How IKEA Shipping Technology Saves Money for Other Retailers

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See how unitization is helping major retailers save millions and improve supply chain sustainability

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How IKEA Shipping Technology Saves Money for Other Retailers

  1. 1. Web-Broadcast Unit Load Systems and the OptiLedge
  2. 2. Agenda <ul><li>Who is Unit Load Systems? </li></ul><ul><li>IKEA’s experience with the “Load Ledge” </li></ul><ul><li>Unitization- Case Studies </li></ul><ul><li>What is the OptiLedge? How to use it? </li></ul><ul><li>Benefits </li></ul><ul><li>Next Steps </li></ul>
  3. 3. Unit Load Systems, LLC (ULS) and OptiLedge <ul><li>ULS is the exclusive source for the OptiLedge in China </li></ul><ul><ul><li>Under authority of Inter-IKEA Systems, B.V. </li></ul></ul><ul><ul><li>Established in 2009 </li></ul></ul><ul><ul><li>Headquartered in Atlanta, Georgia </li></ul></ul><ul><ul><li>Offices in Atlanta, Hong Kong and Shenzhen </li></ul></ul>
  4. 4. Announcement From Inter IKEA Systems, B.V. <ul><li>In July 2009: IISBV announces that ULS will exclusively represent the OptiLedge in China </li></ul><ul><li>ULS formed in May of 2009 </li></ul>
  5. 5. Value Proposition CHINA Hong Kong/Shenzhen  Administration, Future Production Yanghzou  Production Unit Load Systems in China <ul><li>Main office and administration in Hong Kong </li></ul><ul><li>Billing and order management in Shenzhen through partner: OPL Agents Group Ltd. </li></ul><ul><li>Network of Sales Technicians throughout China </li></ul><ul><li>Future production planned for South China—projected start up SEP/OCT ’09 </li></ul><ul><li>Recycling program to be implemented before the end of 2010 </li></ul>
  6. 6. IKEA and the Load Ledge
  7. 7. High Profile 85 mm OptiLedge <ul><li>760, 991mm lengths </li></ul>High Profile 85 millimeter unit load carriers are designed for use with most common pallet jacks, forklift trucks and motorized pallet trucks.
  8. 8. Low Profile 45 mm OptiLedge <ul><li>760, 991mm lengths </li></ul>The Low Profile 45 millimeter OptiLedge is designed for use with most common forklifts
  9. 9. <ul><li>OptiLedge has undergone extensive handling and transportation testing using ISTA test methods in ISTA certified laboratories coupled with ASTM packaging and distribution standards. These standards include specialized analysis of shock, transportation vibration and both instantaneous and long term compression resistance; all within a range of real world environmental variations. </li></ul>OptiLedge Performance
  10. 10. OptiLedge Performance IOPP (Institute of Packaging Professionals) OptiLedge has Certified Packaging Professionals on staff ISTA (International Safe Transit Association) OptiLedge has Certified Affiliations since 2004
  11. 11. A proven performer, both in the lab and in the field. <ul><li>OptiLedge Test Unit Undergoing Shock and Vibration Testing </li></ul><ul><li>OptiLedge Test Unit Undergoing Compression Testing </li></ul>
  12. 12. A proven performer, both in the lab and in the field. <ul><li>Controlled Elevated Temperature Testing Chamber </li></ul><ul><li>Ambient and Elevated Temperature Testing Environments </li></ul><ul><li>Ramp to Load and Extended Compression Testing </li></ul><ul><li>Rotational and Flat Bottom Impact Testing </li></ul><ul><li>ASTM Level II Random Vibration Testing </li></ul><ul><li>Built in Safety Margins </li></ul>
  13. 13. Before Unitization <ul><li>Containers are often hand loaded at origin </li></ul><ul><li>Labor intensive at origin and destination </li></ul><ul><li>Packaging must be designed for individual handling </li></ul><ul><li>Off-loading commonly takes 12 man-hours </li></ul>
  14. 14. Common Importing Practices <ul><li>Marine containers brought to West Coast for trans-load operations </li></ul><ul><li>Strip marine container and trans-load onto domestic equipment </li></ul><ul><li>If floor loaded? </li></ul>
  15. 15. Common Importing Practices <ul><li>Domestic equipment commonly used to transport to a regional DC </li></ul><ul><li>For the domestic portion- product may be floor loaded again or unitized </li></ul>
  16. 16. After Unitization <ul><li>Labor at import DC dramatically reduced or eliminated </li></ul><ul><li>Labor reduced at each node in the supply chain (if previously floor loaded) </li></ul><ul><li>Traditional wood pallet replaced by OptiLedge for inland move </li></ul><ul><li>Elimination of backhauling of pallets, time and space handling in facilities </li></ul>
  17. 17. End Result <ul><li>Significant savings </li></ul><ul><li>Reduced damages </li></ul><ul><li>Reduction of manual labor </li></ul><ul><li>Elimination of wood pallets and associated backhauls, sorting, handling costs, storage and environmental issues </li></ul><ul><li>Leaner, smarter and more sustainable supply chain </li></ul>
  18. 18. Case Studies
  19. 19. Case Study 1: RTA Furniture <ul><li>North American based retailer importing RTA furniture </li></ul><ul><li>Implemented in fall of 2007 </li></ul><ul><li>Savings per container of $285 USD </li></ul><ul><li>Achieved through: </li></ul><ul><ul><li>Elimination of labor at import DC </li></ul></ul><ul><ul><li>Replacement of traditional wood pallet for domestic (in-land) move </li></ul></ul><ul><ul><li>Reduction of damages by unitizing at origin </li></ul></ul><ul><ul><li>Elimination clamp truck handling </li></ul></ul>
  20. 20. <ul><li>North American based general merchandise retailer </li></ul><ul><li>Time to off-load reduced </li></ul><ul><li>Damages significantly reduced </li></ul><ul><li>Customer achieved $134.00 per container in savings </li></ul>Case Study 2: Tool Box Product on OptiLedge Current Situation
  21. 21. <ul><li>Vendor to several Big-Box retailers </li></ul><ul><li>Savings of $288.00 per container </li></ul><ul><li>Reduction in labor </li></ul><ul><li>Significant reduction in damages </li></ul>Case Study 3: Game Tables Before Unitization Unitized Product
  22. 22. <ul><li>Eliminate under-hang </li></ul><ul><li>OptiLedge takes the shape of the product instead of the other way around </li></ul>Benefits: FLEXIBILITY
  23. 23. Benefits: ENVIRONMENTAL SUSTAINABILITY <ul><li>100% virgin co-polymer polypropylene, highly recyclable </li></ul><ul><li>Unit load weights dramatically reduced </li></ul><ul><li>Requires less fuel for transport thereby reducing carbon footprint </li></ul>
  24. 24. Benefits: ENVIRONMENTAL SUSTAINABILITY <ul><li>97% Reduction in Weight, Transport Expense and CO2 Emissions </li></ul>29,000 per 53’ Trailer 14,720 pairs 2.4 lb. per pair 48” X 40” Pallet 630 per 53’ Trailer 60 lb. each
  25. 25. Using the OptiLedge OptiLedge devices strapped directly to a unit load assembly
  26. 26. Next Steps <ul><li>Determine high impact products </li></ul><ul><li>Estimate savings on per SKU basis </li></ul><ul><li>Project team established and on-line project management launched </li></ul><ul><li>Implement SKU’s </li></ul>
  27. 27. Four Step Process <ul><li>Proven method that streamlines implementation </li></ul><ul><li>Scalability introduced for execution </li></ul><ul><li>All methods considered- scope broadened </li></ul>Step 1 Qualify/Identify Step 4 Ongoing Support Step 2 Validation Step 3 Ramp Up/Ship
  28. 28. Simple Project Plan
  29. 29. SUMMARY: <ul><li>Why not take a proven best practice from one of the world’s most successful and respected retailers and put it to use in your supply chain? </li></ul>

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