Producers beef up the IBC benefits

By Staff -- Purchasing, 2/8/2001

Competition in the market for intermediate bulk containers (IBCs) is stiff. When the market emerged more than a decade ago and began siphoning demand from the bulk drum market, sales and demand for IBCs surged. And as with any growth market, many companies want their piece of the pie.

But in order to survive and thrive in today's business climate, producers must offer more than a quality product at a low price. Buyers are looking for improvements at each link of the supply chain. Those companies that offer top-notch service and continually develop innovative products in this market are the ones that get buyers' long-term business.

In response, many producers continue to align with other players to beef up their service offering, concentrating on providing total solutions to buyers' needs.

For instance, Greif Bros., one of the largest IBC manufacturers in the U.S., located in Delaware, Ohio, recently acquired the bulk shipping container business of Van Leer, which nearly doubled the total size of the company and gave it a strong global presence. Along with the global changes associated with the acquisition, Greif is also realigning its IBC business internally to better serve customers.

"Previously we had our IBC business separated from the product manufacturing and packaging services group, which is a closed-loop type of container cleaning, retrieval, reuse and disposal business for IBCs," says Sandy Donald, product manager of IBCs. "Bringing the two businesses together has led to improved efficiencies," he says.

In addition to the production cost savings from improved processes, which may be passed on to buyers, the company created a separate vendor management group. According to Donald, this service group will offer customers a variety of managed inventory, warehousing, container filling, and other bulk packaging services. "And this group will go above and beyond IBCs and drums," Donald says, adding that it will provide packaging-related products, such as bubble wrap, tape, pallets, etc.).

Another part of the company's restructuring was the creation of a packaging solutions group within Greif. "This is our next step in vendor-managed services," says Donald.

Essentially, this new group will encompass all of the company's product groups (industrial and corrugated), and seamlessly provide services as a total solution to buyers' bulk packaging needs. "The IBC business requires that producers perform value-added services at each stage of the product's life," says Donald.

In addition to the usual services, including bar-coding, retrieval, cleaning, reconditioning, container inspection and testing, the vendor management group will combine input from many of Greif's corporate functions, including manufacturing, engineering, research and development, testing services and logistics. Management services such as filing, inventory management, distribution, warehousing and leasing will also be offered through the group. Donald says that Greif will also source non-Greif products so that a customer can have the benefit of a one-stop shop.

New products

As buyers look for total cost reductions and added value from their bulk-packaging suppliers, producers continue to develop new products with performance enhancements:

Greif Bros. has concentrated its new product development efforts on a new plastic pallet used with its line of IBCs.

"IBCs made of plastic materials have a tendency to sag," says Greif's Sandy Donald. "And when IBCs sag, they don't rack well." Greif's plastic pallet is designed to guard against sagging, and it has a molded slope as part of the pallet deck. This is designed to support the IBC bottle and provide improved drainage of product, according to Donald.

Donald says that shipping pallets made of plastic have some other benefits: "Primarily, they won't splinter or chip like wood pallets, nor will they rust or spark, like those made of steel," he says. "Also, plastic pallets eliminate the problem of insect infestation, which can limit their service life and can also result in delays when shipping product through customs in foreign countries." Latin American countries, such as Argentina and Brazil, have strict customs regulations prohibiting the use of some wood products in bulk materials shipping and handling.