In 2012, IKEA rolled out a game-changing invention that may have escaped the attention of most shoppers. As part of its “Low Handling Material” initiative, new lightweight platforms hold up stacks of products throughout IKEA’s self-serve areas. The key difference is that the platforms, which double as shipping pallets, are now made of corrugated cardboard instead of wood. This seemingly simple innovation has revolutionized the entire supply chain of the world’s largest furniture retailer. Switching to single-use cardboard platforms—aka “paper pallets”—has enabled IKEA to move its products faster, cheaper, with less damage to the environment, and less injuries for its employees.
In many ways, ingenious cardboard solutions have been the key to the 74-year-old Swedish company’s success. Starting with its first knock-down furniture pieces 50 years ago, most IKEA furniture is transported, stored, and sold in boxes. IKEA admits that it’s as obsessive about a product’s packaging as it is with the design—if it can’t be boxed well, it’s likely not going to be produced. Packaging at IKEA is less about sexy labeling graphics, and more about securing items for transport and lowering delivery costs. “We hate shipping air,” is the animating mantra that informs many design decisions.
To execute this, IKEA employs about 40 packaging engineers who work hand-in-hand with designers from the initial phases of product development. As designers sketch out ideas, paper engineers plan how to efficiently pack each bolt, hinge, and plank—like jigsaw puzzles—for all IKEA products. After all, a piece of IKEA furniture is only good if can be shrink-wrapped, stacked, or packed in a flat box that will survive the journey from its factory to someone’s home.IKEA handles about 3.5 billion packages each year—every inch saved matters, every minute shaved counts.
Because IKEA handles about 3.5 billion packages each year—that’s 7.5 million units a day in 411 stores in 49 countries and hundreds of distribution centers—every inch saved matters, every minute shaved counts. A seemingly simple update in packaging for its GLIMMA candles, for instance, resulted in significant efficiencies. “These small and popular tea lights were previously sold as bags of 100 loose candles packaged in plastic. The new and improved packaging (neat shrink-wrapped stacks) saves 30 to 45 minutes a day in store handling,” says Alan Dickner, who leads IKEA’s packaging development unit. “We can fit 108 more packages on each pallet and—listen to this—because of the large volumes we move of this product, approximately 400 less trucks will hit the road [to deliver] GLIMMA.”
The cardboard revolution
Rolling out the paper pallet through IKEA’s global supply chain is the packaging department’s crowning achievement.
IKEA’s design consists of a flat piece of flat corrugated cardboard with a grid of glued-on paper “feet.” Packaging engineer Mikael Lindmark, who led the development, emphasizes that it wasn’t just a matter of making a paper replica of the standard wood shipping pallet. IKEA’s cardboard pallets are designed to be customizable to the quantity and shape of the shipment. There was also much thought put into the pallet’s rectangular feet. Calibrated for various unit loads, IKEA developed three standard sizes, from the smallest 1.5 ft long pallets to the largest 8 ft long standard platforms.
There are off-the-shelf paper pallets available, but IKEA was insistent on investing on the R&D to make sure its paper pallets will work throughout their vast value chain.
But as promising as cardboard pallets sound, the change has been met with some resistance. Warehouse and in-store employees had to be re-trained and contracts with suppliers had to be renegotiated. IKEA also had to invest in new forklift trucks and shelves to handle the lower-profile cardboard platforms.IKEA’s packaging department has calibrated exactly what type of cardboard is suited for each IKEA item.
There’s also the task of fighting the perception that paper is a weaker material than wood. Lindmark explains that the packaging department developed several quality control tests to ascertain the durability of corrugated cardboard for IKEA’s use. Detailed in sections of its 86-page packaging standards manual are thresholds for compression strength, bending stiffness, crush test, bursting, and water absorption capabilities. They’ve calibrated exactly what type of cardboard is suited for each IKEA item and have an approved list of cardboard vendors.
Depending on how you engineer it, cardboard pallets can be comparable in strength with wood versions. Chicago-based Green Label Packaging says they can make a cardboard platform that can support a unit load of 5,000 lbs. which is nearly the same for heavy-duty, block wood pallets. The unit cost for a US standard 48 x 40 inch wood pallet varies from $15 to $60; and cardboard versions of the same dimensions is in the $4 to $15 range.
Though cardboard can’t compete with plastic or metal pallets in terms of long-term durability, especially when it comes in contact with water, IKEA is betting that it’s sturdy enough to survive the one way trip to their retail outlets.
Over the last decade, several architecture and furniture companies have made a compelling case for cardboard’s strength. For instance, Pritzker Prize-winning architect Shigeru Ban is renowned for his sublime cardboard buildings in disaster areas. Ban has built various cardboard shelters, a paper concert hall, even a “cardboard cathedral” in Christchurch, New Zealand. Furniture companies like Karton, Charigami, and SmartDeco offer stylish and sturdy bookshelves, tables, and even bed platforms. UK designer Giles Miller crafts “heirloom” grandfather clocks and side tables all made of cardboard.
Making it stick
Dickner explains that IKEA was able to quickly switch to cardboard pallets because top management threw their full support behind it. IKEA Group CEO Jesper Brodin, who spent years overseeing the product range supply chain, and founder Ingvar Kamprad are champions of the paper pallet.
At IKEA’s Democratic Design media event in June 2016, former IKEA Group CEO Peter Agnefjall held up the paper pallet as one of two revolutionary innovations that will shape IKEA’s future. Along with the wedge dowel joints that allows customers to assemble furniture without tools, Agnefjall explained that a lightweight pallet was a crucial element in their mission to lower operating costs and cut prices in some markets.The switch to cardboard happened fairly quickly because IKEA has control of its entire supply chain.
The switch to cardboard happened fairly quickly because IKEA has control of its entire supply chain. Due to the volume of its orders, it’s in a position to require all its global suppliers to deliver goods only in paper pallets. Unlike smaller companies, it doesn’t have to rely on shipping companies that supply pallets for several customers (called “pooling”).
Victor Filipascu, chief technical officer of Bürstadt Furniture, which supplies kitchen cabinets and wardrobe for IKEA, attests that the single-use solution is also saving his company time and money. And instead of having to wait for IKEA-owned pallets to arrive, they’re now able to manufacture pallets in-house with cardboard bought from an IKEA-approved vendor. “Paper feet have a very high compressive strength, allowing us easily to put four pallets on each other for internal storage,” says Filipascu. “The only weakness is water resistance. It is not possible to store pallets outside on a wet floor, or in the rain. But that is no problem, because furniture should be kept away from humidity anyway.”
Promising numbersUsing recyclable cardboard instead of timber has cut IKEA’s CO2 emissions by 20%.
So far, the results of IKEA’s switch to paper have been impressive. Because the pallets are 90% lighter than wood versions, IKEA is able to fit more products in its delivery trucks and reduce fuel consumption overall. This has already resulted in 20% to 30% fewer trucks on the road, or 50,000 to 100,000 less trips each year. Using recyclable cardboard instead of timber also fits into IKEA’s sustainability goals: according to its latest sustainability report, the cardboard solution has cut IKEA’s CO2 emissions by 20%. A pallet lifecycle analysis affirmed that single-use cardboard was the greener option because they eliminate the need for empty wood pallets to be ferried back and forth.
IKEA is the largest global company that uses cardboard pallets in its supply chain, but it’s not the first one to do so. It’s learning from companies like GM, which used corrugated cardboard from 1991 to 2000. John Bradburn who leads the global waste reduction initiative at GM, explains that the company now uses a variety of pallets—wood, plastic, cardboard, and combinations thereof—depending on the item being shipped and where it’s going. “There really is no one-option-fits-all-scenarios situation for the auto industry, and I would suggest beyond,” he says. Bradburn said GM is monitoring innovations in pallet materials and engineering to find the most optimal solution.
But IKEA is resolute about cardboard and is pouring its energies into perfecting and promoting the paper-based delivery.
For IKEA store employees, the single-use pallets have eliminated the headache of sorting, storing, cleaning and returning wood shipping pallets to distribution centers. “When we open the store, it is much easier to maintain the commerciality and safety of the sales floor because we can keep reducing the size of the cardboard pallet as the merchandise sells, recycling as we go,” explains IKEA Portland store manager Alex Zini. “Plus, paper pallets are light. You can lift a pallet with two fingers. This not only opened up job opportunities to a more diverse and gender-balanced workforce in the logistics [department], but helped to significantly reduce back injuries in our store.” An empty four-foot wood pallet weighed around 50 lbs, compared to 3 lbs for a cardboard version of the same dimensions. The extra step to recycle the cardboard hasn’t been an issue because they break down pallets instead of storing towers of wood platforms in warehouses.
The success of IKEA’s cardboard program has also inspired other big companies to rethink how they ferry goods around the world. A 2017 study by Modern Materials Handling found that, while 93% of companies still use standard “stringer” or “block” wood pallet models, more companies are exploring alternatives to timber. IKEA, which has a patent for the cardboard pallets, says it wants to share the innovation widely. It’s meeting with companies like Dell, HP, Nike, and Procter and Gamble to discuss how they can integrate paper pallets into their own supply chain. “The more common it becomes, the equipment to handle it can be more common,” explains Dickner. “If more can jump into this, I think we can have a better world.”