SOUTHAVEN, Mississippi – Known for renting millions of blue pallets, international pallet pooler CHEP also produces millions of new pallets each year at its company-owned facility located in Southaven, Miss. Designed to do one thing, and do it extremely well, CHEP’s Southaven block pallet plant is the picture of efficiency.
With all the discussion in the industry about producing block pallets, CHEP’s facility is ready to help meet the increasing demand. The plant can produce about six perimeter-based block pallets per minute on each of three nailing lines. Given the complexity and quality control involved in the CHEP process, these lines are humming. As CHEP sought to find the ideal machine for producing its own pallets, the rental giant turned to GBN Machine & Engineering Corp. for its nailing lines and Automated Machine Systems (AMS) for pallet painting, stacking and materials handling systems.
Doing One Thing and Doing It Extremely Well Is CHEP’s Production Secret
Readers who are familiar with building block pallets, particularly perimeter-based block pallets, are aware that they are much more labor intensive to build than stringer pallets. The typical CHEP pallet presents its own unique manufacturing challenges and costs more to build than the average GMA. The details of CHEP’s pallet specification and control over quality are easier to deliver with the right automated system than they are using hand nailers and collated nails. So, it was natural for CHEP to investigate carefully its machinery options for the Southaven plant.
Several European machinery companies manufacture nailing systems that are capable of building perimeter-based block pallets. But CHEP chose to look for a U.S. nailing machinery option since service, freight from Europe, and foreign currency exchange rates can increase the cost. CHEP turned to GBN because it has a reputation for developing flexible machines capable of both block and stringer designs. GBN agreed to re-design its Excalibur I, a high speed stringer pallet tandem manufacturing system, to accommodate CHEP’s needs. The new system, called the Excalibur II, basically redesigned the Excalibur I to make perimeter-based block pallets instead of stringer pallets. In addition, it focuses specifically on automating the materials handling steps in perimeter base block construction, using hoppers and conveyors versus the more conventional approach of hand feeding. Everything is done on “the fly,” with a focus on safety first, and then productivity.
A second design change incorporates a variety of clinching techniques, including roll clinching and crush clinching. In roll clinching, which GBN developed about 2004, the plate moves to guide the nail through its clinch. Crush clinching forces the clinch by driving a nail against an immovable steel plate. Raj Nainani of GBN said, “A roll clinch is a better clinch.” For CHEP, this means better pallet durability and reliability for customers.
For several years I have heard about the high production coming out of Southaven and was pleased when CHEP opened its doors for me to tour the facility, which opened in April 2005. Several things stuck out to me in short order after entering the factory. Most pallet manufacturers dream of having a pallet manufacturing facility where they do not have to change pallet specifications and can focus on efficient manufacturing speeds and product quality. Because CHEP can concentrate on this one pallet design, it can achieve incredible production rates despite the difficulty involved in making this pallet. The factory was immaculate. Not having to deal with any cutting and sawing eliminated disposal problems and made for an unusually clean atmosphere for a pallet plant.
CHEP receives dozens of lumber deliveries everyday at the Southaven plant which uses a combination of lumber species. Scott Reid is the director in charge of CHEP’s pallet lumber. He keeps his eye on the species, the square ends, the quality, etc. CHEP has instituted controls that monitor quality back to the source, including third party audits for the presence of chemicals and mold.
GBN Plays a Critical Role in CHEP’s Plant
Multiple GBN nailing systems run two shifts in the Southaven facility. CHEP keeps detailed production numbers in order to track productivity and efficiency.
Paul Bailey of GBN said, “We promised CHEP that the Excalibur II would manufacture at least 275 perimeter-based block pallets an hour. I will not lie about production numbers. Our reputation rests on doing what we say we can do. The Excalibur II has a cycle time of 450 perimeter-based block pallets an hour if you never run out of wood, nails, etc., and everything flows through at maximum capacity.”
CHEP confirmed that it has experienced production rates well in excess of the 275 pallets per hour that GBN initally promised. According to CHEP representatives, they are very pleased with the partnership with GBN and their willingness to customize equipment for their needs. Building and maintaining high quality pallets is a team effort in CHEP’s operations, with suppliers paying a very critical role for innovation in equipment and processing.
AMS Lines Complete the Process
Many pallet manufacturers have a limited exposure to paint booths and painting pallets. At Southaven, newly constructed pallets, as well as pallets from the onsite repair facility are painted individually, go through a dryer, and then are stenciled.
AMS installed the PalCoat ® 600 Single Pallet Paint System at Southaven. This paint system is integrated with a GBN Excalibur II high speed block pallet nailing system and pallet stacker. The paint line on the PalCoat ® 600 is a high speed, single pallet painting system which applies paint to both the ends and sides of each new pallet.
After paint is applied new pallets are conveyed into the drying line, and then onto an automatic stencil line which uses pad printers to stencil the necessary logos on all four corners before sending the pallet into a stacker for pickup. The drying function focuses on drying the four blocks that will be stenciled. The rest of the paint dries as a side benefit, not an objective of the drying effort.
While CHEP does not disclose actual repair numbers or percentages, Derek Hannum, director of marketing for CHEP USA, indicated that repair percentages vary considerably from one depot to another due to what customers are being serviced by that depot. Like anything in life, some applications are rougher on pallets than other.
To filter paint droplets out of the air, the PalCoat paint systems use filtration media that is changed multiple times each day. The filtering process provides a safe working environment for employee health and maintains cleanliness in the environment.
CHEP also operates a pallet reycling line at its Southaven facility. It is equipped with a full pallet sortation line from SMETCO.
Keeping Things in Order, A Productive Workforce Drives Top Performance
House keeping is a big issue at the Southaven plant. They buy all their lumber cut to size, so they do not have the scrap wood, sawdust, and wood fiber that is so common in a pallet manufacturing plant. CHEP recycles all of its banding – wrap it up and sell it. It recycles its nail boxes as well. CHEP throws out the trash every day and recycles all its packaging material. Environmental sustainability is designed into all of CHEP’s processes, and CHEP suppliers are expected to drive toward a zero-waste approach.
A reliable and steady workforce has also been a key to this facility’s success in meeting pallet demand. Bob Gossitt, plant manager since May 2005, indicated that their work force is very dependable. CHEP keeps its systems running throughout the shifts by rotating people in and out. Bob also stated that he is very, very pleased with both GBN and AMS as suppliers. He stated, “They have been very dependable.”
CHEP didn’t always produce its own pallets in the United States. In the 1990s, CHEP bought pallets from a group of eight or ten different suppliers. This group gradually evolved to include fewer suppliers as CHEP worked to fine tune its supply chain.
During the 2000s, just a few pallet manufacturers continued to build new CHEP pallets. CHEP opened its own pallet manufacturing plant in 2005 in Southaven, Miss. CHEP owns the machinery in this plant and contracts out the plant management function which is third party operated.
CHEP Pallet Evolution in the United States
In 1988 and 1989, CHEP started purchasing pallets for its U.S. pallet rental system. CHEP’s first U.S. pallet was a heavy-duty stringer design with top hardwood lead boards that were butted to Southern Yellow Pine(SYP) interior deck boards. The interior deck boards and stringers were SYP.
A Chicago company was established to do a feasibility study and learn more about the pallet industry. This was the first step to prepare the CHEP organization to setup a rental pool in the United States. After attracting some of the largest grocery manufacturers in the country, CHEP grew and continued to experiment with its pallet design. It found that retailers preferred the block design and decided to transition its pool away from stringer pallets. CHEP bought its first SYP block pallet in the U.S. in the 1993-1994 time frame as it prepared to transition its pool.
In the late 1990s, CHEP started phasing stringer pallets out of its U.S. pool as it transitioned to the perimeter-based block pallet pool it has today. Even its block pallet specification has undergone changes. One of these improvements was to clinch nail top deck boards to improve the strength and quality of its pallets. Today, its perimeter-based softwood specification is the strongest block pallet that CHEP has ever had in the United States.
The most significant changes in CHEP’s pallets in the last ten years are probably the species and sources of lumber and the pallet manufacturing companies. At one time, SYP lumber was the softwood of choice. Because of the fluctuations in SYP prices, CHEP looked for alternative softwood species and source locations. The CHEP pallet continues to evolve as the company tests numerous new design concepts each year at its Orlando-based Innovation Center.
One of the most innovative new developments at CHEP is the introduction of what CHEP calls its pallet test track. The test track is actually a supply chain simulator that mimics the stresses and impacts that a pallet endures during a typical trip through the supply chain. The new facility, which opened in January, 2011 in Orlando, Florida, involves pallets under load moving via automated conveyor through a series of impact stations and forced stress situations similar to fork lifts, pallet jackets, and warehouse racking and conveyor systems. The facility, which represents a multi-million dollar investment for CHEP, will deliver more value to customers by enabling the innovation process for new products and product improvements. Expanding and improving the product offering globally is an essential element in CHEP’s growth strategy.
