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Can Sorting Make Your Recycling Operation More Efficient?
To sort or not to sort - that is the question pallet recyclers ask themselves every day. Sorting can increase production and efficiency, but it also can be costly and a nightmare to supervise.
By Clarence Leising
Date Posted: 11/1/1998
To sort or not to sort that is the question pallet recyclers ask themselves every day. Sorting can increase your production and make your operation more efficient. In short, it can make you more money. But the reverse is also true. Sorting can become an expense, difficult to handle, and a nightmare to supervise. The answer to the sorting question is not simple. There are a lot of other questions that only you can answer.
Before getting into the benefits of sorting, there may be reasons why you do not want to sort. The first consideration should be your daily pallet volume. If you are doing less than 1,200 pallets per day, you should not consider sorting. The extra cost of sorting, whether done with or without equipment, is not justified. If you are doing a low volume, it makes more sense to deliver the pallets from the truck straight to your repair workers. Or you could send your builders to the dock to sort for a couple of hours, then bring the pallets into the shop for repairs.
Some large, successful pallet recyclers will not sort regardless of the method. These shops believe their people are the key: if the builders are trained well and doing their job properly, there should be no reason to sort pallets. For example, Al Keepman of The Pallet Company in Waukesha, Wis., once told me that he would never sort a pallet. He believes his people are trained well and managed well. His builders make As into As and Bs into Bs, and they take out the odd sizes for resale. Unfortunately, not all recyclers have the same luxury.
Don Matre of Pallet Services in Tonawanda, N.Y. had an idea that he thought would increase the number of As he got per truck load. Since an A pallet sells for $2.00 to $3.00 more than a B pallet, the more As you end up with, the better. He had workers sort out all the As and the builders made As from them; then they sorted the Bs and the builders made Bs from them. His idea worked. He saw a 10 percent increase in the number of As per truckload.
Since it is easier to turn a pallet into a B rather than an A, some builders consistently will produce more Bs. The boards do not have to be in as good a shape. If you leave this decision up to the builder, some will choose to make a B out of what could have been an A; with the price difference between As and Bs, you lose money whenever they make that choice. With a trailer load of 440 pallets, a 10 percent increase in the number of As per load means an additional $132 per day in revenues.
Training is what it is all about. Training has to be a never-ending process. If a builder can get away with something, they will, so your managers must have a presence in the shop. Your manager has to be out there where the action is. Remember, the better a builder is at building a pallet, the more ways he will know how to cheat. If your manager is not out there, some employees may cheat. If you are paying piece rate, the more pallets they get credit for, the more money they make, so they have an incentive to try to slip a few extra pallets by you. By paying an hourly wage, you remove this temptation. But if a builder gets paid the same whether they make 200 per day or 300 per day, why would he make the effort to build more than 200? So you need a management presence in the shop.
If you buy cores from freelancers, never sort these incoming pallets. Require the freelancers to sort them make it a condition of payment. Save them up in the yard until there are enough to keep your builders busy for a day. That will save you a days sorting costs and also will allow you to bring the stackers into the shop and let your builders use them for the day.
With large volume, sorting probably becomes necessary. But there still are a couple of questions to answer. Do you sort manually, or do you automate? Secondly, do you sort before the pallet gets to the builder, or after the builder is done? What about plating?
You can make rapid adjustments with your personnel to maximize flexibility. When sales slow down, for example, you can move to a four-day work week. You can cut back to 32 hours per week if necessary. You can also lay people off for a week or two from time to time. You have a lot of options.
Most people think that in order to have a large, successful shop you have to have a lot of equipment. Equipment can be very affective. Equipment can increase profits. Equipment can make you money. But equipment can also become a monster that has to be fed. When you buy equipment, you turn it on and you turn it off, but you have to pay for it seven days a week whether its running or not. When you pay a builder by piece rate, if he doesnt build any pallets, you dont pay him any money.
People in the pallet recycling business will tell you that you have to save labor, save labor, save labor. Many say this is what the machinery can do. But this is a labor intensive industry. It is hard, rough, brutal work, and you cannot escape the fact. At some point, somebody has to bend over and pick up that 70-pound pallet. Somebody will have to turn that pallet over, and somebody will have to make a decision about what to do with it. No amount of equipment will change this.
Another concern about automation is maintenance. You may have the volume to make automating worthwhile, but remember: if it is built by man, it will break. If you need a full-time maintenance man to keep your machines running, that is another cost. A conveyor system is not very complicated and can be easily maintained. Some stackers likewise are mechanically fairly simple but others are more complicated. Your machinery also should be water-proof; if it is not water-proof, I recommend you not buy it.
When pallets are unloaded off the truck, a decision has to be made about how to handle them. How many GMAs are there in the load? Are lead boards bad? Can a pallet be repaired? Should it be dismantled? Does it need plating?
I would rather have one person making the sorting decisions than 10 people making them. The more people you have making the decisions, the more opportunities you have for making mistakes. These mistakes will lead to your customers getting bad pallets back. If you do 1,200 pallets a day and only 10 percent are bad, that can add up to nearly 2,500 bad pallets per month. How long will your customers tolerate that?
The traditional method of sorting pallets has been to put a man out in the yard to sort and stack them by hand. One man should be able to sort between 1,000 and 1,200 pallets per day. It is a very physically demanding job, especially in hot weather.
Just by adding a couple of stackers and some rollers, sorting becomes much more efficient. With one man feeding the rollers and another man stacking, the pair probably could move up to 4,000 pallets daily, depending on your volume.
If you sort before pallets go to the builders, the decision-making process is greatly simplified. You just need to identify and train one or two of your people to become good sorters. You simplify the process when you limit decisions to one or two well-trained sorters.
Sorting first also will result in an abundance of odd sizes that are ready to go straight to your resale pile. I have found that in a truckload of pallets, 85 percent are GMAs and the other 15 percent are odd sizes. By sorting first, these odd-size pallets are immediately available for resale. A truckload of 440 pallets usually will contain between 60 and 70 odd-size pallets. If an odd-size pallet makes it to one of your builders, chances are it will be torn apart. This alone may justify the cost of a sorting system.
When should you invest in sorting equipment? The key is using multi-purpose equipment. Never buy equipment that cannot serve multiple uses. Dont buy equipment that can only be used on one size pallet. If it cannot handle 90 percent of the pallets you get, dont buy it.
For example, if you buy a portable stacker, you can use it for both sorting and building. Put it out on the dock or in the yard and use it to sort pallets when they come off the trucks. When the sorting is done, move the stacker inside and set it up for one of your builders to use. You cannot go wrong with portable stackers. Remember, once you buy the monster, you have to feed the monster.
I have found that sorting the pallets after the builder is done with them is even more effective. To sort this way you must have a properly designed system of conveyors that moves everything to a central location.
There are several advantages to this method. This is how it works. First, every pallet comes off the truck and goes straight to the builder. Your well-trained builder inspects the pallet and makes the necessary repairs. The pallet then goes down a conveyor to a central location. The pallet comes to another man who will do three things. He picks up each pallet, tips it up, and checks the stringers for cracks. Then he drops the pallet on waist-high dead rollers to be sure the boards are tight. Finally, he puts the pallet into the appropriate stacker or stacks it by hand. You hand-stack the pallet sizes of which you only get 15 to 20 per day, and they go straight into a stack.
This method gives you a quality check before the pallet goes to the customer. If the pallet needs plating, the builder turns it upside down. When the sorter sees the upside-down pallet, he pushes it to the plater. If the plater has time at that moment, he plates the pallet and then stacks it; otherwise, the plater stacks the pallet and plates it later.
Depending on your daily volume, you may be able to have one man both plate and sort. If you are doing less than 1,500 pallets daily, this probably will work. If your volume is higher, you probably will need one man to plate and one to sort. If one man does all the plating, he also has to be able to stack. During periods of high volume or when the sorter has to take a break, the plater must be able to take over and handle the sorting. This allows for interruptions, such as bathroom breaks and phone calls. There should always be somebody at the end to keep the line moving. You must have your plater down line from your sorter; if you plate before you sort and you get 10 to 12 pallets in a row that need plating, you will have a bottleneck in your system and production will slow down.
Another advantage of using a conveyor to move pallets to a central location is that you can also move your scrap wood to the central location. When it gets there, it will fall off onto another conveyor system to be disposed of by either grinding or dropping into a box. You get everything away from your builders by using a conveyor system. You also will be able to group builders in a row to watch them. This will save space and allow you to monitor their work easily.
Should you plate pallets? About 90 percent of shops plate pallets. The reason is simple. A plate costs about 10 cents. A pallet that is plated goes from being a B pallet to an A, and it will sell for about $2.00 more. Some of your customers will not accept plated pallets; by sorting after repairs, you can give them plate-free pallets. You have to know what your customers will and will not accept. A lot of pallet shops think they have to give every builder a plater, but this is not the case whether you sort before or after repairs.
If you plate before repairs are made, you take yet another decision away from the builders. A well trained sorter can spot pallets with bad runners and plate them on the dock. This will speed up your builders and allow them to produce more pallets. With a two-man sorting system, it is quite easy for one sorter to use a hand-held plating device.
By introducing a lead board remover into your sorting system, damaged lead boards can be removed before the pallet gets to the builder. Again, by removing this decision from the builder, he can produce more pallets.
By plating and removing damaged lead boards during the sorting process, you should be able to increase builders production by 25 percent or more.
Inventory control is essential to your bottom line. You absolutely have to know how many pallets a particular customer gave you and how many you have to return to them. You also have to know how many pallets every sorter sorted, every tow motor driver hauled, and every builder made. Without this information, things can and will get out of control. Luckily, there are some very easy methods to capture this information.
To count the number of pallets a particular customer gave you, assign a color to each company. Before the pallets go to the builder, simply spray a line of paint of the appropriate color on the entire stack of pallets. At the end of the line, the tow motor driver can look at the color of paint on each pallet, which will tell him the number of As and Bs and odd sizes each company is getting as a finished product. This way, when you pay each company for the pallets they gave you for repair, you will have an exact count. You get exactly what you have coming, and your customers get exactly what they have coming. They dont want to be over-charged, and you dont want to give away pallets. Your customers will appreciate this. You can bring them in and show them your system, and they will see that they get an exact count every time. If you dont sort and leave the counting up to your builders, things can and often do get out of hand.
To easily keep track of how many pallets a builder repairs, have the forklift driver count them when the pallets come off the truck. Write the number of pallets down on a piece of paper. When the pallets are delivered to the builder, have him count them and sign the paper, agreeing with the number delivered. Then have him initial each pallet with sidewalk chalk and process the stack.
Any pallets that cannot be repaired and have to be dismantled are sent down the line to be hand-stacked. When the forklift driver takes them to the dismantler, he looks at the initials on the pallets and records the number on the same paper used to document the number of pallets delivered to the builder. This way you only pay the builder for the pallets he made.
The final advantage of this method involves pallets that make it to the end that are not repaired properly. When this happens and no inventory control system is used, how do you know which builder performed the work? If their initials are on the pallet, you know exactly who made it and which builder to give it back to for reworking.
There are shops that never sort, and there are shops that always sort. There also probably are shops that sort which should not, and vice versa.
Sorting is an important decision, and you must not make it quickly. As I have shown above, there are a lot of factors that go into the decision. Every shop is different, and every situation is different.
(Editors Note: Clarence Leising worked in management positions for pallet recycling companies in the Northeast for 25 years and currently is a sales representative and recycling specialist for Bronco Pallet Systems Inc. He may be contacted by calling (800) 990-7872.)