2001 HERSHEY CHALLENGE #1

Determine a cost effective way to package and protect Hershey gift items considering current labor cost and potential appearance enhancement.

Background Information

Hershey Direct is Hershey Food's Mail Order Catalog operation located at 200 East, Hersheypark Drive.  Hershey Direct sells and ships mail order gift products from its Valentine's, Easter, and Christmas catalogs.

In 1999, Hershey Direct created a fun and exciting new Internet site that displays many Hershey gifts that are for sale.  The site is very user friendly, and it makes it very easy to shop for these gifts without leaving the home or office.  With a couple clicks of the mouse, you can have a wonderful gift delivered to you as early as the next day.

Details of the Challenge

Hershey Direct produces hundreds of various products ranging from Holiday Towers to Classic Black Tins.  Check out our website at www.hersheygifts.com for a better understanding of the types of products produced at Hershey Direct.

After the assembly of each product and it’s placement in a cardboard shipping box, a worker fills each cardboard box with bubble wrap until the box has met its capacity. Bubble wrap is used to help protect the product during shipping.  Because each item is different, the placement of the bubble wrap varies.  Bubble wrap can be placed in the sides, inserted in between the products, and placed on top of the products.  The amount of bubble wrap also varies with each item.  The quantity of bubble wrap can range anywhere from 1ft. to over 20 ft. per box.  The average amount is approximately 6 ft. of bubble wrap in each box.  Bubble wrap comes on 250 ft. rolls and is either cut on the Instasheeter or manually separated at 12 inch perforations (See photo:Instasheeter).

Hershey Direct is looking for a cost effective way to fill and protect each package in the packing area.  This new alternative has to be effective in protecting the items being shipped.  No rattling or shifting of the product inside the box is allowed at any time.  An aesthetic quality should also be considered when developing a solution.  For various reasons, styrofoam (or starch based) peanut packing cannot be used. The material chosen must not have an odor, and must be in compliance with the Food and Drug Administration.

Additional Information

  • Bubble wrap comes on 250 ft. rolls @ $.0418 per ft. (See photo:Bubble Wrap)
  • The solution should be compatible with all the products produced in the packing area.
  • The solution should be easy to work with, ideally requiring no clean-up.
  • The solution should be environmentally friendly.  Recycling and waste control is a priority.
  • Hershey Direct recycles hundreds of sanitized cardboard boxes everyday.
  • The weight of the solution should be minimized.
  • Employees working in the packing area earn on average $8.00/hr.
  • Items are shipped in six-sided cardboard boxes which are sealed by a tape machine (See photo:Box Filled with Product).
  • Items shipped in the boxes include:  tins, glasses, jars, and ceramics.
  • Hershey Direct uses over 1 million feet of bubble wrap annually.

    Expectations

    1. Research various potential alternatives for packing that do not include bubble wrap. Purchasing new equipment is possible if the cost is justified.

    2. Develop cost effective methods that Hershey Direct could use to reduce costs for labor and materials. Estimate a cost to implement each method. Show results of a cost/benefit analysis as part of your presentation.
     
     



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