CASE STUDY No. 9633
KEY WORDS BULK LIQUID CONTAINERS, REUSABLE; BARRELS
Madison Chemical Co., Inc.
3141 Clifty Drive
P.O. Box 1599
Madison, IN 47250-0599
Contact: Brian Fitzpatrick, Plant Manager. Tel: 812-273-6000. Fax: 812-273-6002.
Summary
The company has replaced 55-gallon drums with 350-gallon intermediate bulk containers (IBCs) for customer shipments, reducing costs at least $19,000 a year.
Action
Madison Chemical is a medium sized formulator of non-hydrocarbon based industrial chemicals used for conversion coatings, cleaners, lubricants, rust preventatives, and paint strippers. Previously the company stored and shipped product in 55-gallon drums, using some 3,000 drums a year. Empty drums were delivered to a reconditioning contractor for cleaning and testing at $10 per drum before refilling by Madison. Drums could run this cycle up to four times before they were scrapped.
Recently, Madison converted to the use of 350-gallon intermediate bulk containers (IBCs) to reduce the number and overall cost of containers, and to respond to customer concerns over drum handling and disposal. The IBC is constructed of stainless steel and plastic. With proper handling and cleaning it can be used indefinitely.
Madison found that replacing the volume of 55-gallon drums at $20 each with 350-gallon IBCs at $500 each saved about $19,000 a year in overall cost, even including the higher $30 per drum charge to recondition the IBC. These savings are calculated on the basis of purchasing 100 IBCs per year. Further additions to the inventory of IBCs are expected to add significantly to savings.
Madison also implemented a system for certain large customers wherein it replaced large numbers of circulating 55-gallon drums with IBCs that remain permanently at the customer's site and are refilled from bulk tanker trucks. The IBCs do not require cleaning because they are refilled with the same chemical. The IBCs used in this service are specially configured to include detachable, four-way-entry, reusable skids manufactured of plastic.
Payback
Madison Chemical estimates it earned back the investment in IBC containers for shipping alone (not including storage) in 6 months.
Additional benefits
