IKEA to phase out wooden pallets

Home furnishing retailer says it can save millions in transportation costs.
By Modern Materials Handling Staff
November 30, 2011 - MMH Editorial

Costco is not the only major retailer to take a hard look at its pallet program. Last month, IKEA, the iconic Swedish home furnishings retailer, announced that it will phase out wooden pallets on a global basis. Wood will be replaced with a shipping platform IKEA is calling the material area paper pallet.

“The objectives of this change are to decrease costs and create a more sustainable business by having less impact on the environment,” IKEA explained on its website. “This change will impact all functions within supply chain as well as all stores and suppliers in Europe. For example new handling and storage solutions need to be installed in store racking and supplier plants need to rebuild or adapt the packaging lines in order to use of alternative handling material.”

IKEA has been experimenting with alternatives to wooden pallets for several years now. Modern described how IKEA was using three standard, unique pallets at its operations near Savannah, Georgia as well as the Optiledge, a unique, recyclable plastic shipping platform that makes more efficient use of the space inside shipping containers.

According to a report from Rick LeBlanc of PackagingRevolution, the elimination of wooden pallets will “involve the upgrading of IKEA’s racking storage systems through the company to support unit loads built on paper pallets and the [plastic] Optiledge system.” LeBlanc added that “IKEA believes that it will achieve better fill rates in ocean containers and trucks.” Other reports indicate that IKEA believes it can save $193 million a year in transportation costs.

Both Costco and IKEA are examples of how leading companies are looking beyond the low hanging fruit for the next round of cost savings. They are also examples of the importance of a continued focus on the basics of materials handling that many companies take for granted.

Subscribe to Modern Materials Handling magazine

Subscribe today. It's FREE!
Find out what the world's most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Recent Entries

When DCs, plants, or any industrial facility needs more space, there are two basic options: going "out" by acquiring or building additional facilities, or "going up" by maximizing the cubic volume of existing facilities

PMMI connects end users and suppliers as they adapt to changing consumer demands.

Deployment of automated storage & retrieval (AS/RS) solutions has been delivering impressive improvements in labor or space savings within facilities for decades.

The total number of October shipments at 913,543 was flat compared to September, which was consistent with growth patterns in recent years, with 2014 up 2 percent, 2013 up 3 percent, and 2012 down 1 percent.

The secret to successful distribution center design is planning to make material handling equipment and software flexible and scalable.

Article Topics

News · Packaging · Pallets · Pallet Report · Costco · IKEA · All topics


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA