FORT SMITH, Arkansas — Phil White knows a thing or two about the bakery business. After all, he started one from scratch and successfully built it into a business with 200 employees before selling it to a national company.
He went from the bakery industry to the pallet industry. He did a little research on the pallet industry, but not much, before making the decision to buy a pallet manufacturing company. He found similarities in the industries, he said. They both deal with ingredients or raw materials, equipment and manufacturing processes, employees, and customers.
“I just looked at their income statements,” said White, 64. “This is a helluva lot easier than running a bakery, I can tell you that.”
White has now been in the pallet industry — as General Pallets — for 20 years. He has grown his business organically, developing more customers, and also by acquisitions. A year ago he consolidated three facilities into a single, spacious building — a former furniture factory — in Fort Smith in northwest Arkansas. About 70-plus employees work at the 200,000-square-foot plant, which is located on five acres.
His customers include PECO Pallet, a pallet pooling company known for its distinctive red block-style rental pallets. General Pallets has been producing new pallets for PECO for five years and began providing a depot service to PECO when it moved into its new plant.
A key supplier for White has been Viper Industrial Products, which sells collated and bulk nails and fasteners as well as its own brand of pneumatic coil nailing tools and the Woodpecker line of pallet nailing machines.
Viper Helps General Pallets Improve Its Operations
White has been doing business with Todd Mazur, owner and president of Viper Industrial Products, for 20 years. “He’s the only person I’ve ever bought nails from,” he said. Mazur represented Stanley-Bostitch before founding Viper in 2009.
Viper Industrial Products supplies all the company’s pneumatic nailing tools and nails. A technician visits the plant weekly to service all the nailing tools. “He’s been a great partner,” said White. “They take care of us.”
“We provide them with a vendor-managed inventory process,” said Mazur. “We manage their inventory. We provide just-in-time delivery on the fasteners, which helps them be more efficient. He can keep his inventory levels down.”
Arkansas-based Viper Industrial Products is the exclusive sales representative for the manufacturer of Woodpecker pallet nailing machines and also has been developing the first nailing machine that will be marketed under the Viper brand name. The company also sells the Viper brand of pneumatic coil nailing tools and collated and bulk nails and fasteners for the pallet and container industry. Viper also supplies blades for bandsaw dismantling machines and for resawing. (For more information on Viper, visit www.viperindustrialproducts.com.)
When White began considering investing in a machine to build the PECO block pallets about five years ago, Mazur suggested talking to the folks at Woodpecker, saying, “I think we can build this for you.”
“They special-built it for me,” said White “It’s been a great machine.” The machine uses pneumatic nailing tools and collated nails and has two nailing stations, assembling the bottom face of the pallet first, then flipping the pallet over and advancing it to the next nailing station so the top face can be assembled. Finished pallets are stacked automatically. Four workers generally operate the machine and feed it material.
The Woodpecker costs considerably less than some other nailing machines, noted White. Since it uses pneumatic nailers, maintenance is simple and more affordable, he added. “I’d buy more of them,” he said.
General Pallets is equipped with five other nailing machines from Rayco Industries. The first pallet company he purchased had two of the Rayco machines, and White added more as his business grew. Like the Woodpecker machines, his Rayco pallet nailing machines also use pneumatic nailing tools and collated nails.
The company also has ten work stations where employees assemble pallets by hand with pneumatic nailing tools.
Operational Overview – Diversification Is Key
About 90% of General Pallet’s revenues are generated from sales of pallets and the remainder from sales of wood crates and containers. The company produces about five truckloads of new pallets per day. Plus, it processes and inspects PECO pallets daily as a depot, where about eight employees inspect those pallets and refurbish those that need repair.
One of the most common pallet sizes the company manufactures is the 48×40 footprint. Also, many customers require custom or specialty pallets. White estimated that the company makes about 60-70 different pallet types and footprints. For example, one customer may have two sizes that account for about 75% of the pallets it needs, and the other 25% may be made of up to 10 other pallet sizes.
General Pallets has customers that manufacture plastic containers, electric motors, industrial batteries, steel wire products, agricultural products and paper goods. Most customers are within a 150-mile radius. “I think we’re well diversified,” commented White.
“I think diversification is an important part of our success,” he added. In any given years, business may be off for one or several customers, and they will require fewer pallets. “But the other ones are in a growth phase. We lose business, and we gain business.”
Tight Lumber Control Maintains Quality
White buys strictly kiln-dried southern yellow pine lumber for pallets. (He used to buy some hardwood material, but he sold off that part of his business just recently.) He also buys plywood and oriented strand board.
He buys 2×4, 2×6, 2×8 and 4×4 and 4×6 southern yellow pine in lengths ranging from 4 to 14 feet; the 4×6 material is for the block pallet line. White buys No. 3 lumber and better grade lumber. He noted that most pallet companies by a lower grade, No. 4. He sources lumber from mills in Arkansas, Alabama, Mississippi and Texas.
White requires all incoming deliveries of lumber to be covered with a tarp, rain or shine, and all unloading is done at an indoor dock, and the lumber is stored inside. “That sets me apart,” said White, from other pallet companies. His employees also check the moisture content of every load of lumber to ensure it has been kiln-dried to 19% moisture content or below. The reason White takes for these measures it to prevent mold and mildew. “We don’t have a mold problem,” he said.
The plant is equipped with well-known brands of machinery for remanufacturing lumber into pallet components. A Holtec package saw is used extensively for cutting material to length. “The package saw cuts all day long,” explained White. “It never stops.” The plant also is equipped with three Brewer multi-trim saws for cutting to length: a five-head, four-head, and three-head multi-trim.
For resawing material into deck boards or stringers the options include a Pendu gang saw and an assortment of Baker Products horizontal bandsaws: a four-head line, a two-head, and four single head bandsaws.
The company also has a custom-made vertical bandsaw “for cutting anything,” said White, and panel saws for cutting plywood and oriented strand board.
General Pallets Production Process
PECO pallets are painted a distinctive red, and General Pallets is equipped with an enclosed line of equipment to paint them a stack at a time, move them into a chamber to dry the paint quickly, and then have them stenciled, ready for shipment. The system was shop-built by the company’s maintenance department.
White has a few options for his rejected wood material, some of which is cut to smaller length by a pair of two-head trim saws. The maintenance staff built a grinder that converts some scrap material into mulch that is sold wholesale. The same crew also made a shop-built shaving mill that processes some scrap to wood shavings that are supplied for horses. Sawdust is supplied to a company that uses it as a raw material to produce an industrial product to absorb spilled liquids.
General Pallets is equipped with a few semi-tractors and trailers; it has a two-full time drivers and one part-time. The company also uses trucking contractors for a lot of hauls. PECO provides its own transportation for delivering pallet to the depot and picking up new pallets.
Personnel Management Strategy Focuses on Getting the Right People
When White moved the company into its new building, he instituted a drug-free workplace policy. Every new employee has to pass a drug test, and the company also conducts random drug testing every 90 days. “It’s a firm policy,” stated White. “That’s something different about us.”
The policy has contributed to improved employee attendance, performance, and attitude, according to White. “I saw a difference.”
The company previously required a drug test before hiring but not the random tests. The previous policy “wasn’t monitored or adhered to,” said White. When the company moved into its new plant, he decided to “enforce it and stand behind it. And I’ve seen the results.”
Employees get group health insurance and may participate in a 401(k) retirement plan. They also receive paid holidays and vacation time after six months.
Some employees have been with the company (or its predecessor) more than 20 year or even 30 years. The foreman over four departments each came from a predecessor pallet company. “They’re good people,” said White. “We have a good relationship.”
White oversees the business and has some administrative duties, although he has other staff that handle sales, finances, and other aspects of management. One important responsibility he has is purchasing all lumber for raw material and nails. He also interviews all job candidates and makes the hiring decisions. He is still accessible to customers, though. “I’ll deal with any customer who calls me,” suggested White.
Hands on management is key. White has a window in his office that allows him to see inside the plant, but he’s not confined to his office. “I walk the floor every day and put my eyeballs on it.”
“My motto is: Work hard, have fun, but be nice,” said White. His motto is painted on a sign outside his office door, facing the plant.
A member of the National Wooden Pallet and Container Association, White enjoys going on scuba diving trips with his wife to the Caribbean a few times a year, a hobby he has enjoyed more than 20 years.
His company’s reputation is a big reason for its success, he said. In fact, he has never had a sales representative for the business until just recently. “I’ve done what I said I would do” for customers, White explained. “And given them quality and service. Word gets around in a region like this.” The best way to grow sales, he said: “Do a good job, and do what you say.”
“I tell customers, ‘I don’t want to be the cheapest, and I don’t want to be the highest, either…I’ll take care of you.’ “
The company’s business has been steady, even after the economic downturn that began in 2009-10. “I didn’t really see a downturn…We’ve always been busy.”
White launched his bakery business in 1987. The company manufactured crackers and cookies. It had a niche business, a contract with the Department of Defense to supply crackers for Meals-Ready-to-Eat for the military.
In the bakery business, White learned to comply with government regulations for sanitation and safety, among other things. “We were forced by our government contract to run a tight ship,” he said. He applied those principles to his pallet company. “We have a clean shop,” he said.
When he sold his bakery company, “I needed something to do, and I found a little pallet company for sale, so I bought it.” The company he purchased, located in Fort Smith, had about 12 employees and manufactured new pallets. He bought his second pallet about 10 years ago, and added two others about eight years ago and five years ago.
Consolidation and Plant Layout Improvement
White was actually considering retiring before he made the decision to consolidate all his locations in one facility. “I was kind of burned out,” he said. “I wanted a challenge.” The challenge for him was to put together what he considered a great pallet company. The previous plants “were not great” facilities, he said. They were contained in buildings that were not suited for pallet manufacturing and consequently had numerous bottlenecks.
“When I found this old furniture plant, I thought, ‘I have the opportunity to set it up right and get rid of all the bottlenecks.’ It was like a challenge. I laid out the plan.” He went over the plan with his maintenance department. “I set a goal, and we met it,” declared White. The maintenance staff worked 10-11 hour days for nine weeks to get the new plant ready. “It’s a beautiful facility,” said White.
Rethinking the plant layout made all the difference for General Pallet. What can a new piece of equipment or improved layout do for your operations? For more information on Viper and its nail products as well as the Woodpecker line of nailing machines visit www.viperindustrialproducts.com or call 501-679-6814.
