While Nevada is known for its gambling and risk-taking, the Stephan brothers look for trustworthy partners when it comes to selecting the right automation for its facilities. The wise bet is that smart pallet companies will look to automation to counter labor challenges. What used to be a major hurdle for Pallet Broker LLC has become a strategic advantage thanks to equipment solutions from Automated Machine Systems (AMS) and other suppliers.
Over the past eight years, the company has invested in automation solutions to support the company’s rapid growth in its Las Vegas and Sparks, Nevada, facilities. From these multiple locations, the pallet manufacturer and recycler serve customers in Nevada, California, Oregon and Idaho. The company produces 75% recycled or combo pallets, with about a quarter of its production being new pallets manufactured on Viking Champions.
Pallet Broker started its automation journey in its Sparks location in 2017 with a used repair line. Pricing as well as compatibility with its PalMate software solution were major drivers. Matt Stephan, president and co-owner of Pallet Broker explained, “We had worked with Kris Chayer of AMS for a longtime, and we felt comfortable with their equipment and service. Knowing Kris made this an easy decision.”
Most recently, the company decided to install a new repair line from AMS in 2024 in its Las Vegas location. Matt Stephan noted, “We opted for a new line because it is more reliable and less likely to break down, regardless of the manufacturer. The new AMS line has enabled us to significantly boost production while making the jobs safer.”
Before the AMS line, the pallet handling and stacking at the Las Vegas repair facility was done by hand. Matt added, “We were able to reduce the square footage required by automation as well as the amount of forklift traffic.”
The new Las Vegas system starts with a destacker infeed that efficiently dispenses individual pallets into a manual inspection station complete with an operator workstation. The destacker operator can thoroughly inspect each pallet before directing them to a streamlined three-tier repair line. The bottom tier seamlessly feeds pallets directly to the stacking system, while the middle tier is dedicated to pallets requiring repairs. The top tier features a conveyor for waste materials. Throughout the process, six repair stations are strategically positioned to ensure optimal efficiency. Once inspected and sorted, barcoded pallets are conveyed to six high-speed stackers, each tailored for specific pallet grades, ensuring precise handling and organization per Pallet Broker’s specs.
The old system involved manual sorting and inspection by the pallet repair stations. This new approach allowed the company to move from 13 repair stations to nine and boost production because the repair operators are only focusing on repairing broken pallets. At the same time, automation is removing physical strain on the workers. Nate Stephan, vice president of operations and co-owner, noted, “We are able to hire from a much larger pool of workers now thanks to the automation. Automation has helped us diversify our hiring process and expand our labor force. Removing much of the strain of the jobs keeps workers fresh longer and reduces workplace injuries as well. We are a CHEP sort and storage facility. The AMS de-stacker has helped us process CHEP pallets while reducing the physical strain of handling the weight of those pallets.”
Why choose a destacker to start the process? Matt explained, “We chose a destacker because in Reno we utilize a tipper, which tends to run a bit slower. It tips pallet stacks that are 23 pallets high, and there’s times when the pallet falls off and breaks or causes hangups.”
Kris Chayer of AMS stated, “We have deployed destackers going all the way back to Jim Doyle and Indy Pallet in 1996. We have sold dozens and dozens of them throughout the years. Destackers work best for applications with a decent amount of ready-to-go pallets or minimally damaged pallets. These situations provide the best efficiency and cost savings, and they can be deployed in a wide variety of applications.”
AMS believes it has the best destacker on the market. Chayer explained, “The AMS destacker doesn’t have dogs, which means the condition of the pallet doesn’t really matter. The fork goes all the way into the pallet on both sides. So, you can have a pallet that is missing five deck boards, and our destacker can still handle it. If you can pick it up with a forklift, the AMS destacker can dispense it.”
AMS looks for the right situation to suggest destackers to provide the best return on investment (ROI). Chayer said, “If a recycler only has 10% ready-to-go pallets, we wouldn’t suggest a destacker or other presort approach. In those cases, it is best to send pallets to the repair station to handle the sort. But if a recycler has a lot higher percentage of pallets that don’t need repair, that’s when the investment on a pre-sort approach pays for itself very quickly.”
Another consideration is what companies do with non-GMAs, including odd-sized pallets as well as rental pallets. Pallet Broker functions as a depot for CHEP. In general, any repair system you develop should be designed to be as flexible as possible.
At the Sparks plant, Pallet Broker installed a Robotic Pallet Dismantler and Urban Sawmill line from Alliance Automation as the first step of its automation plan. The big driver behind this decision was the difficulty the company faced finding labor during the COVID pandemic. Matt recalled, “You couldn’t get labor, and you couldn’t get supplies, so the only way to reduce the cost was to produce combos. That has since become a big push for us. Compared to more manual operations, the robot and the Urban Saw line have eliminated worker injuries.”
One major benefit of the new automation is better data on teardown operations. Matt said, “Between the Alliance and AMS equipment in conjunction with our PalMate software, we can better know the real-world production numbers for our repair operations versus more manual repair flows.”
The Urban Sawmill also enhances yield for each board. Matt commented, “Now we’re recycling all of our 2x4s; before it was very hard for us to keep up. None of the saws could cut fast enough, and we weren’t getting the true cut value. But now, we are getting better yield and losing less usable lumber in our trim saw operations.”
The Vegas AMS repair line utilizes conveyors to eliminate a lot of forklift traffic. The top level of the conveyor system takes trash straight to a dumpster bin, which eliminates the need for a dumpster bin at every repair station. In the Sparks location, this material is ground up in a Rotochopper grinder and turned into mulch. The company produces 100 tons per week out of the Sparks facility.
Combo lumber is utilized in Viking Champions to produce combo pallets. Matt said, “We like the Viking Champions because they can nail both new and used lumber. They work well when it comes to producing combos with new stringers and recycled deck boards.”
Why Automation Now?
The major drivers for automation have not changed. People are expensive, and they are not getting any cheaper. Actually, the availability of immigrant labor is likely to get much worse. This may be a major reason to consider automation, as competition for available immigrant labor likely increases in the coming years.
Chayer suggested, “Automation removes a lot of manual labor from the recycling process. It can help streamline the process and even make jobs easier, which does increase the available labor pool for functions that are still required.”
Pallet Broker has undergone significant staff transition since starting its most recent automation journey. Sure, there was a learning curve for some of the technology, especially the Robotic Dismantler and Urban Sawmill. Nate admitted, “Going from bandsaw dismantlers to a robot was a major transition. It is extremely different technology from what we have done for years. It required a lot of training, especially for our maintenance staff. We also had some staff transition and brought in people who could make the technology work.”
Has the journey been worth the cost and the effort? Matt declared, “Our new automation significantly reduces the strain on our labor. This means that people don’t mind coming into work. We are seeing more applicants every day. Automation makes the jobs easier for more people to do, which increases our labor pool. Due to automation, labor has gone from a huge problem to a strategic advantage for us.”
Matt added, “Automation is key to making our Las Vegas location work well. We have been able to cut the number of employees from 24 to 18.” Also, creating a good working environment has enabled the company to build a good recruitment pipeline through referrals. Matt explained, “We have employees who are bringing their kids and family members down here to work with us. We’re seeing a ton of applications now.”
Automation allows for greater productivity while cutting hours and overtime. Chayer of AMS pointed out, “They were working six days a week, 10 hours a day. Now they’re working standard hours with no overtime.”
Better Data Leads to Better Decisions
The new repair line from AMS allows the Las Vegas facility to track the entire process on a per-pallet basis from start to finish. The forklift driver places a tag on each pallet before stacks are delivered to the destacker station. Pallets are then tracked from sorting to repair and eventually stacking. The bar code’s data is fed into the PalMate enterprise resource planning (ERP) software, allowing management access to data that used to be hand counted and was never anywhere as accurate as the automated process.
Nate explained, “As a pallet goes down the line, we know the core supplier, who repaired it, and what grade it is. This allows us to know the true grading from each supplier. So, we know who is giving us more pallets that are ready to go versus B’s that need to be repaired. The PalMate ERP tracks the inventory as well, so we can login and see the numbers even if we are at the other location.”
This improved data collection has helped Pallet Broker to truly understand the value of each load and supplier. Nate admitted, “It’s really focused our operations on what we want to bring in and what we don’t want to bring in.”
Transition Challenges and Partnership Matters
Not everything with these new installations went as planned. Challenges in the ramp-up phase can be just part of the process when you radically change the flow inside a pallet plant.
Initially, the scanner before the AMS destacker wasn’t working correctly. While they initially troubleshot the situation, production plummeted, and they had to inspect pallets before the destacker to identify the core source and condition. But a new scanner was ordered, and AMS quickly got the entire system running as it should. There was also a learning curve with the new line, especially the destacker. AMS trained Pallet Broker on how best to prep loads going into the destacker as well as how to use it. Stacks of pallets anywhere from 16 to 20 high are sent through the destacker and pulls out plastic pallets or severely damaged wood pallets that would hang up in the system.
When the process was being done by hand, it resulted in more labor, more forklift traffic and only 3,500 pallets processed per day. Now a typical day is 4,300-4,400 pallets per shift with less strain on the workers and better data to manage the inventory and process. While the process took a few weeks to get fully up to speed, what Pallet Broker liked was the way that AMS treated them as a partner and worked to make sure everything was right. Matt recalled, “From training to getting replacement parts to helping us troubleshoot install issues, AMS really supported the entire process from start to finish and treated us like a true business partner.”
Brian Glass, vice president of operations at AMS, said, “Several members of our team returned to the Pallet Broker site, offering additional hands-on training and fostering a closer partnership to get their operations on track.”
“Our team worked to ensure they were hitting their numbers. We don’t just sell equipment and leave customers to figure it out. We are a true partner who is there to come alongside our customers. From install to troubleshooting to training, we work with customers to make sure that the ramp up-period is a success.”
Twin Brothers in Business
Mark Stephan, Matt and Nate’s father, started the company in 2002 in Reno, NV. Matt entered into the business with his father after college. Nate went into the military and then came to the business. After 30 years in the pallet business their dad Mark retired, and the twins bought him out to take full ownership of the company. While the company initially focused on recycled pallets, it has added new pallet production, especially combos.
Working with his twin brother is a huge bonus for Matt. He said, “We talked about this when we were kids that we were going to live by each other and work with each other. Now, we’re grown adults, and that’s what we do.”
Nate agreed, “Working with Matt has been fun. It is rewarding to grow the business together.”
Pallet Broker works hard to ensure speedy answers to customer requests or concerns. All customer service calls go directly to Nate or Matt, not an answering service or mid-level employee. Matt stated, “I think our approach goes a long way to providing top-shelf customer service because we can fix any problem or make a decision right there in the moment without having to go seek approval from a manager or third party.”
A big part of the company’s success has been its commitment to quality. Pallet Broker still has a quality control person at the end of the line even though the AMS system is designed without needing one. Matt said, “We like having a person at the end of the line inspecting pallets to ensure quality consistency. If pallets are not fixed to our standards, they are pulled off for more repairs. We always strive to offer consistent quality, which is one reason that we keep so many of our customers.”
