specialreport PACKAGING
PACKAGING THAT FITS
The new technology adopted by Staples, which it calls
“smart-size” packaging, was developed by Packsize
International, a Salt Lake City-based packaging solutions
company. The system uses specialized equipment that cuts
and creases box materials into the exact size needed for a
particular item or order. The technology replaces the use of
standard-sized corrugated boxes.
Staples is currently in the process of rolling out the technology across its 35 e-commerce fulfillment centers. (These
are separate from the DCs that serve the company’s retail
stores.) The number of machines in each DC depends on
the facility’s size and its packaging volume—some will have
one, others as many as eight. The first installation took
place in June 2012. Ralph expects the rollout will be completed across the network by the end of this year.
This might seem like a bold move for a company like
Staples, which takes a hard look at capital investments before
moving forward. But the decision to go with the Packsize
solution was a slam-dunk, according to Ralph. That’s largely
because it requires no capital expenditure upfront. Instead,
Packsize installs the machines at its own cost, profiting from
the sale of its proprietary corrugated stock.
Gallaway, who oversees the installation of the Packsize
equipment in the DCs, reports that the installation process
has not disrupted existing operations, and the cutover to the
technology has gone smoothly. “It really takes only a few days
to learn how to operate the machine,” he says. “We’re seeing
it take less than a month to get up to the productivity we had
when we were manually making boxes. It’s a very small learn-
ing curve.” Once the changeover is complete, he says, pro-
ductivity has actually improved over previous levels.
PRACTICING SUSTAINABILITY
Producing custom-sized boxes for each order, rather than
keeping an array of standard boxes in inventory, provides a
number of benefits for Staples. For starters, there’s been a
dramatic drop in the volume of packing materials used.
The retailer went into the project expecting to see a 60-per-
cent reduction in the use of air pillows and a 20-percent
reduction in the use of corrugated. Ralph reports that the
actual results indicate Staples has met or exceeded those
projections. The company estimates that the initiative
reduces its annual carbon footprint by 30,200 tons, or what
it says is the equivalent of about 120,000 trees.
It has also helped the company reduce transportation
costs slightly, although Gallaway describes those savings as
a secondary benefit. “We primarily wanted to reduce box
sizes and dunnage. We knew the rest would follow.”
The reduction in packaging waste also brings the
Framingham, Mass.-based company closer to another
important goal—making its operations more sustainable.
“Sustainability is an important part of our DNA,” says
Ralph. One of the pillars of Staples’ environmental sustain-
ability strategy, adopted in 2010, calls specifically for reduc-
ing operational waste.
The packaging initiative has also met its initial imperative.
The customers, whose voice drove Staples toward the
change, have responded. “We piloted this for a year before
we made the decision to deploy,” Ralph says. “We clearly saw
customer satisfaction metrics rise significantly. We have seen
those rise as we continue to put the technology in place.”
Ralph reports that Staples is also working with its suppli-
ers to reduce the amount of packaging they use on inbound
shipments. Staples’ goal is to trim suppliers’ packaging by as
much as 40 percent over the next three to five years. “We are
engaged in that conversation,” he says. He adds that the
company believes that if it made sense to reduce packaging
for its delivery business, then it made sense to do the same
thing across its supply chain.
“If we reduce packaging, we save money from an
inbound and an outbound perspective,” he says. “It is good
for the company. It is good for the customer. And it is good
for the planet.” ;
