Return on investment can pay bigger dividends than just dollars and cents. Customer satisfaction can be part of the return that will continue to pay into the future.
Here’s how Replacements Ltd., Greensboro, North Carolina, got a better return on its packaging material investment and improved the quality of its service.
Replacements Ltd. helps customers locate and replace cherished items such as rare and discontinued china, crystal, silver and collectables. Some items take more than 10 years to find for a customer, so it’s vital the piece be unharmed.
“Replacements Ltd. began 23 years ago as a hobby and has grown to a $70 million business with 592 employees,” says Dotti Porter, order processing manager at Replacements Ltd. Increasing sales volumes and high standards for customer satisfaction prompted the company to review its packaging methods in search of a better return on its packaging material investment.
The pursuit for new packaging material began as the company searched for a better way to pack crystal stemware. “These items have to be packed one piece at a time,” explains David Winship, sales representative for Sealed Air Corporation. “The options considered had to accomplish the company’s return on investment goals of increased production, decreased shipping costs and creation of a better work environment for employees.”
The evaluation process led to Sealed Air’s Korrvu retention and Korrvu suspension packaging as the best solutions. The retention packaging material is used to pack lower profile items such as cups, saucers, dinner plates and platters. It uses a proprietary retention frame and elastomeric film to hold the china pieces securely in place during shipment.
When the side flaps of the corrugated retention frame are folded up, the resilient film is loosened, creating an insertion pocket. The product is placed in the pocket between the film and corrugated retention frame.
When the flaps are folded down, the film, which is attached to the corrugated frame, stretches over the product and holds it securely in place. The china is then placed in a corrugated shipping box.
The suspension packaging material is designed for larger pieces with more height such as gravy boats, teapots, urns and vases. The suspension packs hold the fragile item between two membranes of elastomeric Korrvu film to keep the item securely in the airspace of the shipping container and away from the sides of the box.
At the packaging station, a suspension frame is placed in the bottom of the box and the product centered on the film membrane. The top frame is placed over the product and pushed down, stretching the film around the product, completely suspending it in the center of the pack. Closing the box holds the frames in position to protect the product during shipment.
Since the retention and suspension packaging material are custom engineered to meet customer requirements, Sealed Air worked with Replacements, Ltd. to understand its business and packaging objectives. The company processes more than 10,000 orders per week at its 225,000 square foot primary facility. Orders are processed seven days per week but packaging is limited to five days a week.
Because of the items’ fragility, there is no automation in the facility. Orders are filled manually by 74 employees.
When an order is received, the item is retrieved from one of the 60,000 shelves in the 16-foot storage stacks. After retrieval, a quality check is made to inspect for damage. The item is taken to the packaging area; 23 packaging stations with one person at each station.
Before Korrvu packaging, the company processed an average of nine orders per hour. Now they process an average of 22 orders per hour. Standardization allows the same material to be used on many different products. Guesswork about what kind and amount of packaging material to use has been eliminated.
The easy-to-use packaging process requires minimal training time, which helps the company, especially during the busy holiday season when orders double and temporary employees are used.
The new material provides a clean, protective package and reduced shipping costs. For example, previously packaging a platter required a large box and a lot of cushioning. Although the package weighed only three pounds, the 23-pound shipping rate was charged due to the dimensions of the box.
Now, box size has been reduced and the three-pound rate charged, resulting in significant savings in shipping costs, a factor often overlooked in defining ROI.
The new packaging process also improves the ergonomic environment for employees. In the previous set-up, repetitive use of tape guns was thought to cause problems such as carpal tunnel syndrome. The system is now easier to use and employees report less fatigue.