LEXINGTON, N.C.—Ice cream or fixing pallets? There was a time when Neal Grimes had to choose between buying an ice cream parlor or a pallet recycling business. He chose well. Today, Pallet Resource of N.C. Inc. is a diversified pallet operation with a national reputation. From its roots as a backyard pallet recycling operation in 1967 under a previous owner, the company has expanded. Although specializing in pallet repair and remanufactured pallets, products and services include pallet design and manufacturing (along with specialty crates), retrieval and recovery, disposal, grinding and wood fiber products. Neal was looking to get into business for himself in 1986 and was exploring options. “He came from a furniture manufacturing background,” recalled his son, Mac, now general manager at the company. Neal had been manager over a couple of plants. “Burlington Furniture wasn’t doing so well over that time period, and he saw the writing on the wall. He made up his mind that he was going to do something different and not depend on anybody else for a paycheck anymore.” “He looked at a bunch of different things,” said Mac. One of the many businesses that Neal contemplated — and in retrospect, fortunately did not acquire — was an ice cream parlor outlet. The shopping mall where the ice cream parlor was located no longer exists. Neal decided on the pallet industry. At the time he bought the company, it had only a handful of accounts, but he believed that the business had potential to grow. When Neal purchased Pallet Resource, it was a 12-man operation located on a one building, four acre lot in Lexington, which is about 60 miles northeast of Charlotte. Now with about 73 employees, growth has been as predictable as the company’s commitment to quality products and service. Pallet Resource is still located at the same site but has expanded to 22 acres and several buildings. It now has over 200 customers, including food industry, textile and manufacturing companies. Pallet Resource also is a partner with First Alliance Logistics Management, which enables it to offer pallet recovery and retrieval on a national level to customers. One key to success has been an ongoing investment in good equipment and new business opportunities, such as wood fiber. “He’s put a lot of money back into the company,” Mac said of his father. Pallet Resource made a considerable investment about a year ago to automate its pallet recycling operations. The company purchased an automated repair line from Industrial Resources of Michigan. The goal was to increase production and control labor and other costs, said Mac. The company has not been disappointed by the results. “We used to have three forklifts in the repair shop and now we’ve only got one”with a double set of forks, said Mac. The number of men repairing pallets has been reduced from12 to eight yet production has increased. One of the biggest benefits of the new automated line is the capability to process pre-sorted non-GMA pallets along with GMA pallets simultaneously. Some automated systems are limited somewhat to processing only one or the other but not both types at the same time, Mac noted. The company also found the automated line makes the work easier for the men performing repairs and reduces injuries; a lot of the manual labor involved in moving and handling pallets was eliminated. “Ergonomically it is a lot easier on the guys,” Mac noted. “They spend more time repairing pallets and less time lugging them around. We haven’t had any back injuries at all since the installation.” The Industrial Resources system begins with a powered infeed. A short conveyor moves stacks of incoming pallets into a bucket tipper that tips a stack of pallets down. A chain with dogs brings one pallet at a time to a prep table equipped with an Industrial Resources Clipper lead board remover. “If a pallet is broken, about 80 percent of the time it is a lead board,” Mac noted. The worker manning the Clipper decides whether or not a pallet can be repaired. If it is not worth repairing, he directs it for dismantling and lumber recovery. If it can be repaired, he removes damaged lead boards as needed with the Clipper but does not remove any broken interior deck boards. Then he slides the pallet onto the middle conveyor of a three-tier conveyor system. The bottom conveyor is for outbound pallets that have been repaired and the top tier is for moving scrap material. At Pallet Resource, repairs are a four step operation for a staff of eight workers. Broken pallets move on the middle conveyor to the repair workers, who slide them down onto a repair table. They attach new leading deck boards, replacing damaged ones removed earlier by the Clipper. They also remove damaged interior deck boards and replace them. The finished pallets are slid onto the lower conveyor and move to four automated stackers that can be set for pallets of different grades or sizes. Pallet Resource does not use a plater for repairing cracked or damaged stringers in its recycling operations. As Mac explained, “Our market is very strong for a number two and number three grade pallet. We have never seen a need for a plater.” At the same time, the company produces plenty of #1 pallets for customers that require them. The repair line is integrated with a bar code system from Innovative Data Systems that has made record keeping more efficient and accurate. The information system tracks production of the repair workers, who are paid by piece rate. The bar code labels, attached to the finished pallets by the repair workers, are read by a scanner that is linked to a computer in the office. The company receives ‘real time’ data on output by both employee and pallet type. “It is an excellent management tool,” said Mac. “You can see who is producing and who is lagging. I find that if I am out there watching, then everybody seems to pick up the pace. But I can go in here and look at the computer and evaluate productivity, and I can get together with the supervisor and say, ‘Hey — what’s going on? Is he sick today?’ “ The bar codes and information system also enable the company to trace back a pallet to the worker who repaired it, although the company has had little occasion to use this capability. “We have never had this happen, but if we ever had a substandard pallet, I can tell exactly who did it and when, so I can go back to that person,”said Mac. At the end of the day, Pallet Resource uses the information system to compile a production report. It takes about two to three months to design and build the equipment for an automated repair line, according to Wayne Carrigan of Industrial Resources, but the installation can be handled quickly — within a few days. “We try to do the installation without disrupting normal operations,” said Wayne, “starting on a Friday afternoon and working through the weekend and finish by Monday.” Pallet Resource sorts incoming non-GMA pallets in a separate area prior to putting them on the Industrial Resources repair line. Most of the time the line is dedicated to GMA pallets. However, when a couple of truck-loads of 42×42 or some other common sizes are accumulated, then they will be put through the Industrial Resources line. Pallet Resource has a cut-up line to manufacture components for pallet repairs and manufacturing new pallets. It buys mixed hardwoods and softwood. Raw material grades 3 and 4 kiln-dried, S4S Southern yellow pine 2×4, 2×6, 1×4 and 1×6, hardwood cants from 3 1/2×6 to 6×6, and 4/4 to 6/4 hardwood board stock. Eric Carter oversees the cut-up operations, which are equipped with a Brewer five-head multi-trim saw and a Brewer Golden Eagle 2000 four-head band resaw system. The company also has a Brewer double-head notcher for notching stringers. A portable yard saw was customized by maintenance supervisor Sam Hilton, who fabricated a frame and base; it is used to cut bundles of long-length Southern yellow pine to size. Raymundo Maya leads the new pallet manufacturing department, which also produces crates and shipping boxes. “We’re not in the business of doing five loads of GMAs on a daily basis,” said Mac. “We are more specialty oriented.” The company uses the Pallet Design System computer software designing pallets for customers. Pallets are assembled by hand with Stanley-Bostitch power nailing tools. The company has a sales staff of two. Al Hinson makes visits to customers and potential customers in order to market the company while Mac’s brother, Steve, generally makes sales calls via phone. Pallet Resource produces a considerable volume of remanufactured pallets – pallets made of reclaimed lumber or a combination of recycled parts and new components. The pallet dismantling and lumber operations are equipped with a pair of two-man Clary Hustler band saw machines for disassembling pallets and three Clary E-Z Saw trim saws for cutting used deck boards and stringers to size. The band saws are set up so that one operator can sweep reclaimed deck boards onto a conveyor that takes them to a trimming station while the other operator places recycled stringers into a separate conveyor to be routed to another trim saw. Pallet Resource added a new dimension to its business several years ago, creating a new product line and source of revenue while diverting pallets from landfills and reducing costs associated with tipping fees. It uses a Schutte horizontal grinder and a Morbark tub grinder to produce uniformly sized, clean wood fiber. The Schutte grinder is 12 years old and “runs like a top,” said Mac; it has proven to be very durable. Large magnets extract scrap nail fragments that are collected and sold to a metal recycler. The wood fiber is sold to several markets, including livestock bedding and boiler fuel. Pallet Resource also produces and sells colored mulch, which it markets under the name Designer Wood, and a government certified, engineered wood fiber safety surface for covering playgrounds, which it named Kid Cushion. Neal is responsible for sales of mulch and Kid Cushion. The two most popular mulch colors for Pallet Resource customers are red and brown. “We use Wood ’n’ Colors and their coloring machine,” Mac said. “It does a really great job.” (Editors’s Note: Wood ’n’ Colors was acquired recently by Becker Underwood.) Pallet Resource has six truck drivers and also uses four tractor-trailer owner-operators. The company leases three tractors and three trucks and owns about 120 trailer vans and 20 flatbed trailers. “Butch Tysinger, our dispatcher, does an exceptional job of keeping the trucks rolling and delivering for the customer,” Mac said. The company has a relatively stable work force. About a third of the crew has five years or more of service and another third, about three years. The remaining workers have less. The company employs a considerable number of Hispanic workers. “They are diligent, hard-working – they do a super job,” said Mac. After graduating from Davidson College, Mac served in the Army for six years. “I would have made it a career,” Mac said, “but the business had grown to the extent that Neal needed some help.” He is still active in the National Guard, which takes up much of his free time. Mac is married, and he and his wife have three dogs. Neal has served previously as president of the National Wooden Pallet and Container Association. “It definitely took a lot of time,” said Mac, “but I think it had a positive influence on our business through his contacts with people and working with the association.” Neal and the company benefitted from the association’s educational programs as well as the many opportunities through the trade group to network with other professionals in the pallet industry — sharing and exchanging helpful information, ideas and tips with other pallet company owners and managers. “We are blessed to have a strong, capable leadership team,” said Mac, who pointed out that the company’s managers worked their way up from the cut-up and pallet repair or manufacturing operations. “They’re enthusiastic, optimistic, not afraid to get dirty with the employees, and they know how to coach and motivate the workers to get the most productivity. Their leadership is reflected in their departments, allowing them to accomplish more than the science of management says is possible.” “Take Ricky Lankford, our plant manager, for instance,” Mac said. “Despite how many crises are brewing, Ricky always maintains his cool and keeps attacking them until the job is done. He recognizes and rewards good work and resolves conflicts before things get out of hand.” Mac also singled out the leadership of Joel Rodgriquez in the repair department, Celerino “Taco” Arzate in sorting, and maintenance supervisor Sam Hilton. Mac detests management fads, but he admitted to having one management maxim hung on the wall in his office, a saying he credited to Roderick Wetherill, an Army field artilleryman: ‘The amateur makes the difficult impossible while the professional makes the difficult routine.’ “I’m grateful I work with professionals,” Mac said.
