries with significant sales volumes, such as pharmaceuticals and retail (personal care, food and beverages, etc) benefit most from returnable packaging.
Pallets constitute 57.0% of the global returnable packaging market.1
Business Benefits
A returnable packaging solution will deliver multiple benefits:
- Environmental: reduce companies’ waste, contributing significantly to building a sustainable supply chain
- CO₂ emissions: reduce companies’ CO₂ emissions by eliminating the need to recycle or remanufacture
- Cost savings: reduce logistics and packaging costs by reusing packaging materials instead of disposing of them after a single use
- Improved supply chain visibility: returnable packaging processes are designed with tracking mechanisms that enable companies to monitor the location and status of their packaging materials throughout the supply chain
- Reinforced collaboration: with partners along the supply chain.
Solution Overview
SAP’s returnable packaging solution comprises three main processes:
- Selling and shipping goods with returnable packaging (consignment stock fill-up)
- Picking up returnable packaging stored at the client's premises (customer consignment stock pick-up)
- Selling returnable packaging to the customer if they are not returned (consignment stock issue)
Financial and physical monitoring of both the movement of goods and the returnable packaging are feasible at any time.
Why Deloitte?
Deloitte has the knowledge of business, the industry and SAP technology to provide SAP solutions supporting your sustainability objectives.
Thank you to Valentin Grouzis, a key contributor to this page.
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