CASE STUDY No. 9623

KEY WORDS FURNITURE, SHIPPING

Ethan Allen, Inc.
Ethan Allen Drive
Danbury, CT 06810

Contact: Tom Lowery, Packaging Engineer. Tel: 203-426-6177. Fax: 203-270-1892.

Summary

To ship upholstery, Ethan Allen has replaced large corrugated boxes with a system of two film bags and two smaller corrugated components, reducing package volume 60% and saving the company $1.15 million a year.

Action

Five Ethan Allen factories package and ship upholstery--about 800 pieces per day at each site. The old method was to totally enclose each piece in a corrugated carton. The new package is a proprietary system called LockPak (contact George Holbrook, Guilford Packaging & Fiber, 901 W. Market Center Drive, High Point, NC 27261).

LockPak works like this: a sofa, for example, is placed on a corrugated tray and covered by a polyethylene (PE) film composite bag. A corrugated end cap is placed over one end. Then, the entire structure is encased in a PE shrink film bag, which is usually stapled under the tray bottom. Finally, the entire "Couch Pouch" is heat-shrunk either with hand-held heat guns or in a heat tunnel.

Bags can be reused a number of times. Some retailers reuse them to wrap furniture for delivery to customers.

Compared to large rectangular corrugated containers, Ethan Allen's new shipping package allows products to be nested, reducing storage and shipping space by 35% to 50%. Damage claims have been reduced. Packaging engineer Tom Lowery, interviewed in Packaging Digest: "We experienced a dramatic increase in production speed and our labor was reduced as much as half over boxing, which required a great of folding and stapling, plus the warehouse space needed to store raw materials."

Because package sizes are irregular, Ethan Allen developed new truck-loading techniques with the help of computer-assisted design (CAD). Loading time has been reduced as much as 2 hours. In summary, compared to the old container the new package:

1. Allows products to be nested.
2. Enables manufacturer, handler, and customer to see contents.
3. Decreases damage claim rates (industry, 4%; Ethan Allen, 2%)
4. Reduces storage-shipping space 35% to 50%.
5. Reduces packaging materials storage space.
6. Increases production speed.
7. Reduces packaging labor by half.

Payback

Savings resulting froSm reduced labor and materials, $750,000; savings in distribution costs, $400,000. Total: $1.15 million. Ethan Allen estimates it has reduced its consumption of corrugated cartons by a million pounds a year. The cost to adopt the new system was recovered in a year. The installation of a shrink tunnel at the company's largest plant cut wrap time from the old 8-10 minutes using hand-held heat guns, to 1 minute in the heat tunnel.

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