Return on equity (ROE) An accounting ratio used to
evaluate the overall financial performance of an entire
company. ROE compares the net earnings generated by a
company to the shareholders’ equity (net worth) of that
business.
Return on investment (ROI) An accounting return
measure (similar to RONA) that includes an inflation
adjustment to the historical accounting value of the
physical assets. ROI approximates the internal rate of
return calculated on a computer.
Return on net assets (RONA) An accounting ratio
used to evaluate the overall financial performance of an
established business. RONA compares the net earning
generated by a business with the net book value of the
physical assets employed in that business.
Rework (Q) Components or packages produced that are
of unacceptable quality but are acceptable for reprocessing
(denoted by Q and q
i
). Furthermore, the product is re-
claimable and some input items are reusable. If the
product cannot be restored to an acceptable quality, then
it becomes wastage. In packaging, one could argue that
the cost of selling off seconds is greater than the value
received. Costs associated with rework are less than those
associated with wastage, because rework does not cause
large amounts of lost product, only lost time. Some costs
incurred in the rework process are input item cost(s),
overhead cost, and opportunity cost. Even assuming wa-
stage is negligible, a decrease in rework will, in turn,
lower production costs and increase output. In general,
rework is an indicator of a process out of control.
RFP Request for proposal.
RFQ Request for quotation.
Rheology Study of the deformation and flow of matter.
Risk A perceived probability of failure or not achieving
the target(s) or goal(s) as originally established at the
start of the project as well as its consequences. Since we do
not live in a perfect world, no project or decision is risk
free. There are technical and political risks.
Risk, technical Risk strictly related to a new process,
machine, or component used in packaging a known pro-
duct, or a new untried product or package design. It is
logical to assume that additional money and time will be
expended in a direct relationship to the shortfalls that
occur in the first attempt. Sometimes, management will
deem a project that is partly successful to be satisfactory
because the costs and time to correct the shortfall are not
economical. In this case, although the project is techni-
cally a failure, politically it was approved. As a guideline,
more than 70% of all projects fail to reach the original
technical targets or goals. And less than half of all projects
that have shortfalls are completely corrected. In some
cases where the consequences are death, a low probability
is of little comfort and must not be traded off. Political risk
is a perceived probability of management’s ability of not
understanding the basic technical and marketing techni-
ques and philosophies in order to make clear timely, and
profitable decisions and to accept their consequences in
the marketplace. It is also related to management’s ability
to admit to their mistakes quickly, change direction and to
learn from the experience. Finally it relates to ego and
power, elements of which make up humanity and the
complexity of life. In some cases where the consequences
are death, a low probability is of little comfort and must
not be traded off.
Run speed The run speed of a machine is the instanta-
neous operating rate at some point in time. It is derived in
terms of the output rate at that time. For example, if a
machine is outputing at a rate of 300 (not necessarily
quality) containers per minute (cpm) at a given point in
time, then that is the run speed. As the time interval
increases, the output rate is always lower than the run
speed, because of stoppages, wastage, rework, and so on.
When the output approaches the run speed for any given
time period, then the line is approaching the steady-state
condition. In a perfect world, the output and the run speed
would be equal.
Run utilization The fraction of time the packaging line
is producing output at a set run speed divided by the total
time available for production. Note that changeover,
cleanup, and prep work are not included. This factor can
be considered the uptime during the producing time
period.
Runup period The time required after the package
changeout has been completed to get the given interval
actual run speed (or output rate) to exceed the 80% of
achievable run speed. The more correct term is transient
period. If the packaging process cannot move out of the
run up period quick enough, the loss in potential produc-
tion can be staggering.
Sales and use taxes Taxes imposed on vendors or
contractors and passed on to the purchaser on all applic-
able expenditures as required by state and local law.
Sanitize To reduce the microbial flora in or on articles
such as food-plant equipment or eating utensils to levels
judged safe by public-health authorities.
Sanitizer A chemical agent that reduces the number of
microbial contaminants on food-contact surfaces to safe
levels from the standpoint of public-health requirements.
Sanitizing can also be done by heating.
Schedule The plan for completion of a project based on
a logical arrangement of activities, resources available,
imposed dates, or funding budgets.
Schedule capability (C
p
) In simple terms, the sche-
dule capability is the relative measure of how capable or
how effective the actual packaging process is in producing
the appropriate volume of needed packages within the
planned plant operational time period or schedule. The
schedule capability relates to the ratio of the scheduled
run cycle time available divided by the actual package run
cycle time used. This definition is valid only if the actual
time taken is greater than the scheduled time. If the
actual time is less than die scheduled time, the capability
is the actual package run-cycle time divided by the
scheduled run-cycle time. The schedule capability is al-
ways equal to or less than 1. The term schedule capability
is sometimes shortened to just capability.
Scheduled package run cycle (SPRC) The scheduled
package (or product) run cycle refers to the time that
1300 GLOSSARY OF PACKAGING TERMINOLOGY AND DEFINITIONS