How IKEA Shipping Technology Saves Money for Other Retailers

© 2009 Inter IKEA Systems B.V.

OptiLedge® is a Registered Trademark of Inter IKEA Systems B.V. and is sold in China under license by Unit Load Systems, LLC and its authorized representatives

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Unit Load Systems and the OptiLedge



Agenda

Who is Unit Load Systems?

IKEA’s experience with the “Load Ledge”

Unitization- Case Studies

What is the OptiLedge? How to use it?

Benefits

Next Steps



Unit Load Systems, LLC (ULS) and OptiLedge

ULS is the exclusive source for the OptiLedge in China

Under authority of Inter-IKEA Systems, B.V.Established in 2009Headquartered in Atlanta, GeorgiaOffices in Atlanta, Hong Kong and Shenzhen



Announcement From Inter IKEA Systems, B.V.

In July 2009: IISBV announces that ULS will exclusively represent the OptiLedge in China

ULS formed in May of 2009



Value Proposition

CHINA

Hong Kong/Shenzhen Administration, Future Production

Yanghzou Production

Unit Load Systems in China Main office and administration in Hong Kong

Billing and order management in Shenzhen through partner: OPL Agents Group Ltd.

Network of Sales Technicians throughout China

Future production planned for South China—projected start up SEP/OCT ’09

Recycling program to be implemented before the end of 2010



IKEA and the Load Ledge

Product CategoryThis and

That Accenten Textile Lighting Furniture Carpets TotalMoney saved per container (SEK) 2,050 2,025 2,325 975 1,625 2,475 1,875 Money saved per container (USD) 307 303 348 146 243 370 281



High Profile 85 millimeter unit load carriers are designed for use with most common pallet jacks, forklift trucks and motorized pallet trucks.

High Profile 85 mm OptiLedge

760, 991mm lengths



The Low Profile 45 millimeter OptiLedge is designed for use with most common forklifts

Low Profile 45 mm OptiLedge

760, 991mm lengths



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.

OptiLedge Performance



OptiLedge Performance

IOPP(Institute of Packaging

Professionals)

OptiLedge has CertifiedPackaging Professionals

on staff

ISTA(International Safe Transit Association)

OptiLedge has CertifiedAffiliations since 2004



A proven performer, both in the lab and in the field.

OptiLedge Test Unit Undergoing Shock and Vibration Testing

OptiLedge Test Unit Undergoing Compression Testing



A proven performer, both in the lab and in the field.

Controlled Elevated Temperature Testing ChamberAmbient and Elevated Temperature Testing EnvironmentsRamp to Load and Extended Compression TestingRotational and Flat Bottom Impact TestingASTM Level II Random Vibration TestingBuilt in Safety Margins



Before Unitization

Containers are often hand loaded at origin

Labor intensive at origin and destination

Packaging must be designed for individual handling

Off-loading commonly takes 12 man-hours



Common Importing Practices

Marine containers brought to West Coast for trans-load operations

Strip marine container and trans-load onto domestic equipment

If floor loaded?



Common Importing Practices

Domestic equipment commonly used to transport to a regional DC

For the domestic portion- product may be floor loaded again or unitized



After Unitization

Labor at import DC dramatically reduced or eliminated

Labor reduced at each node in the supply chain (if previously floor loaded)

Traditional wood pallet replaced by OptiLedge for inland move

Elimination of backhauling of pallets, time and space handling in facilities



End Result

Significant savings

Reduced damages

Reduction of manual labor

Elimination of wood pallets and associated backhauls, sorting, handling costs, storage and environmental issues

Leaner, smarter and more sustainable supply chain



Case Studies



Case Study 1: RTA Furniture

North American based retailer importing RTA furnitureImplemented in fall of 2007Savings per container of $285 USDAchieved through:

Elimination of labor at import DCReplacement of traditional wood pallet for domestic (in-land) moveReduction of damages by unitizing at originElimination clamp truck handling



North American based general merchandise retailer

Time to off-load reduced

Damages significantly reduced

Customer achieved $134.00 per container in savings

Product on OptiLedgeCurrent Situation

Case Study 2: Tool Box



Vendor to several Big-Box retailers

Savings of $288.00 per container

Reduction in labor

Significant reduction in damages

Case Study 3: Game TablesBefore Unitization Unitized Product



Eliminate under-hang

OptiLedge takes the shape of the product instead of the other way around

Benefits: FLEXIBILITY



Benefits: ENVIRONMENTAL SUSTAINABILITY

100% virgin co-polymer polypropylene, highly recyclable

Unit load weights dramatically reduced

Requires less fuel for transport thereby reducing carbon footprint



Benefits: ENVIRONMENTAL SUSTAINABILITY29,000 per 53’ Trailer

14,720 pairs

2.4 lb. per pair

48” X 40” Pallet

630 per 53’ Trailer

60 lb. each

97% Reduction in Weight, Transport Expense and CO2 Emissions



Using the OptiLedge

OptiLedge devices strapped directly to

a unit load assembly



Next Steps

Determine high impact products

Estimate savings on per SKU basis

Project team established and on-line project management launched

Implement SKU’s



Four Step Process

Proven method that streamlines implementation

Scalability introduced for execution

All methods considered- scope broadened

Step 1 Qualify/Identify

Step 4OngoingSupport

Step 2 Validation

Step 3 Ramp Up/Ship



Simple Project Plan

LegendOn scheduleCautionOverdueComplete

Task # Description Due Date Responsible Parties Dependencies Status Comments1.0 Select SKU1.01 Confirm approximate volumes1.02 Diagrams, pictures of packaging1.03 Outline of current supply chain1.04 SKU confirmed by all parties

2.0 Validation2.01 Unit load design proposed2.02 Stack test complete2.03 Road test complete2.04 Unit load design accepted2.05 Business Case2.06 Commercial arrangements accepted by retailer

3.0 Ramp Up/Ship3.01 All supplies secured af factory3.02 Commercial arrangements accepted by factory3.03 On site program overview completed3.04 On site training complete3.05 Shipping begins

4.0 Ongoing Support4.01 Establish schedule of follow up check in meetings4.02 Confirm communication plan for issues4.03 Quarterly reporting (if necessary)4.04 Annual reporting (if necessary)

Four Step SKU Implementation Plan

©2009 Inter IKEA Systems B.V.OptiLedge®is a Registered Trademark of Inter IKEA Systems B.V. and is sold exclusively in China by Unit Load Systems, LLC and its authorized representatives

Four Step Process

Step 1 Qualify/ Identify

Step 2 Validate SKUs

Step 3 Business Case

Step 4OngoingSupport

Step 2 Validation

Step 3 Ramp Up/ Ship



SUMMARY:

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?

How IKEA Shipping Technology Saves Money for Other Retailers

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