Going back to its infancy during and after WWII, pallets were the platform for change in materials handling. In today’s high tech world, it is interesting to consider that something as simple as a wooden pallet could still bring about a revolution in cost savings and efficiency. Unfortunately, most pallet users tend to see pallets as a necessary evil. Hemmed in by years of experience (walls), few people realize the full potential of transport packaging, especially pallets. A recent article about General Mills caught my attention. Desiring to cut costs, the food manufacturing giant looked to significantly reduce conversion time for a California production line. General Mills successfully reduced the time it took to convert a line between two products from 2-1/2 to 4-1/2 hours down to an average of 12 minutes. According to Randy Darcy, General Mills’ senior vice president of supply chain operations, the company hopes to save $800 million over the next ten years by cutting changeover time. How did the company achieve this significant changeover savings? It looked outside of its current field of vision and consulted a team known for having perfected rapid changeover– a Winston Cup pit crew. These professionals make it look easy to change four tires and refuel a car in 14 seconds or less. And they knew how to help General Mills eliminate unnecessary steps and make processes more efficient. The typical racing pit crew has a number of highly skilled, specialized workers operating in a fast-paced, dangerous environment where life and death is on the line. From the jack man to tire changers to the gas man, each team member practices his role spending hours in training and preparation. Although you may not be able to find employees willing to work as hard as a pit crew, taking a few lessons from them can improve your production processes. One tip that General Mills learned by working with a pit crew was to videotape each changeover and then critique every step. Darcy estimated that 80% of the savings available in the supply chain, which includes all of the processes necessary to produce and deliver the company’s breakfast products to customers, comes from innovation. He believes that only 20% of savings will come from belt-tightening measures such as closing plants, laying off employees and eliminating duplication. What does this have to do with the pallet industry? In this competitive market, there are a few ways to improve profitability – become more efficient, grow your current business, develop new products/services or expand your customer base. Most entrepreneurs find themselves surrounded by walls created through years of experience. Sometimes it takes an outsider to provide a fresh perspective. You can apply this concept to your business in a couple of ways. First, you can find non-competitive businesses in your area to use as benchmarks. Then consider applying what you learn in your own plant. Second, you can jump over the walls in the industry to find a way to take advantage of the coming changes in supply chain management. Pallets have been the platform for change in the movement and storage of goods for over 60 years. While the unit load concept might not see huge technological strides in its basic concept, the execution of improved palletization and pallet management promises significant growth for the future. Just what exactly does this mean for you? Nobody seems to know for sure. But the pioneers who develop or jump on the next big thing may carve out a profitable niche. With the emergence of tracking technology and other efforts to improve the supply chain, the pallet could well be the platform for change in the future logistics world. In racing terminology, the pit crew is described as “working over the wall” when a car takes a pit stop. What are the walls to your current business? Stop and consider how you can think over the wall and retool your business future.
