MeadWestvaco Turns to GENCO for Damage Analysis Study

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MeadWestvaco Turns to GENCO for Damage Analysis Study

PITTSBURGH, Pa. - February 18, 2005 - GENCO announced today the results of a unique, two-phase study conducted by Mike Ghassali, senior vice president, GENCO Damage Research. The study substantiates that MeadWestvaco's Coated Natural Kraft® (CNK) folding cartonboard can help frozen food manufacturers reduce Unsaleables (damaged, crushed or destroyed merchandise due to mishandling) by 44 percent.

MeadWestvaco contracted GENCO to address a growing issue in the manufacturing industry, which in the past has been seen only as the "cost of doing business." The real cost to the consumer packaged goods industry alone for Unsaleables reached $2.57 billion in 2004.

"More than half the returns in the supermarket industry-57%-are due to damage coming from substandard packaging, mishandling, shipping practices, receiving and stocking practices," says Mr. Ghassali. "Therefore, it is our job to determine where the damage takes place in the supply chain, where the product is challenged, and make a significant reduction in that damage so that both the retailer and manufacturer profit," continues Mr. Ghassali.

MeadWestvaco approached GENCO Damage Research in August of 2003. GENCO was asked to test whether CNK, the company's most robust cartonboard packaging, protected frozen food content and carton integrity better than that of other paper boards.

"We needed to know what percentage of damage reduction would motivate a food manufacturer to change vendors for cartonboard selection," explains Dr. T.J. Green, Six Sigma expert and product development manager for MeadWestvaco.

MeadWestvaco turned to GENCO due to their expertise in Unsaleables management through the study of distribution, shipping, pallet configurations, and other factors contributing to product integrity and profit for the manufacturer. GENCO's Damage Research group researches every possible root cause of damage. Working with a broad base of manufacturing categories from grocery to consumer electronics, GENCO helps tighten up supply chains, improve retailer/manufacturer relationships, reduce damage and maximize profit.

Over a three-month period, GENCO studied 12 items for MeadWestvaco, tracking 3,500 cases from manufacturer through distribution pallet breakdown to delivery of 6,500 units into store inventory. At every step, GENCO tested environmental temperatures of plants, facilities and trucks as well as the condition of the packages.

Once following product through to retailer handling, the results showed that of the 10,700 products packaged in CNK cartonboard, only 166 were damaged which equates to a 1.55 percent damage rate. In comparison, the alternative packaging material produced a 2.77 percent damage rate.

"The results substantiated that, when CNK is used to create the frozen food carton, the package more effectively protects against crushing, denting and tearing and reduces the overall Unsaleable rate of product by approximately 44 percent," concludes Mr. Ghassali.

About GENCO Supply Chain Solutions
GENCO Supply Chain Solutions is North America's largest U.S.-based and a Global Top 50 third-party logistics provider and the recognized leader in Reverse Logistics. The company manages over 130 operations and 37 million square feet of warehouse space throughout North America for a diverse range of retail, manufacturing and government customers. The company provides initial and ongoing value through a complete range of solutions, including contract logistics, transportation logistics, parcel negotiation and audits, reverse logistics, damage research, product liquidation, pharmaceutical services, government solutions and supply chain technology solutions. For more information, visit www.genco.com.