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Challenger Targets Niche in Mid-Volume Orders with Quick Turnaround, Service: Canadian Pallet Supplier Benefits from ‘Lean Manufacturing’ Principles
Challenger Pallet: Canadian pallet manufacturer targets a niche in mid-volume orders with quick turnaround and strong service; Challenger Pallet benefits from ‘lean manufacturing’ principles.
By April Terreri
Date Posted: 5/1/2007
RIDGETOWN, Ontario — Wayne Reinhart prepared himself for a career in chemistry when opportunity knocked at another door.
Fresh with a bachelor’s degree in chemistry from the University of Western Ontario in London, Ontario, Wayne and his wife, Christina (who also earned a degree in chemistry), had an opportunity to purchase Challenger Pallet Ltd. They decided to embark on a new journey and purchase the business.
Wayne comes from a family of woodworkers and has been around the wood industry most of his life, but he decided to major in chemistry in college. Once he graduated, however, he chose a career path where he was familiar.
“The pallet industry was something I felt comfortable with, having been in the business in the past even though I was indirectly involved in the management part of it,” he recalled.
As president of Challenger Pallet, Wayne runs the company with Christina in a 15,000 square-foot building on 10 acres of land.
Wayne admitted the company’s potential for future growth depends to a large extent on the economy and the value of the Canadian dollar at any given time.
“The automotive sector in both the U.S. and Canada also affects our potential growth,” he said. “The decline of the auto sector has limited our growth and has caused some ups and downs in our staffing levels.”
The fluctuating value of the Canadian dollar, in conjunction with rising lumber prices, has also contributed to the up-and-down growth of the company.
Challenger has managed the slow-down in the economy through layoffs, reducing inventories, doing more in-house maintenance and scheduling routine clean-ups.
“We encourage management and staff to work together to implement new ideas,” said Wayne. “Challenger realizes that happy employees are more productive employees, and we all work together to discover solutions to any problems that arise.” The company surveys employees about job satisfaction regularly in order to monitor morale.
When times get tough, Wayne remains optimistic. “The benefit we see in some of these setbacks is that they force us to look internally to understand more intimately everything that is happening within our four walls,” he said.
For instance, a SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis was done recently so that Challenger could make intelligent, informed decisions in pursuit of its objectives.
Challenger monitors market conditions so it can be prepared to respond to changes and opportunities. “One of our long-term objectives is to expand into new markets and opportunities, and another is to maintain high safety levels,” explained Wayne. The company is considering an expansion in the near future involving warehousing or pallet recycling operations.
When the going gets tough, the tough get going. That’s what Challenger
“We began our lean program about three years ago,” Wayne recalled. “It involves our overall approach in the method we use to take on new work and in how we handle existing work, so that means we are now stockpiling items. Lean also extends into the way we process orders; now we try to get commitments for over-expanded lots so we can manufacture a larger volume of pallets at one time.”
Wayne learned that another benefit of lean methodologies involves troubleshooting problems through the use of group meetings; these sessions uncover root problems.
“When we have these meetings, we brainstorm with the understanding that everyone’s idea is a good one and that no idea is unworthy,” he said. “So in lean manufacturing, we have learned to have even more productive meetings that are constructive. We are not critical of any ideas presented by anyone.” When the meetings conclude, each employee returns to his job with a clearer understanding of his personal goal.
Business Development Corporation Bank in Canada helped fund some of the company’s initiatives. “They even helped land us some work through networking,” said Wayne. “But the biggest benefit was the degree to which BDC was instrumental in our decision to implement lean. We realized that to compete in this industry, you have to be lean and mean.”
If there is one element that defines the recent successes of Challenger Pallet, Wayne would tell you that it is focusing on outstanding customer service and products at a fair price.
“Our customers benefit from our guarantee that if they call today, they will receive their order tomorrow,” he said. “Although large, custom orders for newer customers may take a couple of days longer, we are very proud of our production and delivery capabilities.”
Wayne emphasized Challenger’s commitment to responding quickly in the just-in-time business environment.
“We continue to react to meet our customers’ needs,” he noted. “For example, a customer called me today and told me he was in a bind and needed pallets by the following day. We helped them out. I want to be the company that people can count on and come through for our customers to get the job done they require. We want all of our customers to have a positive experience when dealing with Challenger.”
The company’s core business is manufacturing new pallets in hundreds of sizes and configurations. It also manufactures specialty products, such as crates, corner posts and shipping platforms. Challenger’s customer base extends through southern Ontario into Michigan, Indiana, and Ohio.
“We maintain high inventory levels of pallet sizes to ensure quick delivery,” said Wayne. Standard pallet sizes include 48x40, 48x44, 32x30 and 42x42.
Challenger Pallet has a license to use the Pallet Design System computer software to design specialty and custom pallets, including expendable (one-way pallets), pallets with oversized stringers, blocks pallets and panel deck pallets.
Custom and specialty products include crates, containers and corner posts.
Challenger purchases dimension softwood lumber from wholesalers, mostly spruce, pine, or fir, in varying lengths, and the lumber is cut to the required lengths. Stringers typically are made from 2x4 lumber, and deck boards are 1x4 or 1x6, ½-inch to ¾-inch thick.
“Our high-end resaw line is the key to our ability to provide fast and reliable production for our regular customers,” said Wayne. “Also notable is Challenger’s ability to handle extra-long lengths of lumber, which allows us to supply customers requiring large, oversize shipping platforms.”
“We bring the wood in through a conveyor system, and we cut it to length with a Nelson & Atkinson five-head multi-trim saw,” Wayne explained. Stringers are notched either on a Baker Products double-head notcher, with large sizes done on a Baker single-head notcher. The company also is equipped with a Baker resaw line for remanufacturing rough lumber into pallet parts and other components.
Challenger offers other cutting and shaping services with routers and other tools for specialty items. “We are not only making pallets but also specialty wood products for other industries,” said Wayne.
Challenger assembles pallets and crates by hand with ShurFast and Stanley-Bostitch pneumatic nailing tools and ShurFast collated fasteners.
In its cut-up operations, the company uses Lennox bandsaw blades.
About 100% of the business is focused on new pallet production and other new products.
Challenger collects surplus used pallets from customers as a service. “We provide a service to our customers in that they can send their scrap pallets to us if they want to get rid of them,” Wayne said. If the pallets are useable, they are recycled.
Scrap wood material is supplied to another business that grinds the material, and the wood fiber is used in the manufacture of artificial fireplace logs. Challenger sells sawdust to farmers for animal bedding.
“Although we produce pallets in a variety of sizes, our niche in the marketplace is not high volume,” said Wayne. “It’s more mid-volume with strength in offering quick turnarounds on smaller, medium-sized runs.”
Challenger offers other services, such as just-in-time delivery, partial truck-load deliveries, mixed truck-load deliveries and specialty cutting. Challenger offers inventory service, keeping pallets in stock for customers so they are available for immediate shipment. Customers are invoiced only for pallets they have received, not pallets in Challenger’s inventory.
Challenger is committed not only to its employees and customers, but to the community in which it operates. The company supports the local Kiwanis Club, food bank and the Salvation Army. It also supports local sports teams and the local daycare. It recently donated $10,000 to the Chatham Kent Health Alliance. “We encourage our employees to help in organizing fund-raising events for worthy causes,” said Wayne.
Challenger, which has been recognized as an Industry of the Month by the local Chamber of Commerce, provides safety and first aid training for employees. The company also offers a pension plan for workers. Employees are paid an hourly or piece rate wage, depending on their job; workers building pallets are paid per pallet while cut-up workers are paid an hourly rate. “We acknowledge jobs done well by giving gift certificates to local restaurants,” said Wayne.
Employee welfare is a top priority at Challenger. “We want to make sure they are financially rewarded enough to live well,” Wayne said. “We also work to ensure their safety in their work environment so we can create and keep happy employees. If there are ever issues, we like to deal with them immediately in order to resolve them so everyone continues to be satisfied.”