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Automation and E-Commerce Fuels Growth for Pallet Express
New Economy Success: Pallet Express has turned a massive e-commerce customer with 24/7 service requirements into a catalyst for business improvement and success. Equipped with new dismantling, sortation and repair equipment from Industrial Resources, the company has grown significantly and found a way to secure cores in a tough market.
By Chaille Brindley
Date Posted: 12/1/2015
New Economy Success
Pallet Express has turned a massive e-commerce customer with 24/7 service requirements into a catalyst for business improvement and success.
EASTON, Pennsylvania – Some customers are demanding, but you can’t grow your business without them, and they make your operation better. Pallet Express Inc. has doubled its sales since 2007 after landing a major e-commerce company as a client and working with Industrial Resources to automate its facilities.
Bill Hildenbrand, the owner of Pallet Express, explained, “A big reason for our growth is that gradually we have been getting a larger core supply over the last five years, but two years ago we landed a major online retailer in a nearby city, which boosted our business. We started managing multiple DCs for this company, and the mothership location uses a lot of Bs. Nobody else in our region could handle it. We took this customer on, which supplies a lot of pallets and needs a lot of Bs at this one primary location.”
But the existing facility located in Easton was not setup to accommodate such high volume business. Bill stated, “This massive influx of pallets meant we had to do something to process and store pallets faster. If we had not upgraded the facility, we wouldn’t have been able to handle this growth.”
Bill bought a 12,000 sq. foot building on an eleven acre parcel of land in Nazareth, Pennsylvania. He upgraded the facility and paved much of the property to facilitate fast core processing. The new facility is equipped with an Industrial Resources automated pallet repair line and is designed to efficiently process used 48x40 GMA cores. Bill commented, “We upgraded everything in our new Nazareth facility. It is about as state-of-the-art as you are going to get for a pallet business.”
Instead of pallets piling up, cluttering the yard and not being able to supply customers, the new facility and improvements to the existing plant has made all the difference. Bob Hildenbrand, Bill’s son and operation manager of the Easton facility, spoke on how the new Industrial Resources automation have made a big difference at both locations. He said, “We were sitting on about 50,000 cores broken, and within a month, we were caught up and now every pallet that comes in gets repaired. We are sitting on about 30,000 repaired pallets going into our busy season.”
Production has significantly increased because workers can focus on what they do well. The Easton facility processes odd-sized pallets and breaks down pallets to produce lumber. And the Nazareth plant repairs only 48x40 GMA pallets. Automation has improved production so workers who used to repair about 20 stacks per day can now process close to 30 stacks per day.
Bob added, “The automation has reduced injuries and improved employee morale. Guys are making more money and they like the job a lot more thanks to the automation. They know the system is accurate and will keep good counts.”
Nazareth Process Flow
The Nazareth plant from the ground up was designed to efficiently process 48x40 GMA cores. Incoming pallets are sorted as they are moved off trailers and odd-sizes or scrap pallets are sent to the Easton facility.
Usable GMA cores are moved via forklift from the West side of the plant to eight repair tables. Workers inspect each pallet and repair by hand whatever needs to be done using hand tools. Finished pallets are put on an Industrial Resources conveyor line and sent down to one of four Infinity pallet stackers. One stacker is for premium grade pallets. Another is for As. And there are two stackers designated for Bs. Finished pallets are usually moved directly into trailers for shipment. Some are stored outside or inside depending on current customer demands.
Production is tracked via bar codes. Each repaired pallet is labeled and a scanner makes sure the pallet is automatically loaded into the right stacker. The bar codes are used to track production for each pallet type and worker. The Nazareth facility runs software offered by Industrial Resources.
Scrap lumber is collected and sent to the Easton plant for processing.
Bill boasted, “The automation makes the entire process better for our workers. They can produce more with less impact on their backs and bodies. Also, we need fewer forklifts than in the past without the line. Everything is more efficient with the automated line from Industrial Resources.”
Pallet Express has made processing incoming cores a high priority. Instead of allowing pallets to collect and clutter, the company works to deal with everything as quickly as possible as it comes in the yard. Bill explained, “We don’t let pallets pile up. We keep on top of it.”
This is an important distinction for Pallet Express because many companies simply set pallets aside and plan to get to them later. But Pallet Express knows that every day a pallet sits idle in the yard is a lost opportunity. Pallets lose value over time and take up valuable space. But you have to be committed to not let things accumulate over time. You have to make same day processing a priority.
The Nazareth facility has been so successful, that Pallet Express now runs two shifts to keep up with the demand.
“The Industrial Resources equipment has helped fuel our growth. We have almost no used pallet inventory cluttering up our yard any more. Almost as fast as cores come in they are processed and prepared for reissue, repaired or dismantled,” stated, Don Van Billiard – plant manager at new plant in Nazareth, Pennsylvania.
Pallet Express repairs over 30,000-40,000 pallets per week on its Nazareth line with two shifts.
Easton Process Flow
The Easton facility primarily processes mixed scrap loads and a high percentage of odd-size loads. Pallet Express installed an Industrial Resources tear-down line in the Easton plant last year. This line allows the company to turn what used to be waste wood into usable lumber.
Bill commented, “The new tear-down line has almost tripled the amount of lumber that we put out. We are able to cut a lot more stuff that we used to just grind up. We can now make more custom sizes because of it.”
Pallet Express has started producing a lot more remanufactured pallets that use new end boards and everything else is recycled lumber. Sometimes, the company produces combo pallets with new stringers and recycled lumber. Bob suggested, “People love remanufactured pallets because it is like a brand new pallet at a reduced cost.”
The Industrial Resources tear-down line has two identical systems, and employees work as teams. There are six workers per team and two teams in the tear-down department. Four Industrial Resources bandsaw dismantlers are used to take apart used pallets. Boards drop down onto a conveyor and then move to a sorting station. Two line workers sort out boards pulling the runners and stacking them. They throw the junk boards on the scrap conveyor. Good boards go right into an Industrial Resources trim saw and are cut to size. This saw system can be changed to cut different dimension lumber, such as 40 and 42 inch lumber. Older saws are used to cut smaller sizes.
The two tear-down lines can dismantle about 1,500 palelts per day, and they can produce even more on a really good day. Bill said, “We used to do four loads per day of grinding now down to about 2-3. That cut lumber is worth a lot more to us than the mulch.”
Pallet Express uses a MC266 Rotochopper at the Easton plant to grind up wood waste into mulch. The company use to regrind and colorize material. But that took up too much space and was not a core focus for the company. Today, it works with a mulch company by providing material. The tear-down line helps Pallet Express become greener because lumber is used for a higher value product, such as finished pallets.
One of the things that has allowed Easton to react to changes in the business is the ability to alter the facility flow using portable docks. Called Dura Ramps (www.duraramp.com), these portable docks and forklift ramps allow a pallet company to maximize process flow without expensive changes to existing buildings.
Bill explained, “So many pallet companies have buildings were docks aren’t in the proper spot. And when you are starting off in this industry, you have to deal with what you have and can’t afford major changes to buildings. As a result, way too many companies in this industry are inefficient. They do everything two and three times. And are driving too far with stuff. Excess handling impacts productivity.”
Dura Ramps can be moved where you need them and eliminate unnecessary forklift activity.
24/7 JIT Service
Top quality service has led to impressive growth over the last several years. Five years ago the company had 60 employees. Today, it has 110 employees in two separate facilities.
None of this growth would have been possible if Pallet Express has not committed to offer just-in-time (JIT) service to a leading online retailer. This client is used to shipping out products 24/7 and never sleeps. And the pallet company that services this e-commerce giant must have the same commitment to efficiency and JIT delivery.
Pallet Express services the main hub in a nearby town as well as twelve other smaller DCs in the region. Downstream facilities produce pallets but the main hub sucks in pallets about 40 trailer loads per week.
The reason this all works is that the e-commerce company is a plus core supply customer providing a lot more pallets than it absorbs. This customer wants lots of Bs and JIT service, and the extra cores it supplies has helped Bill grow his other accounts. This online retailer is less than 30% of his total business although it has helped drive growth through providing more cores.
Bill said, “You have to have an enormous operation to handle service around the clock. I was able to raise wages and pay everybody well. I have good new equipment… You have to be on point – you have to care. You have to be all in or you are out to service a client like this.”
Instead of fighting over the lowest price, Pallet Express tries to offer top notch service to accounts that are good partners. Bill explained his philosophy, “Landing quality accounts is the way to grow your business. Money doesn’t come for people looking for the cheapest price on low quality. Good revenue comes from accounts that want quality and reliable service and are willing to pay more to get it.”
Talking about tough accounts, Bill commented, “This e-commerce client is the most demanding account by far we have ever had. They are not unreasonable. They just need you to do the job and be on call 24/7.”
Vigilance and constant monitoring of inventory is the key. Bill stated, “You have to monitor everything and track reports every hour. There is so much activity, and you need to keep planning ahead. Nobody is this large around here. And nobody requires this level of service.”
Strong Family, Team Chemistry
Pallet Express started in 1985 with Bill and his old Chevy pickup truck, and has become a thriving success story today. It is the kind of story you hear in this industry when determination and hard work combine to forge a successful business.
Bob has been involved in the company full-time since he was eighteen, and he is about to turn 30 years old. He recalled the best thing he ever did in this regard was to go work for a couple of years for a paper mill. This experience outside of the family business was invaluable for his education and development. Bob said that he brought back a lot of lessons from this big company covering everything from process improvements to safety to building a strong culture.
Bob currently manages the Easton plant, and he laughed, “We don’t always see eye to eye, a typical father and son relationship. But we find a way to always make it work. Sometimes he has better ideas. Sometimes I do. This is my future.”
Bill credits his wife, Karen Frack Hildenbrand, for getting him into the pallet business because her father owned a nearby pallet operation. She has been Bill’s constant support and selfless utility player who did whatever was needed, according to Bill.
By the fall of 1989, the company had 15 employees and reached close to $1 million in sales. Then Bill hired his father, Blaine Hildenbrand, who left a career as a chemical engineer to support his son and both fulfill their dreams of working together in a family business. Bill recalled, “My father with his extensive background in business and accounting became that person that every successful entrepreneur needs. That guy in the back ground who knows how to do everything and takes credit for nothing. I was the founder, sales person, operations manager etc. But I needed my dad because I knew nothing about getting tax licenses, preparing for audits and payroll. All that nuisance stuff but is so important and he did it perfectly so I could do what I’m good at which was build the company.”
Strong employees has been the bedrock of Pallet Express. Bill said, “I’ve had thousands of people come and go over the years. Too many to count and remember. A few great ones stick out. My sister-in-law Lori Knoble, her brother Buddy Frack, Kevin Huff, Donald Staats, Ted Poff, Don Van Billiard, Ami Judd, Shelby Quevedo (human relations manager), my three sons Bob, Brad and Gary.”
Constant focus on the customer helps Pallet Express keeps customers happy. Bill boasted, “We lose very few accounts to competitors any more. Customers don’t want to leave us because of our strong service and core supply.”
The company now has two plants with 100,000 sq. ft. of building area and 23 acres of outdoor area. It runs 340 trailers and 16 tractors and has done over $13 million in sales this year. Bill laughed, “That’s not bad considering I earned $13.50 my first day working in the industry over 30 years ago.”