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Three Intangibles a Big Factor in Success of Clinch-Tite;
Penn. Pallet Maker Evolves into Full-Service Transport Packaging Supplier
By Steve Sorenson
Date Posted: 2/1/2002
SANDY LAKE, PA. – Intangibles often are the greatest assets to a business enterprise. Business manuals and management consultants preach that message, but few companies make it a reality.
Clinch-Tite Corporation is one that does. George Staples, owner and president of Clinch-Tite since 1974, emphasizes three intangible assets that have contributed to the company’s success: personal relationships, communication and ideas. Clinch-Tite is a manufacturer of wood pallets and containers and a supplier of a wide variety of transport packaging -- all very concrete products. But it is the three intangible aspects of the business that make the company competitive and add value to its products, according to George.
The casual observer might not expect to see a prosperous, forward-thinking business in what might seem like an isolated little community. Nor to discover such energy in what he might mistake as a sleepy small town. But this family-owned business brings vitality to this tranquil hamlet of 600 in the French Creek Valley of western Pennsylvania, and it contributes to the community’s spirit of optimism and pride.
Now occupying seven-plus acres near the center of town, Clinch-Tite was founded in 1955 as a pallet manufacturing company. Back then, the pallet business was simple and relatively uncompetitive compared to today’s challenging and fast-paced business environment. The Clinch-Tite pallet, durable and cost-effective, was well suited for shipping goods that required a high level of protection, and the flagship pallet made the company an industry leader in premium quality pallets.
The ‘Clinch-Tite’ name was derived from technology originally patented in Sweden and acquired by Clinch-Tite in 1955. Strategically-placed holes are drilled through stringers. Deck boards are fastened with high carbon screw nails that are countersunk, and steel rams clinch the nails in the holes. The method creates a mechanical bond with strong holding power that virtually eliminates nails from popping loose.
The Clinch-Tite design provides a number of benefits. It eliminates product damage caused by protruding nail heads and increases safety to personnel. The Clinch-Tite fastening method also results in a pallet that will last five to eight times longer than some ordinary pallets. The Clinch-Tite pallets have proven especially suitable in the chemical industry and other applications where safety in materials handling is a primary consideration.
The company initially subcontracted for pallet manufacturing but began its own operations in 1958. George, a young man disciplined by serving in the Army, joined the company as a salesman in 1960. He had a knack for relating to and dealing with people, and he intuitively knew that his success would depend on meeting customer needs more effectively than the competition. He was driven to achieve, and his success in sales contributed to the success of the company. By 1969 he was promoted to sales manager, and two years later he was made vice president. George purchased the company in 1974.
Wood pallets and containers were the sole products the company manufactured, and they still are today. As the wood pallet and container business became more and more competitive, however, George realized that he needed to expand the company’s product offerings in order to remain viable and prosper. As the Staples family began looking for ways to branch out in 1986, they struggled through some lean years. "We were looking for some ideas that would give us an edge over the competition," George recalled.
He found that edge. George learned that his pallet and container customers needed much more than just a shipping platform. He saw that by positioning Clinch-Tite to become a full-service transport packaging provider, the company could increase revenues by supplying a much broader range of products and services to customers.
The idea was the right one at the right time. When the national economy began to expand in the mid-1990s following the recession of a few years earlier, Clinch-Tite grew as it diversified into sales of other transport packaging products. Today, pallet and container manufacturing accounts for only 25-30% of the business.
Clinch-Tite now is a leading regional supplier of transport packaging products and is prepared to supply virtually anything a customer requires for transporting its goods. The company distributes many materials and equipment that are directly related to pallets and containers: corrugated containers, slip sheets, plastic zip lock bags, specialty gluing equipment and materials, stretch film, banding and heat sealing equipment, bubble wrap, foam sheeting, foam packaging peanuts, and even printed packaging. "Our secret really isn’t a secret," said George. "It’s fundamental to any business. We just make sure we do the best we can at communicating with the customer." That has been George’s strength since he first started in sales, and he has been savvy enough to know that changing customer requirements would necessitate changes for Clinch-Tite.
David Staples, George’s youngest son and company vice president, elaborated on what lengths the Clinch-Tite staff goes to in order to maintain close communication with customers. "We stay very close to our customers. As companies assign multiple jobs to individual employees, we keep in contact with the people in each company who actually use our products. We know what they need even before their purchasing officers do. And as companies reduce overhead, we’ve been able to warehouse our products for them, so they can depend on us to deliver the right product in the right quantity at the right time. That enhances our position as a full-service packaging supplier. The relationships we maintain are the key to our success."
Clinch-Tite also provides custom transport packaging design services. "We are very big in design," said David. The Clinch-Tite staff stays up-to-date on new developments and helps customers design transport packaging that best suits the requirements for shipping their products.
Other members of the Staples family are involved in the business. Besides David, the office is staffed by George’s other children. His oldest son, Victor, has followed in his father’s steps as sales manager. A daughter, Janet Hemminger, is office manager, and another daughter, Kim Andrews, oversees purchasing. Janet’s husband, Dan Hemminger, is maintenance supervisor, and David’s wife, Denise, does payroll and bookkeeping. Mary, George’s wife of almost 52 years, is the company secretary-treasurer.
The Staples family not only places importance on good relationships with customers but also with the company’s employees, which number about 30. A friendly spirit permeates the company, fostered by the honest management style of the Staples family and their genuine, open affection for employees. David is quick to credit various employees who have contributed to the company’s success by their cooperative, can-do spirit. "We have the best employees around," he said.
Of course, no business is built solely on intangibles. It has ‘bricks and mortar,’ too. In Clinch-Tite’s case, it stocks up to .5 million board feet of mixed hardwood cants at any one time, buying them primarily from Pennsylvania sawmills within 100 miles. The company saws about 18,000 board feet per day, nearly all of it done on a complete Pendu cut-up line that was installed in 1996. Cants are placed on a deck outside the plant that feeds them through a plastic weather curtain. An unscrambler singulates the cants and feeds them to a conveyor. The first stop in the line is the cut-up station, where the cants are cut to size. A single operator at a control console manages the flow of cants to the cut-up system; the controls allow him to rotate a cant, trim ends, and cut to size. The next stop is an in-line notcher for cutting notches into sized cant material that will be resawn into stringers. The in-line notching system eliminates the added steps and handling involved in feeding stringers to a notching machine. The Pendu in-line notcher has hydraulically adjustable cutter heads to enable quick changes in set-up. The end of the line is a Pendu 4300 gang saw that resaws the sized cant material into deck boards and stringers. The 4300's cantilevered arbor allows for quick change-overs. Finished boards and stringers feed directly to a Pendu automatic stacking system. Other equipment includes a Newman notcher and a Newman chamfer.
A worker is stationed at the stacker to carefully inspect the finished pallet components for quality. He is trained to examine parts for splits or other defects or irregularities. At the stacking station, Clinch-Tite added an emergency shut-off button. If anything goes wrong, the inspector can override the control console and shut down the cut-up line.
The Pendu cut-up line is safe and efficient. Manual material handling is kept to a minimum, reducing labor costs while increasing production and reducing the risk of injury.
For automated pallet assembly, Clinch-Tite is equipped with a Viking nailing machine. The company’s Viking may be one of the oldest systems of its type that has been in continuous use -- 20 years in operation. The machine was recently completely overhauled on-site by Viking technicians. It runs every day, assembling about 1,200 finished pallets. The Viking is operated by long-time employee Jim Thompson, who has the knowledge and experience to keep it running smoothly.
Clinch-Tite stocks an in-house inventory of as many as 40 different pallets. It also manufactures a significant volume of wood crates, boxes, and virtually any type of wood container. From expendable pallets and containers to more durable returnable pallets and specialty transport packaging, Clinch-Tite can design and manufacture wood transport packaging for any application.
Besides wood pallets, Clinch-Tite also supplies a line of steel guarded pallets; they are made of a welded steel frame with bolted hardwood deck boards to serve applications in heavy industry. The Clinch-Tite staff can produce small quantities of the welded frames in-house, but most orders are contracted out for greater efficiency.
Clinch-Tite also is strongly committed to recycling wood and other material. Waste wood is almost nonexistent. Trim ends are collected and sold for firewood, and sawdust is sold to farmers and others for animal bedding for livestock and horses. Other packaging material, such as corrugated, foam sheeting, bubble wrap, and shrink wrap, are collected, sorted and baled for shipment to recycling businesses. Customers sort as much as 90% of the material before returning it to Clinch-Tite, a cooperative effort that increases efficiency.
Like traditional pallet companies, trucking is an essential part of the business. A fleet of three tractors, 10 box trailers and a 24-foot truck keeps deliveries on schedule. With two full-time drivers and two back-up drivers, quick response keeps customers satisfied. Deliveries can be made in a few hours to customers within a 100-mile radius.
Clinch-Tite is nearing $10 million in annual sales through serving a variety of industrial accounts, but George is not ready to see the company’s growth level off. The door is wide open for continued expansion, he believes, since competitors have as yet not adopted his business model. Long-term, George plans to widen Clinch-Tite’s geographic service area to states well beyond Pennsylvania, perhaps first by establishing regional warehouses as a prelude to setting up offices in other locales. The immediate challenge in preparing for such expansion is to staff a sales force and train it in George’s principles -- the importance of relationships, communication and ideas -- and pursue new markets. These are the traits that distinguish Clinch-Tite, and make it unique in the pallet and packaging supplies industry. Short-term goals are to train the next generation of the Staples to carry on George’s successful approach.
With a diversified product line, efficient manufacturing processes, quality employees, a solid reliance on the important intangibles and a sound plan for growth, Clinch-Tite is uniquely positioned to weather business cycles and expand its horizons beyond Sandy Lake.