CASE STUDY No. 9504
KEY WORDS= OVERNIGHT DELIVERY ENVELOPES, LIGHTWEIGHTING
Federal Express Corporation
3350 Miac Cove
Memphis, TN 38118
Contact: Henry A. Coats, Senior Quality Assurance Analyst. Tel: 901-360-5069. Fax: 901-360-5307.
Summary
Since 1981, Federal Express has continuously reduced the thickness of the paper-board used to manufacture the 9-1/2" x 12-1/2" FedEx Letter envelope. Thus far, the weight of the envelope has been reduced 40%. Combined with savings from the light weighting and redesign of other paper, paperboard, and polyethylene shipping containers, Fed Express has cut its costs $20 million a year.
Action
Federal Express picks up, sorts, and delivers more than 2.5 million letters and packages every day. In volume alone, FedEx is the world leader in overnight express delivery, with 1995 sales of $10 billion. As part of its service, FedEx provides shipping envelopes and boxes to its customers. Annual outlays for such supplies approximate $200 million. To control this significant cost of business, FedEx continuously examines its various containers and related shipping items in the search for ways to reduce size and weight without compromising integrity and appearance.
The FedEx Letter--the familiar, glossy white envelope large enough to hold 30 pages of 8-1/2" x 11" correspondence without folding--is a good example. In 1981 the Letter was manufactured from solid bleached sulfate (SBS) stock, 100% virgin fiber, calipering 20-point, or 20 one-thousandth of an inch thick. At that time, 20-point was the lightest stock available that met the company's requirements for envelope strength and printability. Today the paper industry (urged on by customers like FedEx) produces an acceptable 12-point stock, and FedEx uses that stock for its Letter, reducing paper requirements for this product alone by 40%. Considering that the company supplies more than 300 million FedEx Letter containers to customers per year, the overall reduction in cost is very significant.
Payback
The company estimates it has reduced the printing cost of the FedEx Letter envelope by almost 50% over the past 10 years by specifying lighter weight stock. Payback in outside supply cost is virtually immediate when a lighter weight is adopted. (Although the weight of the envelope would seem to be a factor in cargo capacity of FedEx airplanes, the company says cubic volume, not weight, is what limits aircraft capacity, and the cubic reduction of the FedEx Letter is insignificant in that regard.) FedEx works closely with its suppliers to improve the quality and cost of materials it purchases. "If I can improve my supplier's internal costs, he can pass the savings on to me," comments the senior quality assurance engineer.
FedEx is preparing to make a further change to the Letter envelope that will improve
its recyclability--by eliminating the sheet of polyethylene film that is laminated to one
side as a container for the airbill. "We don't want anything with our name on it
going into the landfill," the company official says.