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Right Sizing the Business Has Been Key for the Longevity, Success at Alberta Pallet
Alberta Pallet: Mark Pagenkopf has right sized his business, and working with Viking has improved the production of his automated nailing lines.
By Chaille Brindley
Date Posted: 11/1/2014
Mark Pagenkopf has right sized his business, and working with Viking has improved the production of his automated nailing lines.
CALGARY, Canada – Some business just isn’t worth the hassle. That is true of almost any industry, and it can be particularly true in the pallet business. By going after the right type of accounts and modifying the company structure to meet current demands, Alberta Pallet has been able to weather a lot of different market changes in the Calgary area.
Mark Pagenkopf, president and owner of Alberta Pallet, commented, “At one point, the business was twice the size that it is today. We now focus on the right type of customer who wants good quality and is not seeking sub-standard quality pallets at the lowest price.”
Pagenkopf added, “During the economic crisis a few years ago, we changed our business approach. He explained, “We got rid of business that wasn’t paying for itself and cut back on staff.”
This approach has worked well given the difficult labor market in the Calgary area, which has a reputation for very low unemployment and difficulties obtaining enough labor to fill some jobs, especially in the pallet sector. Pagenkopf stated, “We used to operate a planer mill, but we shut it down because it was hard to find the labor to run the operation.”
Automation Assists in Handling Labor Woes
A key response to the labor shortage is the use of increased automation as well as efforts to obtain increased production from existing equipment. One of the largest pallet manufacturers in the vicinity, Alberta Pallet uses a mix of automated and hand production to service customers.
About seven years ago, the company added a Viking Turbo nailing line to replace its older Viking Champions. Workers produce orders that are 200 pallets or bigger on the Turbo.
Pagenkopf explained, “We bought the Viking Turbo because of the labor shortage in the Calgary area. We had two older Viking Champions, but they were too hard on the workers. We decided to upgrade to the Turbo and are very happy with it.”
Between the faster changeover times to the ease of operation, the Turbo has been a key solution for the area’s labor crunch. And another thing the company has done has been work with Viking to improve performance.
From time to time, operators in the past made changes in the parameters in the nailing machine instead of actually fixing the problems. This led to some machinery performance issues. The solution was simple. Seek assistance from Viking to identify the best way to do things. Pagenkopf said, “Viking service technicians helped us identify some key problems we were making when trying to adjust for different sizes. Having this assistance has helped us
It is natural for operators to try to solve problems themselves and they may not understand how best to make changes or fix issues that arise. That is why having Viking come in to do some training, machine recalibration or other services is a good idea. If you are not working closely with your machinery suppliers, especially major pieces of equipment, such as nailing machines, that is a mistake. But many pallet companies fall into this trap without even knowing it.
Pagenkopf added, “Our production has also gone up since the Viking service visit. If you don’t have regular communication with Viking or visits from its service team, you are missing out on opportunities to improve your efficiency and run a better operation.”
Today, Alberta Pallet routinely produces about 1,200-1,400 pallets per eight hour shift on its Viking line.
In addition to the Viking machine, Alberta Pallet uses two Holtec crosscut saws. The company had one of the first if not the first Holtec saw in Canada. Alberta Pallet bought a second machine to replace the first and ended up using it enough that the company opted to fix the older Holtec saw and keep using it too.
Pagenkopf explained, “Having a second Holtec package saw allows us to cut to length lumber and improve its versatility without relying on as much precut material. The saw has also opened up the opportunity to make lumber sales into the U.S. market.”
The company also uses a Cornell multi-trim resaw and a M2L stacker sold by Greg Wine of Pallet Machinery Group. cut to length wood and improve its versatility without relying on as much precut material. The company has one of the first M2L stackers every made and it has performed really well. Pagenkopf stated, “Greg Wine has made a number of improvements since first introducing the stacker years ago and we are looking to upgrade to a newer model to boost production.”
Alberta Pallet works to get the most out of its equipment. The company still uses an old Hazeldine notcher, and the company that manufactured it is long out of business. Pagenkopf said, “Even though it is a very old piece of equipment, it still runs well.”
A special service that Alberta Pallet offers is heat treating. Most companies in the area simply buy kiln dried lumber. This allows Alberta Pallet to offer heat treated new and recycled pallets built from both new and recycled lumber. It uses a kiln manufactured by American Wood Products. The lumber used for each pallet is tracked so that the source can be identified. This ensures compliance and provides a high degree of traceability if there is ever a question about the efficacy of the treatment on any pallet manufactured by the company. In this regard, Alberta Pallet goes over and above what the Canadian officials require and is beyond what other companies in the area do, according to Pagenkopf.
Reducing Heat Costs
Calgary is known for having some real rough winters. And keeping the facility warm is important to keep employees happy and productive. One thing Pagenkopf has done to lower costs is to use wood waste to heat the plant.
End trims and other wood waste are collected and stored all year to heat the facility. During the winter, this waste is fuel for a wood boiler used to heat the building. This Vyncke boiler has a gas backup system.
Pagenkopf said, “Using wood heat has helped us cut down a lot on our energy bills. When we use wood scrap, our energy costs run $1,000-2,000 per month. Other times it runs $8,000-10,000 per month.”
Working with the Right People
Alberta Pallet is a second generation family business. It all began in 1963 with a purchase of a forklift. Armin and Hans Pagenkopf decided to invest in a forklift for their potato and produce business. They looked around for suppliers to produce the wooden bases and pallets they needed. When they couldn’t find a steady supply, they began building their own at nights with hammers, nails and a saw. It was then that they identified a sideline business to produce pallets and began that enterprise in 1967 after selling the produce business to Associated Grocers Ltd.
The company has grown through the years to become one of the largest pallet companies in the region. It has 24 employees. Mark Pagenkopf took over control of the company from his father in 1994, and his two brothers are silent partners in the business.
Pagenkopf recounted, “When my dad sold the business to me and my brothers he held the note for 10 years. He didn’t make us go to the bank. My father wanted to see us succeed.”
When he took over the helm of the company, Mark’s father had his doubts about his son’s readiness. But the company grew under Mark’s leadership as he sought to better utilize production during the slow periods in the summer. Pagenkopf said, “All I did was find customers to be busy in the summer, and our revenue increased.”
One of the big drivers behind the success of Alberta Pallet is the people in the business. Pagenkopf said, “Without the strength of my employees and their advice through the years as well as insight from others in the industry, we wouldn’t have been as successful as we have been. I certainly couldn’t do this by myself, and we have been blessed with good staff to serve our customers.”
Alberta Pallet has focused on quality for years and has developed a reputation for producing quality pallets even though it probably won’t offer the rock-bottom lowest cost. Part of its service includes keeping inventory in stock for most major customers so that orders can be filled quickly.
Pagenkopf has found ways to work with others to produce win-win situations. For example, the used pallet department is run by a subscontractor. Alberta Pallet handles all of the sales and invoicing while supplying the equipment and support. The subcontractor does all the work because it is very labor intensive.
Pagenkopf commented, “I took my recycling partner under my wing and showed him the business and encouraged him to work with us instead of having to deal with yet another competitor in the market. This relationship has worked well because he can focus on repairs while we handle sales, billing and customer service.”
Also a former competitor is now the main sales person for the company.
Ben Malek, who now leads sales for Alberta Pallet, said, “Alberta Pallet has had nearly 50 years to develop their brand, and they have done a good job of creating a quality reputation in the market. Even when I worked as a competitor, I had respect for Alberta Pallet.”
In addition to the pallet business, Pagenkopf also runs a mini storage business that is located right next to the pallet factory as well as a trailer storage lot for pallet customers. The company’s manufacturing operation is housed in an old aircraft factory. Alberta Pallet moved into this facility in 1974. The offices are an old army barracks.
Besides working with the right people, Pagenkopf relies on good suppliers, such as Viking, Holtec and Greg Wine. And he has learned how to get the most out of his equipment. Even though the company is smaller than it was a number of years ago, Pagenkopf believes it is the right size because the business is more profitable and manageable. After all, unprofitable clients take time away from other customers that can help you achieve your business goals.