This column continues my earlier discussions pertaining to pallet buyer advice. See earlier installments, Dirty Tricks Pallet Buyers May Encounter and How to Avoid Them (http://goo.gl/TPd9F8) and How Do Pallet Buyers Inadvertently Shoot Themselves in the Foot (http://goo.gl/zhHbtB).
In my experience, the three most urgent questions asked by wood pallet buyers (and for that matter, plastic pallet buyers as well) are about price, price and more price. While all three of these are important questions to consider, there are, however, a number of additional factors a pallet buyer should evaluate when it comes to harmonious relationships in the supply chain.
The pallet is a highly engineered structure that must interact in some very sophisticated logistics and supply chain systems. In fact, a thorough checklist such as used by many suppliers when investigating a particular application is too long to list in this column. The good news is that as a pallet buyer you need not be a pallet expert. That’s the reason why you work with a quality pallet provider.
But to be a smart buyer, you should be prepared to ask a short list of the right questions. This will help ensure that you get a solution that provides the best overall value to you and other stakeholders in your supply chain.
Ask about Stiffness
During a recent presentation at the 2014 PACK EXPO Show in Chicago, Laszlo Horvath, director of Virginia Tech’s Center for Packaging and Unit Load Design, emphasized how stiffness can be ignored.
Stiffness, the resistance of the pallet to deformation under load, is one of the most overlooked characteristics of pallet design. Many pallets don’t break under load but are not stiff enough to protect the product.
According to Horvath, stiffness tends to get the short end of the stick when customers look to find price reductions when maintaining the same load capacity. Horvath noted that you can have two different pallets rated for 2800lbs., but if there is pressure to take a dollar out of the price, thinner deck boards will result in a less stiff pallet with the same load rating. It is important, he noted, to understand the impact of less stiffness in stress distribution. In some cases, some bottles may be subjected to 10 to 20 times the stress than stiffer pallets, resulting in leakers and a host of costs that far outweigh the pallet cost reduction.
While I was at the show, I also raised the topic of stiffness with a rental pallet representative from PECO, who noted that packaging is increasingly minimalized because of the rental pallet’s stiffness, but customers do not always take into account less pallet stiffness if they switch to cheaper white wood pallets for shipments to non-rental customers, again resulting in leakers or quality issues.
Ask about Overall Unit Load Packaging Costs
Work with a vendor who can provide software analysis of overall unit load impacts. Horvath commented noted that when a pallet buyer is driven to cut costs, they are looking to cut 10% across the board – 10% out of the corrugate as well as 10% out of the pallet. This approach can result in product damage. On the other hand, if increased investment in pallet quality results in the need for less corrugate, the overall unit load packaging savings can be significant. “If you look at the complete cost, you can save a lot of money by reallocating where you spend,” Horvath emphasized.
In a similar vein, Dr. Mark White, in discussing Best Load™ unit load design software, emphasizes that savings associated with a systematic unit load approach to packaging and pallet selection typically results in cost savings in the 8-18% range.
Ask about Other Approaches to Getting to the Same Ends
In a time of high hardwood pricing, it is important to be flexible about other options for getting the best pallet for the job. Don’t get hung up on the legacy pallet specification and work with your supplier to explore other options.
“As hardwood becomes scarcer, buyers have to become aware and open to using alternative species in pallet design. Some customers are slow to consider it to their detriment,” one pallet industry leader told me a few months ago.
This openness could lead to a change in footprint size if you are looking for used pallets. Or maybe you change species from a hardwood specification to allow for softwood or recycled lumber.
Ask about ‘Cost per Trip’ Options
Increasingly through programs such as 9BLOC or creative custom solutions, pallet companies are more receptive to offering ‘cost per trip’ programs that allow the pallet buyer to enjoy a better quality pallet at a better price. The system works when the pallet provider or other allies can retrieve the pallet, refurbish if necessary, and re-issue to you or another pallet user. Instead of paying the entire cost of the pallet, you are just paying for the use of it for your particular delivery.
Ask about Durability Features
There are a number of design elements that are critical to pallet durability, and if you are looking for a durable pallet, it is well worth asking about them. For example, a 5 -6% increase in the amount of fasteners can translate to a 56% improvement in pallet durability.
Horvath stated that while fasteners only account for about 5% of the price of a pallet, a small investment in better fasteners can truly pay dividends. Another well-known durability enhancer is having butted lead boards, which translates into a 38% improvement in longevity. Other durability enhancing options include the use of hardwood versus less dense hardwood or softwood, and air dried lumber versus green. Additionally, forklift accessories such as the Pallet Protector or pallet accessories such as the pointGUARD can help improve pallet durability.
Horvath cautioned not to invest more than necessary in pallet durability. For example, he noted, do not invest in durability beyond the length of anticipated pallet ownership, and do not invest in durability for a period greater than ten years. He noted that products evolve over time, and when products evolve, pallet design requirements also change.
Finding the Right Match
You need to ask about how your pallet can help deliver an overall superior solution to your customer at the best price. This generally requires you to find out about the customer’s load and aspects of its supply chain that could affect pallet design and selection.
There are so many variables that go into a pallet selection. Whether the issue is mold, sanitation, handling system compatibility, leakers, disposal or other concern, you need to be willing to take a creative approach to challenges. This requires flexibility on your part and willingness to work with the customer to think about different options. Trying things beyond the same old pallet can help you find a better solution and maybe even save total packaging costs. As the pallet expert, remember it is your job to find creative solutions that can enhance supply chain excellence while keeping costs low.
