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Pro-Active Management Spurs Growth of Canadian SPF Cut Stock Business
Palliser Lumber Sales Balances People, Production, Quality and Safety
By Rick LeBlanc
Date Posted: 9/1/2004
Palliser has annual
Palliser was launched initially as a wholesale lumber business in 1979 by
An avid recreational basketball player,
“We had a vision to create some value, and our version of that was from low-grade material,” said
Working with people to help them solve problems was a realm in which Bob had plenty of experience. He spent 16 years working in a management role for the
While working for the government he came to meet and know Howie Kroon. A senior entrepreneurial focused business advisor with a major national firm, Howie networked with
By the time Palliser moved from
“Crossfield welcomed us with open arms,” recalled
Palliser’s first new building was constructed in 100 days under
“We continued to invest in people and technology as we grew,” said
Palliser’s management practices have been recognized by the Canadian business community. The company has been honored as one of
The main plant has six work stations, including two high speed multiple trim saw lines for larger orders of pallet stock, one of them utilizing a Newman KM-16. Both include multiple notching machines. Another line is equipped with four Precision chop saws for custom cutting and odd lengths. The plant also contains a planer-rip line for stud production and a second rip line for shorts. One area is devoted to making fencing material with a new machine recently developed by Palliser’s maintenance staff, which has built or modified much of the equipment to meet the company’s requirements.
Palliser prefers circular resaws over bandsaws, and the plant is equipped with Producto and Forestech circular resaws. Two full-time saw filers maintain the company’s saw blades.
The company’s award-winning approach to business centers on a balance of essential components, according to Howie, now chief financial officer and chief operating officer. “When you look at the fundamentals of Palliser,” he said, “it’s the people, the quality, the safety, and the production. Those are the four factors.” It is important to strike a balance between them, he added, in order to keep the business on a steady keel.
Palliser is very strong financially. For example, the company has written off only about $20,000 in bad debt since 1991 – a small amount considering the company’s sales volume.
“With Howie and Pat, we are really, really strong on the financial side,”
The Next Order
The sales department prides itself on always being accessible. “The office is always staffed,” Aldis said, “so if a customer calls, there is a
“Our main focus is quality at a reasonable price,” said Jay, a 13-year Palliser employee who has worked his way up through the ranks. After a stint stacking lumber, Jay became a certified grader and then held a number of positions in quality control and shipping and receiving. He joined the sales staff five years ago. “Probably 95 percent of our business is repeat business,” said Jay. “That’s where the quality stands out -- if you are getting that repeat business.”
Consistency in lumber quality is a key along with on-time delivery. “We have products in any price range, but if you buy a certain product, you know what you are going to yield,” Bryce said.
Like Jay, Bryce also has worked his way up through the ranks. He worked in sales for another company for several years in order to gain experience before returning to Palliser a few years ago.
When making a sale, Palliser commits to delivery within a given week and maintains close to 100% on-time delivery, according to Bryce. “Our production is always on the ground on time,” he said. “If there is a problem, it is with truck availability.”
“Just-in-time delivery has become more and more the norm in the industry over the last several years,” Jay added. “Customers don’t want inventory on the ground, so they are using the last pallet. They want the next load on the ground. That’s part of the industry at this time.”
Palliser is strategically located close to
Most customers are understanding when trucking availability limitations and cost versus delivery time trade-offs are explained. “We know that at certain times of the year you just can’t get into
While Palliser sells across the
At the end of the day, Jay noted, Palliser’s goal is not to get the customer’s order – it’s to get the next one after it.
Palliser provides training for employees and also rewards employees for superior performance. “Our uniqueness is that we are pro-active,” Howie observed, “the theory being that if you treat your people better, and we do some interesting and unique things, then you get better productivity and better retention.”
During interviews for this article, members of the Palliser management team were unified as they discussed the company vision, quality control, employee empowerment, and other aspects of management.
The Palliser management team puts a strong emphasis on empowering rank and file employees to make decisions. “The unique culture that
“If you have a company where only one person is making all the decisions, as the company grows a greater and greater bottleneck occurs,” said Howie. “I think we have really worked hard to push some of that decision making downward. In the end, the ability to make decisions is a motivator.”
Being empowered to make decisions keeps employees motivated; they want to work because their job is engaging. The company also awards bonuses as an incentive to help retain employees.
“If you have the authority to make decisions, even if it is only in your own little fiefdom, that helps to keep some of our employees,” said Howie. “In that sense, we are poised for the next tier. We’re not perfect, but we are starting to see more and more decision making by employees. It makes it more fun for the management team because we can go out and explore more opportunities and not worry about operations.”
“The hard thing is to stay out of the way as people develop,” said Doug, 56. “It is very, very difficult” to watch a worker who makes a wrong decision and not to intervene. “But if you jump in and stop them, they’ll get gun shy.”
“These guys have it together, so I’m no longer needed,”
Empowering employees to make decisions is a strategy that not only motivates them but also makes Palliser more valuable and succession-ready. “It is far more attractive to a banker or a buyer, to an employee group, if you have a wide management structure that has responsibility in different areas,” Howie explained.
Like other companies, Palliser never imagined how important the ongoing softwood lumber dispute between the
“It is a challenge every day to keep that particular opportunity free flowing,” Doug said of the company’s markets in the
Palliser absorbed much of the added costs of the
Under the previous quota system, a lot of lumber stayed in
“When these ‘mega’ mills that are kicking out 650 million feet start kicking out at that rate every year, what are they going to do with the wood when they get into a soft market?”
Quality and Training
Palliser puts a strong emphasis on training. For example, out of 200 employees, the mill has 70 certified lumber graders, which helps ensure consistent lumber quality. The company even has its own in-house grading training program, sanctioned by the Alberta Forest Products Association, with two certified trainers, including Bill McGregor, who oversees quality control with the help of two other employees. The trainers must be re-certified yearly.
The in-housing grading school has been operating four years, and the past three years Palliser employees have won the Alberta-wide high grade lumber grading competition. “It is all about management support,” Bill explained. “They allow us to do a lot of things that the management of other mills don’t. And that’s because their focus has always been on training.”
Bill was part of a team that developed a training manual that addresses health and safety issues as well as quality control. “Our focus was to make sure the employee is working safely, and that he’s doing it the same as the rest of the mill,” he said. “The whole idea behind the manual was to standardize our training and to make sure everyone had the same vision of the product.”
Palliser also pays close attention to quality control of incoming raw material. Bundles of lumber are inspected as they are broken down, and thorough quality checks are made when Palliser buys a new type of material. Quality control personnel examine a forklift load of lumber from each supplying mill monthly to ensure it is on grade and will make expected yield.
Communication with the production staff is an essential part of the quality control process. If a certain type of lumber does not meet projected recovery, for example, different stock may have to be used in order to meet production schedules.
At the end of the production line, strict quality control focuses on finished product. “We’ll do daily checks,” Bill said. “We want to make sure that when the customer buys a product that they are going to get the same grade every time.”
“Our focus on quality has not translated into us getting more money for our product than anyone else,” said Doug. “But in slow markets the chances are -- everything else being equal -- that people will choose Palliser because of our quality.”
“In spite of all the extra training, quality and extra value we think we leave in the wood, and the key word is ‘think,’ you don’t really get much extra or any extra dollars. But that’s the nature of the customers we’re selling to. They’re pretty tough buyers.”
Palliser has a good record on employee health and safety. Accidents and injuries are below industry averages, and Palliser regularly receives rebates on workmen’s compensation payments.
By caring for its employees, empowering them to make decisions, and providing some unique perks, Palliser has experienced good labor retention. It also has shaped a creative and productive workforce, ultimately improving its ability to succeed in a highly competitive and uncertain market place.