CASE STUDY No. 9647
KEY WORDS RETAIL GOODS, OVERPACKAGING FOR TRANSPORT
Target Stores
P.O. Box 1392
Minneapolis, MN 55440-1392
Contact: Jim Bosch, Manager, Environmental Department. Tel: 612-304-8499.
Fax: 612-304-3248.
Summary
Working with vendors to reduce unnecessary packaging of softlines merchandise, Target prevents 1.5 million pounds of excess packaging and saves $4.5 million in labor costs associated with unwrapping goods for retail display.
Action
Target Stores, headquartered in Minneapolis, is a national chain of 730 retail stores. When management became concerned that much of the merchandise shipped to Target included unnecessary packaging, a multi-disciplinary team of 20 employees (representing the Environmental, Quality Assurance, Distribution, Operations, and Special Projects departments) was assembled to study the packaging of softlines merchandise, primarily clothing. After observing stockroom procedures in several stores, team members concluded that a great deal of labor was expended removing packaging from clothing prior to placement on the sales floor. For example, a shipment from a sweater maker contained 20 identical sweaters, and each was wrapped individually in a plastic bag. Each separate wrapper had to be removed before display of the merchandise. Clearly, the entire shipment of sweaters could have been safely transported from the manufacturer in a single outside wrapper.
When vendors were contacted, the Target team learned that vendors were supplying the packaging they thought Target wanted--a gap in communications, evidently. The Target team decided to experiment with test shipments of clothing with reduced packaging, to see if the goods would arrive unwrinkled and presentable. After test runs proved successful, packing specifications were developed by Target in cooperation with vendors.
"Target's objective is to ship floor-ready apparel and minimize packing," the instructions say. "This will reduce costs and handling both for vendors and Target. This will also provide significant environmental benefits."
The instruction sheet illustrates how garments should be folded. Specifically banned are tape, tissue, clips, pins, and individual polybags. In letters of agreement with vendors, Target reserves the right to fine vendors who deliver merchandise not wrapped according to instructions.
In addition, Target has implemented a new hanger system. Clothing destined for display by hanger arrives from the vendor already on a hanger and with a size tab. When hanging merchandise is sold, hangers are sent to a company that refurbishes them and sells them back to vendors for reuse. Previously, stores reused good hangers and disposed of the rest.
Payback
In a single year, Target's program has reduced packaging by 1.5 million pounds and saved the company an estimated $4.5 million in labor costs associated with unwrapping merchandise. Vendors realized an estimated $3 million savings in reduced packaging material.
Additional waste prevented
The hanger refurbishing program has eliminated disposal of broken hangers by stores.
Now, the refurbisher grinds broken hangers for recycling.