Packaging Case Study: A Vendor's Perspective

Use of Slip Sheets at ICI Paints

Background

ICI Paints World Group focuses on three core markets in the paint industry: decorative paints, autobody refinish coatings, and coating for metal cans and lids used by major can manufacturers throughout the world (SIC code 2681). In North America, ICI's decorative paints group manufactures and markets paints under the Ameritone, CIL, Decratrend, Devoe, Fuller-O'Brien, Glidden and Sinclair names.

ICI Paints is a business unit of Imperial Chemical Industries (ICI), headquartered in London, England. In 1995, ICI had sales of $15.9 billion.

The ICI decorative paints plant in Oakwood, Georgia, is dedicated to the manufacture of waterborne latex pains, including no-VOC (no volatile organic compounds) paints. Only about 5-10 percent of the facility's output is shipped within the Atlanta region; most is shipped elsewhere.

ICI Paints currently is distributing Glidden-branded product to Home Depot on slip sheets. According to Steve Ernst, Operations Customer Service Manager, the reasons are twofold; the use of slip sheets:

• Adds value to Home Depot, one of ICI's best customers.
• Is environmentally superior to wood pallets.

When Home Depot announced its slip sheet program to vendors," said Ernst, " we knew it would be a difficult transition. However, ICI continues to look at its operations to improve environmental performance, and we were committed to help Home Depot with its cost-saving and environmental objectives."

Ernst adds, "I also hated seeing hardwoods from our Georgia forests-popular, ash and oaks-being used for wood pallets. Slip sheets offer an environmental improvement."

Before and after slip sheets

Before, ICI Paints facility in Oakwood used about 150,000 to 200,000 wood pallets annually. Individually, these hardwood wing pallets (30" x 42") weigh about 35 lbs. and cost about $6. This compares to the slip sheets that weight about 2 lbs. and cost $1.50 each. Now about 33 percent of product from the Oakwood facility is slip sheeted. Annually, this saves ICI about $297,000 in purchasing costs and easily offsets the capital investment they made of approximately $70,000 for equipment and a slight increase in labor costs. Additionally, slip sheets eliminate about 1,089 tons of wood from the waste stream each year. Ernst hopes that more customers will accept shipments on slip sheets so more product can be shipped this way.

Meanwhile, ICI Paints still receives and uses large numbers of wood pallets. Before, pallets unsuitable for reuse went to the local landfill, but now a company takes all of them and keeps many out of the landfill by repairing and reselling the salvageable ones.

ICI Paints is not benefiting from freight savings because their truckload carrier charges a flat rate, regardless of weight. In contrast, companies that use less-than-truckload carriers (LTL carriers) that charge by weight can benefit from reduced shipping costs.

Implementation

Making the switch to slip sheets was "a big challenge" in Ernst's words. New equipment, finding the right slip sheet, and employee training were needed.

New equipment

ICI Paints uses two types of new equipment: a push/pull attachment that goes onto forklifts and a slip sheet dispenser attached to an automatic palletizer. ICI was able to get by with two push/pull attachments costing about $8,000 each, and modifications had to be made to the forklifts to accommodate the push/pull attachments. The slip sheet dispenser cost $35,000. Also, a modification was made to an in-line stretch wrapper for use with the custom-made slip sheets. Altogether, capital costs were about $70,000.

Custom slip sheet

ICI Paints has a liquid product, shipped in fiberboard cases (4 gallons to a carton) and in plastic 5-gallon buckets. The combination of the plastic buckets on a plastic slip sheet led to too much shifting in transport. ICI met with its slip sheet vendor, Plastic Slip Sheets, USA., to brainstorm a solution. A custom slip sheet was created to meet the needs of shipping product.

Employee training

Initially, employees were concerned about being slowed down. Forklift operators have to be more careful, and with a liquid product; if a container breaks, it's a mess. Ernst found that it takes more time to load a truck when goods are on slip sheets, but the cost is not overwhelming. "ICI has not had to hire any additional employees due to slip sheeting, but does pay more overtime at peak times."he says. Also, the company has a "highly skilled work force so the transition to slip sheets was not a major issue." Ernst adds, "Using the slip sheeting equipment is not complicated; it just takes getting used to the new equipment. The more employees use the slip sheet equipment, the more proficient they become."

Evaluation of slip sheets

Savings or costs to ICI...

• Avoided disposal cost: none, old pallets handled by local recycler
• Loss of recycling revenue: none
• Handling costs: (see labor costs)
• Labor: $1,000 savings per year from unloading slip sheets versus wood pallets (It is quicker to unload incoming shipments of slip sheets than pallets); $62,000 additional labor costs per year associated with using the slip sheets.
• Purchasing: $296,000 savings in pallet cost per year. Slip sheets are less expensive.
• Freight: No savings to ICI because they pay a flat rate.
• Storage: Cost neutral, still use about 5,000 sq. feet to handle incoming and outgoing pallets. Only about 33 percent of shipments are on slip sheets.
• Tracking/administration: The slip sheets are not returned to ICI Paints so they do not require any special tracking.
• Payback period analysis: The savings on pallet purchases paid for the new equipment fixed costs in less than three months.
• Savings to shipper: Unknown, but shipper should benefit from fuel savings that result from not having to ship heavy pallets.
• Savings to recipient/customer: Home Depot saves by not disposing or managing 66,000 incoming wood pallets for recycling. Slip sheets are much easier to manage because they are light and compact.

Environmental impacts

• Reduction in wood use: saves about 1,089 tons of wood annually with the potential for more if slip sheeting is used for products shipped to other retailers
• Disposal reductions: fewer wood pallets to dispose or otherwise manage, slip sheets are recycled by customer (Home Depot).
• Fuel/transport reduction: reduces fuel emissions as the slip sheets are lighter to transport than wood pallets; also fuel is saved as a result of transporting one truck load of slip sheets for every 25 truck loads of pallets.

Advice to other businesses

Steve Ernst suggests, "Be open minded. Don't assume your product isn't suitable for slip sheeting. Most products can be adapted to the slip sheet environment." He adds, "Be patient. Make a commitment to the program. Also, you need someone to champion the effort for it to succeed."

Once a critical number of vendors and retailers use slip sheets, many of the existing barriers will be overcome. Fork lift operators will be more proficient at maneuvering slip sheets, the necessary infrastructure will be built, and many resources can be saved to the benefit of all.

For More Help...

ICI Paints
Steve Ernst
Oakwood, Georgia
Phone: 770-967-2030, extension 251
Fax: 967-8498

• List of companies that sell or make slip sheets and related equipment.