Do you have pallet problems? Are you suspicious that you may not be getting what you used to from your supplier? Have you changed your requirements to reduce costs or better target your needs? If you said “Yes” to any of these scenarios, it may be time for a pallet audit of some or all of your suppliers.
A pallet audit can be described as a systematic and objective examination of pallets. Typically, the audit inspection will involve confirming that the pallets meet the required specification, the required condition in terms of being free of damage or infestation, etc., and that the correct number of pallets has been received. A pallet audit may also include aspects of customer service such as on-time delivery or type of delivery vehicle used.
The purpose of the pallet supplier audit is to ensure that pallets being delivered meet contractual requirements, and if they don’t, to provide accurate and timely feedback to decision-makers regarding deficiencies identified in the audit process. Concerns about consistent pallet quality are increasingly being recognized, as identified in a recent survey undertaken by Modern Materials Handling magazine. Materials handling automation is becoming more prevalent, and such systems are often sensitive to pallet quality. Meanwhile, food safety, as well as occupational health and safety, are also trends driving the need for consistent pallet quality.
Audits can also be undertaken for pallets received under load from your suppliers, or of empty pallets returning from trading partners. I’ll consider those types of inspection opportunities later in the column. But to start with, here are some of the things to watch for in your pallet supplier audit process.
Key Areas to Monitor
Pallet Specification – Ensure that the pallets you are receiving match the agreed-upon contractual specification, whether for a new custom pallet, a recycled grade or a rebuilt product. Things to watch for include correct component measurement and placement, board thickness, wood quality, fastener placement, or exposed nails. In the case of recycled pallets, other considerations include companion stringers or deck board thickness variation. Because wood is a natural material, however, there is always going to be some degree of variation even in new pallets, experts caution. It is always possible to find minor variations in a very high-quality load of pallets, as well as to find some perfect pallets in a generally poor-quality load. When auditing, therefore, it is important to measure many pallets from throughout the load, rather than just taking a few measurements or just concentrating on a few stacks.
Pallet Condition – A pallet condition inspection typically starts with the identification of damaged or missing components. Other variables include wood moisture content, excessively dirty appearance, as well as signs of infestation or contamination such as staining, spillage or off-odors. The presence of surface mold is another concern. Care should be taken to determine if mold is actually present or whether the issue is staining. In order to determine whether a pallet has blue-stain or mold, a recent National Wooden Pallet & Container Association brochure suggests to “Lightly rub the affected surface of the wood. Mold grows on the surface and can be brushed off or smeared, whereas blue stain penetrates deep into the wood and cannot be removed. Blue stain poses no health risk, and blue-stained lumber is safe to handle.”
Quantity – While companies usually have a rigorous receiving process forinducting new inventory into their facility, the same scrutiny might not hold true for supply items such as pallets. In some operations, new pallets left on a drop trailer go straight to production and are pulled off the trailer as needed, so a formal receiving count is not taken. Take time to verify that the pallet count you are signing for matches the paperwork and that any count discrepancy is noted and forwarded to accounts payable.
Customer Service Elements – Your pallet audit may also include elements of customer service. For example, did the pallet delivery arrive within the scheduled window? Did it arrive on the specified type of vehicle (van or flatbed)? Was pallet stack height compatible with overhead door heights? Were pallet stacks banded (if required)?
Inspection Process – While some companies initiate a series of ad hoc pallet audits in response to occurrences of pallet issues, other companies audit proactively and have developed a formal process for streamlining the activity. Mondelez International, for example, has a detailed pallet inspection document. It includes instructions about where to sample pallets from a load and how many in total. A checklist with a detailed pallet drawing allows the auditor to code the nature of a deficiency and the location on the pallet where it occurs.
Other Pallet Audit Opportunities
As mentioned above, other pallet audit opportunities include pallets received under load, pallets returning empty from trading partners or deliveries, as well as operational audits.
Pallets Received Under Load – Pallets received under load from trading partners should be inspected by receiving personnel to ensure that they meet the requirements of your pallet policy regarding specification and condition. Companies may have procedures requiring the transfer of product from non-conforming pallets, or refusal of the palletized load entirely if on an unacceptable pallet.
Pallets Returning Empty – Pallets returning empty from deliveries, internal operations or trading partners may also be audited to answer questions relating to pallet damage frequency, high-frequency types of damage, and pallet return rate. By auditing returns from deliveries or trading partners, any occurrences of low return rates and possible leakage problems can be identified. Audit information can also be useful in pinpointing the types of pallet damage being experienced and may be used to initiate a CAPA (Corrective action/preventive action) to identify and address the root cause of the damage.
Operational Audits – An operational audit can identify if proper pallet handling and storage practices are being maintained in the workplace. For example, in the spring, is care being taken to ensure that pallets are stored in a dry, well-ventilated location with adequate light to prevent the occurrence of mold? Inside the warehouse, are pallets being left standing up on end where they could result in injury, or left on pedestrian pathways or in front of emergency exits where they could impede pedestrian traffic?
Three Big Ideas
As promised at the beginning, I’ll close this column with three big ideas. First of all, recognize that the need for more consistent quality continues to grow, thanks to trends such as automation, food safety and worker safety. Supplier auditing is one way to get a better handle on quality issues in order to seek a common understanding with your pallet vendor about what you need.
The second big idea is that there are several potential items to watch for when performing a pallet audit, as listed above. Using a checklist can help make the process more orderly while creating an easy-to-follow data trail.
Finally, the third idea is that elements of the pallet audit should be incorporated into formal business processes as applicable. By building pallet audits into your process, you can help identify problems early and avoid the types of pallet calamities that ad hoc pallet audits scramble to address.
