KANSAS CITY, Kansas – Reardon Pallet just recently automated its pallet repair operations, but Dan Reardon Jr. envisions even more automation in the future for the company as well as the overall pallet industry.
Reardon Pallet is a family business located in Kansas City, Kansas that mostly serves customers in a 100-mile radius. Within the last five years, the company moved to a larger facility that has given the company space to grow and automate.
The company’s pallet plant is located in a 137,000-square-foot building on about five acres and employs about 45 people. Almost 50% of its production by revenue is new pallets, and the remainder recycled pallets delivering about 20-25,000 pallets total per week. The company began operating its new automated pallet repair line, supplied by Automated Machine Systems (AMS), in December.
Automation became a necessity due to the labor crunch and the inefficiency of manual operations.
AMS Repair Line Leads the Way to Quality Control
Earlier in its history, Reardon Pallet devoted four employees to repairing pallets, producing a combined 1,500 pallets per day. As the number of repair workers and volume increased, the footprint of the work area increased. Stacks of pallets proliferated. The workers used pallet jacks to move stacks. It wasn’t efficient, it wasn’t productive, and it wasn’t the safest environment either. It required the repair workers to handle and move pallets more frequently.
“Logistically, it just wasn’t sound,” said Dan Reardon Jr., vice president and son of the founder.
Another issue was the company could not ensure strong quality control since finished pallets were already stacked by the repair workers.
Reardon Pallet considered several pallet industry suppliers that provide automation for pallet recycling. However, the company already had a relationship with AMS because it had invested in the PalMate system a few years earlier. The Reardons toured other pallet companies with automated repair lines and solicited their input and opinions. They considered various factors, including pallet volume, pallet quality and other factors. “We really wanted to dive into this thing with our eyes wide open,” remembered Dan.
The Reardons narrowed their decision to two finalists. “Ultimately, our relationship with AMS and our confidence in them put them over the top,” said Dan.
The company’s AMS repair line has 10 workstations set along a two-tier conveyor. Incoming pallets unloaded from trailers are staged on gravity conveyors at each station – three stacks per station. Workers remove a pallet from the stack they are working on, place it on their table, inspect it, and repair it as needed. They attach a barcode label that identifies the worker and the pallet grade and slide the pallet onto the lower conveyor. Scrap material is tossed into the upper conveyor and empties into a dumpster. Also, an inspector checks pallets for quality before they enter the stackers. At the end of the line, a scanner reads the barcode label, and pallets are automatically routed into one of five stackers
The AMS system is much more efficient than the company’s previous work area. For one thing, it only occupies an area about one-third as big. It also cuts down on the number of stacks of pallets in proximity of repair workers. It eliminated a lot of the heavy lifting of handling and moving pallets by hand, making the work easier. Production increased: experienced workers increased their output by 15-20%. “We don’t have to employ as many people to get the same production,” explained Dan.
The changes also enabled the company to hire a full-time quality control inspector who is stationed in the middle of the repair line. He inspects each pallet and removes any that don’t pass muster. “We get quality control that is much better,” noted Dan. “We’ve had no complaints on quality in the past six months because now we look at each pallet individually.”
Another benefit of the system is that, since the work is easier, it opens up the pool of potential employees. “It’s made it easier to find people to work on the line,” said Dan. “Now we have people who are qualified who otherwise would not have been.”
(For more information on AMS equipment and services for the pallet industry, visit www.automatedmachinesystems.com).
PalMate Software Makes Data Usage a Snap
Before investing in PalMate, an enterprise resource planning (ERP) software program, Dan used a series of Excel spreadsheets to help manage the tasks of tracking trailers, delivery, production and other business functions. However, the different spreadsheets were not integrated with each other. Dan had to extrapolate the information he sought.
Although there are other types of ERP software, PalMate “made the most sense for us,” commented Dan, because it is designed for the pallet and wood processing industries.
“It’s been tremendous,” he said. It captures and delivers more information about the various aspects of the business without having to analyze data in a spreadsheet and extrapolate from the data. “PalMate does all that for me and saves me a lot of time,” explained Dan.
PalMate has components for capturing and managing information related to production, payroll, scheduling, cost analysis and aspects of the business. It also integrates with the barcode system used on the repair line. The data from the barcode reader is captured, tracking each worker’s production.
Reardon Pallet Becomes Fully Integrated by Acquiring a Sawmill
Instead of relying just on the open market to supply lumber, the Reardons have acquired a three-man sawmill in 2015 to provide some of its supply. Shamrock Timber Products is located a little over 60 miles north in St. Joseph, Missouri.
In 2014 wet conditions hampered logging and log supplies, and lumber prices spiked as a result, recalled Dan. Mills sold their production to customers where they could get the best price. Reardon Pallet made the decision to have its own sawmill in order to be able to guarantee its customers a steady inventory of lumber for pallets. Since acquiring the mill, the Reardons have expanded it to increase production.
The sawmill is equipped with a Hurdle Machine Works headrig. Since acquiring it, the Reardons have added a Pendu gang saw, a Morgan single-head band resaw, and a Smart Products double-head notching machine.
The sawmill, with eight employees, is “gold in terms of covering the needs of our customers,” admitted Dan. The mill cuts mainly oak and cottonwood, producing finished deck boards and stringers. Some material is trucked to Reardon Pallet to be cut to length. All of the mill’s production goes to the Reardon Pallet plant and accounts for about 40% of the cut stock the company buys. Going forward Dan wants to improve yield, production and efficiency at the mill.
“Log supply is low today,” said Dan. “Six months ago it was overstocked. Having good loggers is now our bottleneck.”
“So far this year, sales are up because wood prices are up,” explained Dan, although pallet volume is the same. Wood prices have started to retreat, he noted.
“You have to stay flexible on price increases and decreases,” said Dan. Customers need to be educated on the need to raise pallet prices when the cost of wood goes up. Accordingly, they expect Reardon Pallet to pass along the savings when wood costs decline – which it does.
The core market is “a mess,” suggested Dan. “It’s very volatile. You don’t know what to expect one minute to the next. Supplies are tight, and prices are up.”
Committed to Customer Needs
Although the majority of its pallet production is pallets with the GMA 48×40" footprint, Reardon Pallet unabashedly will build just about anything a customer wants and in about any quantity. “Our philosophy is we will build anything anybody needs,” said Dan, “if it’s 10 inches long or 20 feet long. Even if it’s a small quantity, we’ll still consider it. That’s how we started our business. We took accounts no one else wanted.”
Not surprisingly, the company builds a wide range of custom pallets, particularly large pallets and skids – such as 5 feet long, 10 feet long, 20 feet long. By the same token, it also builds a lot of small pallets used in retail displays – such as 24×24" and 20×48". In all, the company produces about 300-350 footprints, Dan estimated.
Reardon Pallet has customer accounts in logistics, manufacturing, food and grocery warehouses, and food and grocery manufacturing.
Dan’s father – Dan Reardon Sr. – started the business in 1995, his second career after a first career in banking. At 68, he still serves as president and works every day, focusing his time and energy mainly on the company’s finances, receivables, and some customer accounts.
Dan, 42, began working in the business as a teenager and continued through college. He joined the business full-time in 2006. Dan’s managerial role in the company includes overseeing production and sales as well as human resources and accounting. His brother, Tom, 38, joined the business in 2001 and manages satellite accounts and those off-site operations. At the satellite accounts, Reardon employees conduct dock sweeps for customers, collect cores and load them on trailers and segregate scrap pallets. Dan’s brother-in-law, Jason Kane, heads up sales.
The pallet market in the Kansas City region is competitive, noted Dan. “Just like any other market. Some other pallet companies have been around a long time, but we have our piece of the pie, and the pie has grown significantly.” Four intermodal parks have been developed in the region in the past 10-15 years. “That’s helped bring in a lot of distribution centers,” said Dan.
The Rest of the Operation
Reardon Pallet has three Smart Products bandsaw dismantling machines for disassembling pallets to recycle the used lumber. Two people usually work at each machine, with one person running the dismantler and one person sorting the reclaimed lumber. The company is also equipped with several PRS trim saws for cutting recycled lumber to length.
Besides building new pallets and repairing pallets, Reardon Pallet makes ‘combo’ pallets from both new and used lumber as well as ‘new’ pallets from 100% recycled lumber – a lot of the tiny pallets are made with all recycled lumber.
Reardon Pallet also has a Smart Products single-head notching machine for notching stringers and a Viking Champion nailing machine for building new pallets. A kiln from Kiln-Direct enables the company to provide heat-treating services.
Besides buying pallet cores, Reardon Pallet buys cut stock in various sizes from its affiliated sawmill and other mills. The company occasionally buys random length lumber for stringers and cuts it to length. It also buys some new pallets from Amish pallet manufacturers.
Dan expects the company to invest in more automation in the future just like others in the pallet industry. “It’s coming in the near future,” he predicted. “A lot of automation is coming into the pallet industry. We can’t hire employees to do the simplest tasks.”
Reardon Pallet will be looking at options for automated pallet assembly, pallet dismantling and cutting lumber.
Dan suggested, “In my opinion, companies that choose not to automate will be left behind. The barriers to enter the pallet industry are so low, which makes it tough to get a competitive edge. Those barriers will increase as companies automate more and increase volume.”
