SOUTH ELGIN, Illinois — Honesty and integrity in dealing with customers and educating them about pallet design and specification. Going the extra mile to service them. Responsible vendors. Treating employees well, and letting them assume some ownership of projects.
All those ingredients contribute to a successful pallet business, according to Eric Girman, director of sales and procurement for Advance Pallet. This has never been truer than the COVID-19 pandemic, which has created a ton of challenges for pallet companies.
Advance Pallet has focused on serving businesses related to the food service industry. That includes agriculture, grocery manufacturing and food processing, food packaging, and cold storage warehouses. “We figured out our niche a long time ago was the food service industry,” said Girman.
About 80-90% of the company’s volume is in the food service sector, which provides steady business. In fact, even with COVID-19 pandemic disrupting the nation and its economy, Advance Pallet is doing a brisk business since Americans have been stocking up at grocery stores and buying out some items. Supplying industrial manufacturers, “there are a lot of lulls and highs” in pallet demand for that sector, observed Girman.
“The biggest thing we have going is our employees,” said Girman. Some have been working at the company for 15-20 years. “That’s probably the best investment we’ve made.” Advance Pallet has a waiting list of people who want to work for the company.
The company instituted some new practices in the wake of the COVID-19 pandemic. Employees have been instructed to wash their hands regularly, and the company learned how to make disinfecting hand wipes and has distributed them at various stations in the building.
“Our guys are staying safe,” said Girman. “I’m really proud of everybody. They’re showing up for work every day, but they’re using common sense…It’s getting us through this.”
Girman also has been reaching out to maintain closer contact with customers to stay up-to-date on how their business has been impacted and their demand for pallets. Recently the company has taken even more precautionary steps, such as having a full-time employee cleaning restrooms and common touch points multiple times per day, closed its lunchroom to limit employee contact and is providing antibacterial wipes staged at common touch points. Girman added, “Our employees are following the 6’ safety rule, wearing gloves, and face masks.”
Data Leads to Honest Pallet Counts and Better Customer Service
To keep pace with its burgeoning recycling business, Advance Pallet put in an automated pallet sorting and repair line from Industrial Resources about 14 years ago. The system can sort four grades of GMA pallets and uses barcode labels to track production.
Girman stated, “We depend on our Industrial Resources line every day. Although it is 14 years old, when we installed it years ago, the line really changed the way we process cores. Our guys were going from repairing 400 on a bench to 800 on a single shift. If I was doing cores in any sort of volume, a good conveyor line with integrated stackers is a must.”
Girman added, “We also are very picky about our core accounts, so we can get higher production than some other recyclers.”
Advance Pallet uses the Pallet Track software system from Innovative Data Systems for handling and managing the data it receives from scanning the barcode labels. Pallet Track was installed at the same time as the automated repair line. “It’s been a good partnership,” said Zach Evans, who oversees customer and vendor relations and helps manage internal operations for Advance Pallet.
Pallet cores that are off-loaded from incoming trucks are temporarily staged in areas designated for certain customers so they are not mixed, and a barcode is assigned to each load. Stacks of pallets later go to the repair line with no pre-sorting.
There are four repair tables along the line, which also has a two-tier conveyor for moving pallets and scrap material. Stacks of pallets are staged at each repair station. The repair workers sort and repair each pallet as needed and label it with a barcode. Scrap material usually is tossed into a tipping container at each repair station. At the end of the conveyor line, a scanner reads the barcode, and the pallets are routed and stacked automatically. Advance Pallet sorts pallets into four categories – AAA, AA, A, and #2s.
Now, a lot of customers use the barcodes in their own operations. “The barcode allows customers to manage their inventory if they want to,” noted Evans, and Advance Pallet can help them integrate it into the customer’s operations.
One customer taking advantage of the barcode system is a chemical business that in the past used several pallet suppliers. Dealing with several suppliers made it difficult to maintain uniformity in specifications and to recognize which pallets came from what supplier. When Girman approached the company, he pointed out that all pallets from Advance were tagged with a barcode that identified the type of pallet, grade, and who repaired it. “The label doesn’t lie,” he pointed out. “There’s accountability there.” The chemical company added Advance Pallet as a supplier. Within a year, Advance Pallet was the chemical company’s sole pallet supplier. It was able to incorporate the barcode labels internally in its own operations to track batches of chemical products.
Advance Pallet shares the data on each load of pallets with the company that supplied them. “That’s important,” said Girman. “We do it different.” The customer gets a detailed report about how many pallets were in the trailer, a breakdown of the type or footprint and the grade. The data is the basis for what Advance Pallet pays the customer for the load of cores.
Girman has been asked by some pallet brokers if Advance Pallet would be interested in taking an account for cores at a cost of $4.50 per pallet. It’s a ridiculous proposition, suggested Girman, because perhaps only half the pallets on a load may be suitable for recycling. He’s actually been told by brokers to “make the loads say what you need to say.” In other words, fabricate the data about the contents of the load in order to minimize the cost paid for the cores. “We’re seeing a lot of that out there,” said Girman. Although some pallet suppliers will sample a load from a core supplier and share that data, that can be a “shell game,” said Girman.
“We’re just doing it the right way. We can give our customers analytics on their loads — every grade, how many are repairable, how many are scrap, and so on. Transparency goes a long way with the customer.”
Upgrading and Automating for Efficiency
Having the right equipment in place has made a huge difference when it comes to efficient production. Advance Pallet invested about a year ago in a couple of bandsaws to produce cut stock. Additionally, the company has boosted manufacturing capacity by installing a Rayco Industries nailing machine to build new pallets.
For making new cut stock, Girman prefers to buy kiln-dried Southern Yellow Pine and SPF; he also buys some green pine and mixed hardwoods. “Here in Illinois, it’s hard to work with green hardwoods in the summer,” he said, because the wood is susceptible to mold. “We know how to handle wood here,” he added, in order to prevent mold, but it can still be a problem and a challenge for customers after they receive an order of pallets.
Looking at nailing capacity, the Rayco Pallet Pro has made a huge difference. “It’s really given us some flexibility and capacity,” observed Girman. In addition, the Rayco nailing machine improved quality by ensuring pallets are assembled to precise specifications. Now, when the company receives an order for custom pallets, it can mill the lumber and assemble the pallets within a day or two.
When it came time to invest in automated nailing equipment, the company considered several manufacturers. “We really liked the simplicity of the Rayco,” said Girman. The operators of the Pallet Pro can easily and quickly change over the machine to a different size or type, he noted. Advance Pallet typically uses the machine to assemble big runs of new pallets.
“There was not much of a learning curve,” added Evans. “We came out of the gate running. It’s been great.”
Rayco personnel are very accessible, added Girman. Devin McDaniel, manager of Ray’s pallet division is “very responsive,” he said. “You can call him on his cell phone, text him for a quick question.”
Advance Pallet supplies pallets for export and has a Kiln-Direct kiln, purchased about 15 years ago, to heat-treat pallets. The company’s agent for certifying compliance with ISPM-15 regulations is Timber Products Inspection.
Advance Pallet has three bandsaw dismantling machines to reclaim used lumber — a Smart Products machine and two Wood-Mizer Pallet Hawg models. Although the Smart Products machine can be operated by one man, recently the company has been using two men on all the bandsaws due to the recent busy pace. Lumber is cut to length with two pairs of Smart Product end trim saws and chop saws.
Taking Care of Customers and Employees
Girman makes it a point to educate customers about pallet design and specification. “Too many pallet companies try to offer a one-size-fits-all approach,” he said. He cited an example of a business that was experiencing pallet failure when shipping its products under load. “The pallet was under spec and needed to be redesigned,” he said. His efforts in designing a pallet for the company resulted in Advance Pallet winning the business.
“Too many companies focus on earning business by undercutting the incumbent or offering an inferior wood species versus selling a solution to pallet failures,” added Girman. “The most cost-effective pallet isn’t always the least expensive.”
Advance Pallet has established a brand as a reputable, dependable pallet supplier, said Girman. “We deliver on time. Our management is readily accessible.”
A customer once told him, ‘You don’t know how good a company is when times are good. You find out how good they are when there are problems and see how they respond. That’s how you evaluate a vendor.’ “He’s 100% right,” concluded Girman. “The best thing we have going for us is our honesty and integrity.”
Girman also emphasized the importance of communication with customers and the need to provide strong service to support them, even under extenuating circumstances. He has received calls from panicked customers — who urgently needed pallets — on Thanksgiving Day when he was vacationing in Mexico and while fishing on a Saturday morning. Their production lines were at risk of shutting down without a sufficient supply of pallets. Advance Pallet responded to those pleas — and others — to keep their customers running.
Another key to improved customer service is happier employees. Production workers earn piece rate pay. “We pay our employees very well,” said Evans, and treat them well. “That’s why we don’t have labor issues.”
The company also has a policy of educating employees and involving them in ownership of projects. “Just because I’ve been doing this for 20 years doesn’t mean my idea is the best or end-all, be-all,” said Girman. “I’m amazed every day by the ideas generated from our laborers, drivers, and management. “
Advance Pallet Backstory
Advance Pallet has been in business for 35 years. From its location in South Elgin, Illinois, a little more than 40 miles northwest of Chicago, it serves customers in the Chicago region, southern Wisconsin, and Northwest Indiana.
The company’s plant, where it makes pallet stock, recycles used pallets and manufactures new pallets, is located on five acres and employs 50 people. About 60% of pallet production is recycled pallets and the remaining 40% new and ‘combo’ or combination pallets made of both new and reclaimed lumber. Recycled pallets include repaired pallets as well as remanufactured pallets, which are assembled from reclaimed lumber.
The current owner purchased the company two years ago when the founder retired. The founder was a truck driver who soon realized that companies were constantly looking for pallets and started his own pallet shop.
Girman joined the company 20 years ago, and the owner taught him everything about the business from top to bottom. He repaired pallets, built pallets, operated saws, managed pallets at docks, loaded trailers, and drove trucks.
Girman in turn hired a production manager and trained him, then devoted himself to full-time sales. He quickly learned the company could move beyond supplying GMA size pallets and expanded. “I recognized the opportunity to do more than 48×40 pallets,” he recalled. “When the company began offering to build odd-size pallets, annual sales jumped from about $1 million to $4 million.”
Advance Pallet produces about 150 different pallets, estimated Girman, although GMA pallets are the company’s biggest seller. “We can build just about any size.” Custom pallets range from tiny 20×20 pallets to skids that are 144×36. Every type of pallet a customer orders is assigned a SKU number that identifies the pallet by the size, specification, and grade. That ensures consistency for the customer, noted Girman.
“In this industry,” he said, “there’s no consistency. It’s the Wild West.” Different pallet suppliers have their own terminology and set of specifications for various grades of pallets. Always seeking to deliver on customer promises is not easy, and it has become harder during COVID-19. But Girman insists that customers appreciate a pallet supplier that shoots straight and will go the extra mile.
He summarized, “Our most important selling point is our company promise. We listen to what each customer needs and then build our trust capital with competitive pricing, reliable delivery and a customizable process. Finally, we do this with a passionate group of men and women who love the pallet industry.
