If your company uses Hewlett-Packard or Canon printers or copiers, chances are you’ve been offered replacement toner cartridges by IKON, a national office supply company in Malvern, PA, that sells some 600 SKUs.
IKON (I Know One Name) operates two terminals that ship prepackaged cartridges and other products to 13 national distribution centers. These DCs serve as fulfillment operations for IKON’s national telemarketing sales force. Located at Roswell, GA, and Salt Lake City, the two terminals also remanufacture the toner cartridges, inspecting and refilling them with toner material.
Last summer, the Roswell and Salt Lake City facilities worked with Sealed Air (Saddle Brook, NJ) to install Vistaflex® protective air cushion packaging for the shipping of the remanufactured cartridges. Vistaflex cushions for IKON are fabricated using coextruded film that comes from technology gained in Sealed Air’s merger with Cryovac, says Gerry Stone, director of marketing for Sealed Air’s Special Products Group.
“We make the individual pieces by sealing two webs in various places and die-cutting them to a precisely measured shape that works for this product,” he says. “When inflated, they form a three-dimensional engineered package that recycles with low-density polyethylene.” Last year, the IKON cushions won Ameristar and WorldStar packaging awards.
Earlier, Scott Benson, IKON director of operations, had assumed responsibility over the plants and recognized the need for improved packaging. Not only would reduced shipping damage make the plants more profitable, it would also enhance the IKON image to customers.
When Benson took over the cartridge remanufacturing plant at Roswell, the plant was experiencing a damage rate of 5%. This translated into about $30ꯠ/yr that could be measured. An even larger loss, he says, was the loss of business from customers that didn’t even report the damage!
“If an end-user receives a box with a broken cartridge, I’m sure a lot of them just throw the product away, and we never hear from them again,” says Benson, noting that toner is just about the messiest product on earth. “They think our product is lousy, and we lose not just one sale but also repeat sales from that company or individual. We’re more concerned about losing the long-term sale than about the cost of replacing products that might have become damaged.”
Space was critical
The other issue important to IKON was the amount of space that packaging would require in its plants. Both IKON facilities have limited space, and the Vistaflex packaging cut the amount of space devoted to storing packaging by 95%. A pallet of flat, uninflated cushions will pack 12ꯠ cartridges, while a pallet of corrugated inserts will only pack 1ꯠ cartridges.
Even more important, says Benson, is that Sealed Air designed the cushions so that just three sizes would be required for IKON’s cartridges. That contrasts with the 10 sizes of corrugated inserts that were required in the past.
“In each of these plants, we have our production, raw materials storage, and packaging storage,” Benson reports. “So if we can replace 10 pallets of storage space with one-half a pallet, that’s huge for us. It literally could mean the difference of not having to move to a larger building or find additional warehousing space. That’s a benefit that’s hard to put a price on.”
Different packaging process
Along with the specially designed cushions, Sealed Air also provided each plant with manual bench-top BT1 inflation machines. To ensure that the inflated cushions don’t leak, IKON uses one worker to inflate all the cushions that will be needed for the following day. Each size of cushion is loaded into a tote.
“By holding them overnight, our packaging worker can examine them the next day to make sure we don’t have any leakage,” Benson says. “So typically we have a packaging assistant who spends a couple of hours each morning inflating the cushions we’ll need the next day. Then they’re stored overnight.”
Each plant has but a single packaging station. Two workers are used to package the cartridge. Before the cushions are placed around the cartridge, the cartridge itself is loaded into an aluminum foil light-tight bag that’s heat sealed and labeled. At the same time, the shipping box is erected and sealed. Then labels are applied.
Next, a worker slips one of the cushions over each end of the cartridge. In the center of each cushion is a strip of film that keeps the cartridge from moving laterally inside the box. This is important, Benson says, because there are usually vulnerable protrusions on the cartridge ends that could be damaged from banging into the wall of the box. With the cushion cradles in place, the assembly is inserted into the box, and the box is sealed for shipment.
Before the switch to Vistaflex, IKON workers had to take the corrugated insert, crease and fold it four different ways, and pull out some tabs before inserting the wrapped cartridge. Benson compares it to creating a wraparound burrito package.
Getting them back
Although creating the corrugated insert sounds like a lot of hand manipulation, that wasn’t the problem, the company says. The real issue is making it easy for the end user to recreate the insert to ship back the empty cartridge that’s being replaced. That’s the heart and soul of IKON’s business: the return of the empty cartridge, which is called a core.
Each box includes a prepaid United Parcel Service shipping label. “So we’re asking the individual at that company to take the new cartridge out of the box and load it into the printer or copier and then use its packaging to return the empty cartridge to us,” Benson says. “That way, they don’t have to discard the packaging, and we receive their old core.”
Although it’s not easy to track, Benson says that the end users tend to repack the cores more carefully with the new cushions. With the corrugated inserts, IKON often received the core in the box without the insert or with it used incorrectly to protect the cartridge.
Today, Benson says, most cores come back with the cushions. Even if they don’t remember how to put the cushions around the core, so long as they place the core between the cushions, the protection is “miles above nothing,” he says. “But it amazes us how many customers figure out how to use the cushions correctly.”
Lots of benefits
Since the Vistaflex packaging was introduced in June of last year, Benson reports, IKON has shipped about 150ꯠ cartridges without a single incident of reported damage caused by faulty inserts. “We still get some damage that is caused by shifting loads or careless forklift operation,” Benson says. “So our damage will probably never be completely eliminated. However, our research shows that package-related damage has disappeared.”
In addition, IKON plans to install a more automated inflation system later this year, as soon as Sealed Air makes it available.
Along with a lot of upfront testing, IKON also did a cost comparison of Vistaflex vs the corrugated inserts. “We looked at the overall costs, not just labor. While Vistaflex is a little higher cost upfront, when you factor in recyclability, the costs of damage, and the storage space, the two materials are just about a wash,” reports Benson.
“Even if our costs had increased, I think this would have been a better way to go,” he adds. “The biggest advantage for us is in customer goodwill and customer retention.” (AO)
