Automation Positions Pennsylvania Pallet Recycler to Grow Business

However, Allentown, Bethlehem, and the Lehigh Valley, which is the home base for Nazareth Pallet Company, have been experiencing a business boom for years. In fact, things are so good that local newspapers are full of classified ads for jobs — all paying above minimum wage — in a broad range of businesses and careers.

Nazareth Pallet was started in 1984 as a three-way partnership that included the Frack family. One partner sold his interest the following year. The company moved into a new facility in 1990, and the Frack family also bought out the remaining partner. Nazareth Pallet Company now employs 35-40 workers. The company’s facilities are comprised of two buildings: the 25,000-square-foot main plant and a 12,500-square-foot building for storage.

In 2000 the business had sales of just over $3 million. About 90% of its business is recycled pallets — the large bulk of the company’s work is 48×40 pallet repair — and 10% is sales of colored mulch. Average weekly output is 20,000 pallets and 800 cubic yards of mulch.

With Interstate 78 running east and west through the center of the valley and all the way into the New York/New Jersey metropolitan area, there has been a tremendous influx of new residents and corporations relocating to this picturesque area of eastern Pennsylvania. The local economy and its businesses have grown, and the demand for employees is so high that it has made life difficult for employers like Nazareth Pallet.

Finding new employees wasn’t the only problem either. Since Nazareth’s primary business is pallet reclamation and refurbishing, the traditional back-breaking way of doing the work made it hard to keep good employees healthy, happy, or keep them from leaving for other, less arduous job opportunities in the area. The ability to find and retain good workers also was keeping Nazareth Pallet from growing and expanding the way the Frack family envisioned. While business had been good and the company grew each year, the Fracks believed the company was capable of growing considerably more and generating significantly more revenue and profits.

Even with the successful addition of a colored mulching operation in 1996, the company was plainly being held back from its potential. Orders for used pallets were filled by pallets reclaimed the same day with little or no inventory from which to pull. Sales manager Don Shellhammer had to carefully pick and choose clients and potential customers, being careful not to get too much business at any one time. Instead of promoting their business to spur more growth, the Frack family had to find ways to reign in the company’s growth. All indicators pointed to the booming economy and lack of sufficient labor as the main culprits.

There had to be a way to free the company to pursue more growth. George Frack Jr., general manager of Nazareth Pallet, worked closely with his brothers, Jason and Brian, to find some new and creative ways to solve this chain of problems.

The first step was to examine their entire operations and each step in the process of reclaiming and refurbishing pallets. They had already done everything possible to help keep their workforce moving forward with pay incentives and bonuses. In many instances it appeared that employees were working too hard to get the job done or simply getting in one another’s way. This was painfully apparent when it came to sorting incoming pallets. Pallets were stacked on a conveyor five high with a forklift, measured, marked, and then sorted by hand into more piles. With men on both sides of the rollers and the forklift constantly moving in and out, it was dangerous and very physical work.

Then George hit on an idea to automate the process. After seeing a tipper in action at a pallet manufacturing company, he decided to see if it could be incorporated into a different set-up that he had in mind. Together with his brothers and Kris Chayer of Automated Machine Systems (AMS), a supplier of pallet recycling and handling equipment, they devised a conveyor system that starts with a set of roller conveyors where the forklift operator can deposit stacks of unsorted incoming pallets as they come off the trucks. Electric eyes keep the stacks feeding toward a tipper that tilts them down and lifts the pallets up to a sorting conveyor. The operator of the tipper acts as the sorting manager, breaking the stacks down into single pallets, measuring and marking them for two stackers.

Nazareth Pallet recovers used pallets from customer locations and other pick-up points with its fleet of over 100 trailer vans. Like other pallet recyclers, they leave trailers on-site, returning later to pull filled vans back to the Nazareth shop and leave another empty van in its place.

Incoming pallets are basically sorted into two types, those that can be used again immediately and pallets that need repairs. One side of the line is used for undamaged pallets that can go right into inventory while the other side stacks pallets that require repairs.

Nazareth Pallet relies entirely on recycled lumber for replacement parts; it also uses recycled lumber for building remanufactured pallets. A crew of three or four workers dismantles pallets for usable lumber. The company’s tear-down operations are equipped with a Smart Products bandsaw dismantler and also an MSI three-head disc machine. Recycled material is cut to size on a Pallet Repair Systems TrimTrac saw; an AMS chop saw also is used for cutting used lumber to size. The recycled components are sorted and stored in rolling carts and moved to the repair line as needed.

Although the sorting operation is simple it accomplishes a lot and is a big improvement over previous conditions. Workers no longer have to contend with a forklift moving in and out of their area, and the forklift can move more freely to feed unsorted pallets to the line and retrieve sorted pallets. The height of the sorting conveyor makes the physical work of stacking sorted pallets a little easier while utilizing both sides of the line keeps the area neater and more organized.

This less-stressful environment has made a difficult task far easier, safer and more organized and efficient. With the addition of the tipper sorting system, the same number of workers now can sort nearly twice as many pallets as they did under the old arrangement.

“It has worked even better than we thought it would and truly was an investment that has paid us huge benefits,” said George. “It not only paid for itself in six months, but it opened our eyes right away to the potential of automating other areas of our operation.”

With the sorting operation humming along, plans were quickly but carefully made to explore ways to automate the repair side of the pallet recycling operation. About 80% of the company’s business is focused on repair of 48×40 pallets. Nazareth turned again to AMS, which helped them to design a system that has greatly improved the flow of the entire repair process.

A forklift moves stacks of pallets to a conveyor outside the building where pallets are repaired. The conveyor moves these stacks of sorted, damaged pallets into the building and to a pallet destacker. An operator at this station controls the flow of pallets. He pulls any pallets that need little or no repair that may have crept into the system and sends damaged pallets to the next work station.

Two AMS Deck Masters on either side of the line allow two workers to quickly strip off broken deck boards and compress nails into the stringers. With damaged boards removed, pallets are placed onto the central conveyor with the bottom deck facing up. Workers on either side of the line replace boards or nail any loose boards back in place. This all takes place “on the fly:” the pallets move past the workers as repairs are quickly made. Conveyor speeds are adjusted, based on the number of workers on the line or the extent of repairs. Fewer workers or extensive repairs, for example, would dictate a slower line speed.

A flipper turns the pallet over and it is fed to the next station where the top boards are then nailed or replaced as needed. The pallet then passes an employee who inspects it and makes any final repairs or adjustments. He sends the finished pallet to a set of three stackers with outfeed conveyors, and a forklift retrieves them and puts them into inventory.

Watching the operation, it is apparent that the automated repair line moves with precision and speed and provides additional benefits. Stanley-Bostitch power nailing tools are suspended above the line on a pulley system; they are out of the way when not in use and handy when employees need them. The arrangement also helps to prevent the nailing tools from being accidentally discharged and causing potential injury. “Constantly lifting one of those nailers can become so fatiguing after a while that it’s possible for you to miss the pallet you are working on and have it accidentally discharge,” said George. “With the restrainers on the overhead system, you can’t do that, and there is no weight fatigue.”

Automation simplified the repair line so that new employees can master it quickly; new workers can be brought in and perform their role without slowing down the line. In fact, when the line was first installed, Nazareth Pallet hit the daily output target the company hoped for in just a few days. “We knew we had to hit a certain number of pallets per day in order to make this investment pay for itself and make it all worthwhile,”said George. “We figured it would take a week or two to come up to it. But after we got through the first day, we were like, `Wow, this is great!’ And we haven’t slowed down since.”

In fact, since putting in the automated repair line, daily pallet output has jumped over 50% per man, and it is possible that production could double. “We are now working more efficiently, our people aren’t working as hard, we have less down time for injuries or fatigue out of each person, and all of our people are taking home more cash by hitting those higher production numbers,” said George. “We aren’t worried about finding staff any more. We’re working smarter, and we aren’t losing people because the work is far less demanding, and they stand to earn more by the higher output numbers. In fact, we can hire people with less strength or who may be older because the work has become easier.”

Nazareth Pallet invested in a grinding system in 1996 to process wood scrap into mulch The investment in the grinding system, however, become a hands-on lesson in the need to carefully assess equipment and suppliers before making a buying decision.

“Much to our dismay,” said George, “the manufacturer delivered the grinder, installed it, and then effectively bid us farewell. There was no positive customer support, no repair support.” The supplier also tripled prices for replacement parts within the next few months. “That taught us some lessons real quick.”

The company now produces colored mulch, having added a coloring system supplied by Becker-Underwood. In addition, Nazareth Pallet was scheduled to acquire a used Jones Manufacturing tub grinder by later January for improving its mulch and grinding its finished product.

George had a fairly clear idea of what he wanted to do in order to automate operations at Nazareth Pallet, and AMS supplied the equipment to make it a reality. “Kris Chayer and the AMS staff were instrumental in helping us get a decent automation plan worked out and then installed,” he said. “Aside from assisting us with what components needed to go where, they were right there with us as we worked out a plan to convert our work areas without a major interruption in the work flow. We were able to completely revamp our building as well as install the new machinery without any real effect on our production. It took some creative planning and some shifting of hours to accommodate construction and production, but in the end it worked like a charm.”

AMS personnel also trained Nazareth Pallet personnel to get them acclimated quickly to the new systems. “I don’t think we would have been able to get up to speed as quickly as we did if it weren’t for their help,” said George. “And that’s the kind of customer service and support we like to see.”

Now, Nazareth Pallet can go out and seek new business without being concerned about whether or not it can keep up with demand. It has the resources and systems in place to accommodate growth. Already the company has built a sizable inventory of used and refurbished pallets so that orders can be filled immediately. The reins have been slipped, and it is free to grow and reach its real potential. “We installed the system earlier this year and expect to have it completely paid off in less than 15 months,” said George.

For now, George Frack Jr. and his brothers can enjoy having solved a major problem and having reached a family goal. As they talk in their office, smiling about what they’ve achieved, you can tell the Frack brothers are not done yet. They want to make Nazareth Pallet Company an even bigger and better part of the Lehigh Valley’s continuing story of progress and prosperity.