Crutchfield Saves on Shipping Costs with StarchTech

Chris Groseclose, senior director of distribution operations for consumer electronics merchant Crutchfield, recalls talking to a sales representative at a warehousing conference in 2006 about a new kind of environmentally friendly packing material that could save his company in fulfillment expenses.

Groseclose says he thought it was a neat idea, but didn’t “totally buy it. But we kept in touch for 18 months.” During that time, Groseclose traveled to American Girl Co. to see how this revolutionary packing material – known as StarchTech, which is manufactured onsite – works.

“After seeing it firsthand, I was convinced,” Groseclose says.

Crutchfield started manufacturing StarchTech pellets at is distribution center in Charlottesville, VA in January 2008 for use in packing products, replacing the polystyrene packing peanuts it had used.

StarchTech provided an on-site packaging production system allowing Crutchfield to convert a small pellet into a finished, environmentally friendly packaging product, Groseclose says. These biodegradable packing peanuts are easily disposed of by running warm water over them or by composting.

What’s more, shipping one trailer load of pellets is equivalent to 20-plus trailer loads of finished material, Groseclose says, resulting in 142 fewer trailer loads delivered in 2008 alone.

With the use of a small extrusion machine, Groseclose says Crutchfield was able to improve its customer relations, fulfillment processes and bottom line by using the technology supplied by StarchTech’s patented process and the EcoSystem Packaging Solution.

Since using the StarchTech packing peanuts, Groseclose says the annual freight savings has been as low as $70,000 and as high as $120,000.

He says the extrusion process melts the StarchTech pellets into a marshmallow, creamlike substance. “The moisture bakes out of it and when the product hits the air, a blade cuts them into packing peanuts each the size of a BB.”

Groseclose says the StarchTech pellets work better than the polystyrene for packing because they mold into the inside of the box. “We haven’t had any issues in three years. No instances of product failure. Literally, I’ve gotten about five calls in that time about goo inside the box. It’s been a really good program for us.”

One load of StarchTech pellets can last up to two months, Groseclose says. “Now, we’re right around $100,000-$120,000 in savings. You’re taking on a manufacturing process, but the process is easy.”

StarchTech representatives spent about a week at Crutchfield during the January 2008 launch, “making sure we were comfortable. The whole thing now is one of the least worrisome things in my world. They’re very hands-on and supportive. I am sold on this. Anyone doing void fill should look into this.”

Groseclose says the initial investment for Crutchfield was about $100,000, largely due to the cost of the extruder machine, along with new blowers, duct work changes, and some infrastructure. Crutchfield’s cost savings the first year paid for the extruder and installation, Groseclose says. “Not only are we much greener with our packaging, we are doing it with a significant annual savings.”

Crutchfield eliminated its dependence on petroleum-based peanuts by using a bioresin made from renewable cornstarch and potato starch, Groseclose says. One trailer of StarchTech resin pellets replaces 23 trailer loads of polystyrene peanuts, he adds.

StarchTech launched in 1996 when Ed Boehmer developed environmentally friendly products using starch technology. The StarchTech pellets are available to companies with large volume needs. The savings for companies come from: purchasing directly from the manufacturer; receiving two truckloads of resin in place of almost 40-plus truck loads of loose fill material; and from receiving a bio-based, eco-friendly packaging material that can be easily disposed of by the customer.

“They’re growing at a pretty good clip,” Groseclose says.

Jim Tierney (jim.tierney@penton.com) is a senior writer for Multichannel Merchant. You can connect with him on Twitter (TierneyMCM) and LinkedIn, or call him at 203-358-4265.

Partner Content

The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.
Strategies for Maximizing Mobile Point-of-Sale Technology - NetSuite
Learn the top five innovative ways to utilize your mobile POS technology to drive customer engagement, increase sales and elevate your brand.