Paperboard cushioning computes for LEK

Whether it's shipping a $1ꯠ personal computer or a $5ꯠ computer server, LEK Technologies wants its products to please customers. That doesn't happen when the products are damaged in shipping. Yet this is what occurred all too frequently, until a little more than a year ago. That's when the Amarillo, TX-based computer maker began safeguarding its 40- to 60-lb computer products with paperboard cushioning material. The material, called Corrupad(TM), is made by Corrupad/USA (Bensenville, IL). It comprises 100% post-consumer recycled paper, including corrugated board, newsprint, magazine stock, and office waste paper. The materials are made into single-face corrugated, then coated with a thin adhesive layer and made into pads on hydraulic presses. After curing, pads are cut into L-shaped inserts for LEK. These inserts are designed by Corrupad/USA specifically for shipping computer products. LEK uses these inserts in a criss-cross pattern in cases, both on top of and beneath the computer components. Corrugated trays are used for the computer's keyboard, mouse, other small components and software. "Before Corrupad, we used mainly expanded polystyrene peanuts and inserts," says Lloyd Kruckeberg, LEK president. "Besides the fact that they're messy to use, they didn't protect our product very well. These computers are heavy and they tended to slide and shift in the box. It was so bad that in some cases product even fell out of the box." Kruckeberg separates damages into two types. One would be where the physical damage was severe enough that LEK would have to ship the customer a replacement unit. In this instance, when a computer store or a consumer opened a box with damaged equipment, "they would either refuse the shipment or ship it back to us," he explains. "Then we'd have to send them new product. Product losses alone cost us about $15ꯠ per year," he estimates. The second damage type was less severe, but costly to LEK nevertheless. An example would be where sound, video or hard-drive cards would come loose during shipping. These units were usable, "but it usually meant that the customer would have to reposition the cards properly to make the system work," says Kruckeberg. "That would tie up a $70-per-hour technician for about an hour until the customer's computer was up and running." This problem affected up to 10% of LEK's shipments. And in both cases, customers were dissatisfied. Seeking a solution Looking to restore integrity to its computer shipments, LEK began investigating packaging alternatives. "But even that was frustrating," Kruckeberg admits. "We looked into foam padding, but the costs to design the foam to fit our needs were so high that using that material just wasn't worthwhile. "We also worked with box companies who offered suggestions that either didn't adequately protect our product or simply didn't make sense," he says. "Others described what they could do, and they told us we needed to design around their capabilities. We're not CAD engineers of any sort," he quips. Finally, at the Comdex computer trade show in late '96, LEK hooked up with Corrupad/USA. A month later, LEK shipped a unit to the supplier so that Corrupad/USA could develop a cushioning solution. The two companies sent product shipments back and forth, with Corrupad/USA testing the cushioning until LEK deemed the inserts suitable for use. Besides improving its cushioning, LEK also made changes to its outer shipping case, principally for graphic appeal. "Our previous box was rather generic looking," Kruckeberg says. "We wanted to use a box that customers would recognize as LEK's, much like the cow-spotted box does for Gateway." These corrugated RSC boxes are letterpress-printed in black by Ward Packaging (Fort Worth, TX). LEK purchases the 275#-test, B- and C-flute double-wall shippers through local distributor Roberts Paper (Amarillo, TX). "We've developed a box with black print on the brown case so that it looks like a wooden crate," says the LEK president. "It looks really good, and we've received compliments from several customers on the box already." Customer satisfaction Customers, Kruckeberg notes, "have also made positive comments about 'how neat' the cushioning is, and that they'd have never thought of using these types of inserts. But the key advantage is that it has eliminated returns. I can't remember an instance of a product sent back to us that was protected by Corrupad," says Kruckeberg. Besides the savings in damaged product, "we save a great deal in shipping costs, and in the labor to handle damaged units and to pack new product for the customer," he notes. There are also benefits enjoyed in LEK's manual packing process. "In the past, we usually needed two people to pack a box," he continues. "We had a semi-automatic system where one person would depress a foot pedal to dispense peanuts into a box and another would pack product. It took about fifteen minutes to pack a box. "Now," he says, "one person can put both the product and the Corrupad inserts in the box and tape it shut in about six minutes. That's saving us about $5군 per year in labor costs." Kruckeberg adds, "Less time is spent cleaning up at the plant. We still use EPS peanuts for shipping smaller parts, but it's such a miniscule amount that our clean-up time is minimal compared to what it used to be. We now use Corrupad for nearly seventy-five percent of our finished products." He estimates that LEK ships between 500 and 1ꯠ boxes a month that include Corrupad. Shipments are made both to computer retail stores and directly to consumers. Current sales are nationwide. But in the next few years, LEK plans to begin exporting to Europe. Kruckeberg believes LEK will also protect those shipments with Corrupad. All of these advantages help LEK justify economically its switch to the material. "When you look at the savings in damage, shipping and labor that we now have, Corrupad costs us about the same, or even less than the EPS peanuts and inserts. But what's really unique for us," Kruckeberg concludes emphatically, "is that we no longer have damaged shipments and unhappy customers."