CASE STUDY NO. 9624

KEY WORDS: COMPACT DISCS (CDs), RETAIL OVER-PACKAGING

Sanyo-Verbatim CD Company, L.L.C.
1767 Sheridan Street
Richmond, IN 47374

Contact: Terry Lainhart, General Affairs Supervisor; Mike Glover, Shipping Department. Tel: 317-935-7574

Summary

In 1993, the so-called "long box" used to package compact discs (CDs) was phased out through an industry-wide program with strong consumer acceptance. Companies producing CDs, like Sanyo-Verbatim CD Company, eliminated about 70% of the retail package, conserving materials and reducing production costs.

Action

Before 1993, the standard CD retail package consisted of the plastic "jewel case" (the hinged, polycarbonate case with the CD inside) and the long box, a chipboard structure that doubled the length of the jewel case. The entire package was shrink wrapped. It measured 300 mm long x 150 mm wide. CDs were packaged this way because that's how retailers wanted them. The long box was considered desirable for:

  1. Marketing--it provided advertising space
  2. Security--it impeded shoplifters

Phase-out of the long box began as an environmental initiative of the National Association of Record Merchandisers, whose members had been receiving growing criticism from record buyers about the over-packaging of CDs. The association adopted the position that after a certain date retailers would require all CDs packaged simply in a jewel case--no long box.

Sanyo-Verbatim's experience in complying with this change possibly was typical of the industry. The company eliminated the machines that produced long boxes. It also had to break down and repackage the inventory of CDs in long boxes--about a million pieces. Special crews were hired for this 4-month task. And since the industry standard 30 CDs to a bulk shipment did not change, corrugated cardboard containers designed to hold 30 long boxes became obsolete.

The CD retail package now measures 150 mm x 125 mm, or less than half the old long box.

Payback

Compared to the old long box, the new CD package saves Sanyo-Verbatim about 30¢ in packaging cost per CD. This extraordinary unit saving is the sum of:

  1. Elimination of long box production and labor
  2. Elimination of long-box shrink wrap, a materials cost reduction of 70%
  3. From the reduction in volume, a 2-3 times increase in storage and shipping capacity
  4. 40% reduction in shipping weight per 30-count shipper-- to 7 lbs. from 12 lbs.

Savings in package disposal cost also accrue at the consumer's end from elimination of more than half of the old CD package.

Future

Manufacturers are looking at the possibility of packaging the CD in a cardboard jewel case. Also under consideration is a method used abroad--a paper sleeve for the CD, with a cloth outer wrapper.

 

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