The improved packaging design enhanced display attractiveness and made the product significantly easier to unpack from the pallet (photo credit: GPA Photo)
In 2002, it was found that the Glimma tea light, one of Ikea’s bestselling products, had a greater ratio of air than any other Ikea package. They shipped in large cardboard boxes and sold in unwieldy bags of 100 pieces each that were not particularly attractive on display.
Two staff members were assigned to explore Glimma’s potential for better packaging and distribution. They soon formed a team with the product developers and candle suppliers. By mid-2003, a prototype solution had arrived from the supplier in China. Machines were modified to automate the production of the new design and the candle design tweaked to facilitate packing line efficiency. By the end of 2004, the improved Glimma packages were in Ikea stores.
Instead of randomly placed pieces in a large bag, Glimma tea lights were now neatly packed in four layers of 5 x 5 candles held firmly in place in a shrink wrap. Results:
• Packs per pallet were boosted from 252 to 360 (almost 30% load increase per unit)
• Pallets used per year were reduced from 59,524 to 41,667
• Number of trucks needed for warehouse-to-store distribution was cut by 200
• Carbon emissions from vehicle journeys were reduced by 21%
• New package design used less material, improving profit margins
• 2-mm reduction in wick length avoided snags, saved cost in shipping wicks
• New tertiary packaging was easier to handle, unpack and display, leading to an estimated 186 working days per year saved at stores
• More attractive in-store display
The epilogue to this story iterates the importance of management and supply chain collaboration. Due to the denser packaging, the load units were now so heavy they would exceed the weight allowed for semi-trailers in some European countries if they maximised volume utilisation.
The problem was resolved by balancing the load on the trucks with voluminous but lightweight products such as mattresses and sofas. To achieve this, products were consolidated via a “cluster supplier” (in this case, a mattress supplier) who consolidates its own goods with that of 7 to 24 other suppliers for despatch to distribution centres abroad.
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