Bowling Green, Kentucky
I had the privilege of first visiting and featuring Glenn Atkinson at Southland Manufacturing back in 1994. Then in 2000 we featured Southland’s colored mulch system. It is always a pleasure to return to a good pallet company and see how much things have advanced. In this case, it was also a pleasure to see how Glenn’s people centered management philosophy has maintained its course over time.
In 1988, Glenn brought his accounting background to Southland Manufacturing when he purchased the company, which dated back to 1967. Glenn combined his significant accounting aptitude with his entrepreneurial drive and understanding of caring for and managing people. During his tenure, the company has expanded from just seven to ten loads of pallets a week to well over 30 loads a week today. In addition, Southland uses its heat treating capacity to service a number of other pallet companies in his geographic region.
Like most pallet companies, Southland has changed its operations to match the altering needs of customers and varying technology options. Five things stand out to me as adjustments that Glenn and his people have made to maintain Southland’s position as a respected pallet manufacturer and supplier of unit load services.
During my first visit, the company was struggling to make its scragg mill productive and profitable. Glenn eventually sold the scragg mill because it was too far away (about 60 miles) to manage efficiently and he learned that his lack of logging experience made it difficult to rely upon outside loggers. Scaling practices and the lack of hands-on management stood in the way of an economical scragg mill. Ask just about anybody in the pallet industry; they will tell you how important it is to understand any unique elements of a manufacturing operation and to keep hands-on control. Pallet manufacturing, pallet recycling, and sawmilling are related but they are also unique. Dealing with logs and loggers is a significantly different challenge. Dealing with core supplies and recycling challenges is different as well.
This visit took me to a relatively new location; the company moved early in 2001 to a 105,000 sq. ft. building on 12 acres. While the building was not new, Glenn pointed out that he could not have designed a building to be much more suitable to Southland’s needs. One side of the building is used to hold finished goods inventory, cut to size lumber inventory, and two heat treating chambers. On the other side, lumber comes into the building on one end where there are three recessed trailer bays for unloading cut stock. Material moves efficiently through the phases of manufacturing up to the two recessed shipping docks at the other end. Pallets are loaded directly onto flat beds in the two recessed trailer bays or into van trailers on three other docks. A 100 year flood plain separates the plant from neighboring developments. While flooding has never been an issue, it does serve as a buffer zone.
Glenn has made a major change in the company’s manufacturing practices to keep costs under control. Certainly one of the most important aspects of pallet manufacturing is in cutting pallet stock. Attention must be placed on lumber quality, manufacturing efficiency, and particularly recovery. Southland got rid of the scragg mill because it did not fit these requirements. It still runs a Brewer gangsaw line to saw thicker stringers and decking. Glenn wondered if he could find a bandsaw system that does not require the maintenance attention of wide bands but avoids the problems often associated with the 1” and 1-1/4” bands. As much as possible, Glenn wanted to combine the benefits of gang sawing with those of thin-kerf bands. He contacted the people at Brewco, who are conveniently located in western Kentucky and have introduced their new 2” B-800 bandsaw system. Brewco designed its patented guide for the grade hardwood industry but has recently modified it to efficiently cut pallet lumber with minimal kerf and no dust problems.
A fourth major change was obvious when I entered the yard. Southland has developed its Mighty Mulch line of colored mulch (2000 Pallet Enterprise). This new product has virtually eliminated any manufacturing waste fiber and added a profit center that has expanded the company’s product line.
Two heat treating chambers represent a fifth change that Southland has made to provide better products and services, while adding to the bottom line. While Southland manufactures between 15,000 and 20,000 or more pallets a week, it heat treats about 14,000 to 15,000 pallets a week. In addition to treating many of its own pallets, the company heat treats pallets for a number of other pallet companies.
Southland built its own heat treating chambers. The smaller one will treat about 600 standard sized pallets, and the larger one will hold about 2000. It used freezer wall design technology for its chambers. Glenn is familiar with freezers through his experiences with the grocery industry. He worked with consultants who designed Southland’s heat treatment chambers using galvanized metal with 3” insulation. It fires the chambers with a Temp Air natural gas fired heating system. Southland’s heat treating chambers are designed to circulate the warm air back to the intake where fresh incoming air is heated. This helps reduce the volume of natural gas required to supply hot air to the chambers. The chambers are rated to handle 185 degree air temperatures, which it does not exceed.
New Brewco B-800 System Supplies Lumber Manufacturing Needs
As Southland’s customer needs changed, so did the company’s lumber needs. Southland purchases about 65% of its lumber in cant form and buys the other 35% from cut stock suppliers. It would probably buy more precut if local suppliers could gain better control over the dust on their material.
In particular, Southland needed a dependable supply of pallet stock with the thin kerf savings of bandsaws, without the sawdust problems often association with 1” and 1-1/4” horizontal bandsaw systems. Southland wanted better control over lumber thickness than that of conventional horizontal bandsaw systems but without the hassles typically associated with wider bands and circular saws. It sounded like a tall order. Glenn contacted Brad Ginsburg, a good friend of his at Brewco, and discussed his needs. Brad indicated that the new Brewco B-800 was his answer.
Less than a year ago, Brewco purchased G-Tek’s machinery line and added Brad Ginsburg and David Greenwood to its management/sales force. Glenn discussed his needs with Brad. Brewco had applied the same technology to pallet lumber manufacturing in its B-800 system that it had put into its B-1600 Grade Run-Around System. Southland’s needs and Brewco’s technology fit is outlined here.
Glenn wanted solid production efficiency numbers, dust free lumber, and higher quality lumber than that typically associated with horizontal thin-kerf bandsaw systems. But he wanted the thin-kerf that bandsaws can offer. Brewco’s answer was based around its patented floating guide system that self-adjusts to the width of each cant and its patented de-duster that removes the fine sawdust from between the boards.
Bandsaws helped Southland reduce kerf but avoid the costly maintenance associated with wide bands. One employee runs the Brewco system half the day and handles sharpening duties in-house the other half day, while another operator controls the Brewco system for the second shift.
Everybody is familiar with the fine dust generated by thin-kerf 1” and 1-1/4” bands. The 2” band used by Brewco has 0.082” inch kerf. The blades are designed to last longer and require sharpening less often. Glenn stated, “Our yields (lower quality, unusable lumber) had been running close to 10% loss with our previous gang system, but now our bandsaw loss is about 1%. We save close to a tractor trailer of cants a week versus our old system.”
Southland still cuts most of its 3×4 and 4×4 cants on its Brewer gang into 1-3/8” stringers and heavier deck boards, where the kerf gain is not as important as it is with thinner boards. It cuts its 7/16” decking and 1-1/8” stringers, which have become a major portion of its lumber needs, on its new Brewco B-800. Using its new system, Southland gains one or two more 7/16” boards per cant and one 1-1/8” stringer per cant.
The patented floating guide and de-duster are the keys to the Brewco system. The floating guide uses a spring to self-adjust and press the guide arm against the cant, keeping the cant pinned between the guide and the fence. The guides are mounted on the fence and floating guide arm so that the blade goes through one guide, directly into the wood, and exits directly through the other guide. The lack of space between the wood and the guides gives more control over the blade to eliminate any tendency for wavy blades that is often associated with the thinner blades. Glenn says that it has improved his control over board thickness and quality. An automatic band tensioning system keeps the proper tension on the band.
The built-in deduster directs a stream of air directly on the cut, which moves the fine dust more thoroughly through the cut. The combined result of the 2” band, floating guide system, and built-in de-duster system is kerf savings for better yield, increased blade life, and straighter cuts.
Morris Deel, plant manager, stated, “Our new system will do everything that Brewco said it would. We predicted our blade costs and volume increases from the numbers supplied by Brewco. These predictions have been extremely close, much better than often expected with a new system. We use Eureka and U-Cut blades. The blades cost more but our overall blade costs are what we had hoped for.”
A Brewco softride unscrambler and G-series 2000 twin cutoff saw help complete the B-800 line. Glenn said, “I am particularly pleased with the professional manner in which the Brewco people handled our installation and problems. They have been professional, knowledgeable, and helpful. They solved any problems that arose, such as getting the dust system to fit our needs.”
Southland still buys its circular gangsaw blades from Eureka. It uses Profile Technology cutters for the sizers in its gang and bandsaw lines, as well as its notcher.
Glenn said, “We are happy with our new Brewco saw line. Our band costs are what we had hoped for. Our labor costs are a little higher than they could have been because we chose to go with a four head resaw system. If we add more heads as I plan to do in the future, we can reduce the number of trips that a cant makes through the system, which will increase our productivity numbers. Our lower productivity volume is also impacted by having a high number of changeovers to fit our particular customer mix.”
Pallet Manufacturing Machinery
Southland manufactures about 80% of its dollar volume of pallets on its older 1984 Viking Duomax and the Turbo 505 that it bought shortly before its plant move. It builds most of them on the Turbo 505. It runs both its sawing and nailing lines two shifts. Southland uses Mid Continent Nail drive screw nails in its Viking machines.
It does the remaining 20% of its nailing on tables, using Stanley Bostitch hand nailers and collated nails.
The company uses a Pendu stacker and a Brewer stacker to eliminate much of the hard labor required when stacking lumber. This reduces the amount of labor and improves the company’s safety performance.
Southland uses a West Plains notcher. While its customer mix does not use that many chamfered pallets, it uses an older Hazledine chamfering machine for this operation. Profile Technology cutters are used in these machines.
Morris was quick to say that they are happy with all of their major suppliers. They have chosen to work with established, recognized machinery and service suppliers. The last thing the company wants is unnecessary downtime because they put too much faith in the wrong suppliers.
Focus on People
Like so many pallet companies, Southland saw its customer base seriously impacted by 9-11. Its workforce dropped to around 35 people at that time when it lost a major customer that moved its manufacturing facilities out of the country. Its labor force has expanded to about 45 in the last couple of years. Glenn now employs 38 Hispanic workers, and he indicates that he has virtually no labor problems.
Like many pallet companies, Southland has hired Hispanics because they have become a dependable labor source for lower skilled jobs in his region. Most of the non-Hispanic workers have worked for Southland since before Glenn bought the company. The afternoon of our visit the Southland management team was meeting to discuss the government’s new direction relative to handling I-9 forms and how to properly document what the government is requiring. Glenn believes that he needs to treat his people well and still do what is proper as far as government regulations. He is using the guidelines and information that we published in our Pallet Profile as a guide for Southland’s decisions and actions. When asked about how our country should handle the illegal immigrant problem, Glenn responded the way that many pallet company owners probably would. He stated, “I believe those already in the country should be given a chance to admit to being illegal without any punishment. A path to becoming a citizen should be available.” He agreed that closing the border is a necessary step to solve the problem.
Business has been very good, the best he can ever remember. So, when his Hispanic employees came to him wanting off on Monday, May 1, to participate in the Hispanic marches and celebrations, Glenn worked out a way for them to work, keeping products flowing, and still have the day off they desired. This kind of cooperative arrangement is what helps the company develop relationships with both its employees and its customers.
It is all about people. Nothing happens without them. Glenn said, “We are proud of our employees. They are flexible and make everything that I request. If it is made from wood and is used for shipping and storing, we are willing to make it.”
Morris Deel, plant manager, reinforced Glenn’s remarks when he stated, “To get new customers and new business in today’s market, it helps to do it all. If you can take care of any wooden packaging need a customer has, you are a more valuable supplier.”
Southland is an ESOP (employee stock option program) company. The labor force is stable. Last year Southland processed only 50 W2 forms, and its daily work force at the time was about 35 people. The company has had only one lost time accident in the last seven to eight years. Southland gives a bonus every two months if there are no loss time accidents. The workman’s comp experience rate is way down, which benefits every aspect of the company.
Southland Manufacturing has participated in OSHA’s voluntary inspection program. Glenn said, “I have found OSHA to be very reasonable in cooperating with this voluntary program. If an inspector makes a surprise inspection, he will leave when shown that we have a scheduled voluntary visit planned. Before we moved into our new building, we had them make a planned inspection of the facility. They made a very helpful survey that helped us make decisions about our new electrical services.”
Adjusting to Marketing Changes
Southland has always catered to his customers’ needs. The company manufactures many pallet sizes and quantities but avoids competing heavily in the high volume pallet market. One of Southland’s largest customers serves as an example of the kind of service it provides. This customer buys over 100 different pallets and related wood items. Once or twice a day Southland gets an inventory count from the yard man, so it can build the products needed without the customer formerly placing an order. Southland delivers products as needed to that customer five to seven times a week.
Strolling through the Southland yard and building, one can easily see the large amount of precut lumber and finished goods inventories that are stored. The variety of sizes, custom needs, and unusual specifications is more extensive than one expects to see in a pallet company. Most cants are stored on the yard, as well as some finished pallets, particularly block pallets. Precut stringers and deck boards and finished special parts are stored inside, as well as many finished pallets to meet unique customer specifications. Very few pallet companies combine Southland’s production volumes with such a wide variety of sizes and specifications. Pallet companies that cater to such varied customer needs are often smaller. So, Southland combines nicely the efficiencies from good volumes with the hand holding quality of true customer service.
Southland’s complete product mix includes over 1200 items for 50 to 60 customers. During my visit, the company was manufacturing on its Viking Turbo 505 a pallet that uses plywood decking strips on both its top and bottom. One trailer must have had at least six or eight different products on it ready for delivery. One pallet in inventory, one of the most unusual I have ever seen, included blocks, thin stringers, and large 4×4 stringers.
Mighty Mulch Expands
Market Opportunities
In November 2000 the Pallet Enterprise carried an article about Southland’s new Mighty Mulch product line, which it developed in the late 1990s. The company now sells over 300 tractor trailers (about 30,000 cu.yd.) full of colored mulch a year. It sells retail in virtually any quantity requested, either picked up at the plant or delivered to a customer. Its list of Mighty Mulch distributors is constantly growing; several more distributors have been added since Southland updated its web site listing.
Becker Underwood’s colors give Southland’s customers a wide selection of choices; Southland uses both Becker Underwood coloring machinery and its colorants. The company promotes a variety of mulch benefits, including vivid colors, no pest or insects, safe and odorless, no fungus or mold, and longer lasting than most mulches. Southland stores most of its mulch in its natural form. It prefers to color as much mulch as possible shortly before it is sold to keep down the quantity of colored mulch stored and keep the colors as fresh as possible.
A coloring system is not complete without a good grinder that serves a customer’s needs. Southland uses a Rotochopper. Glenn has been happy with his choice, happy enough that he is ordering another Rotochopper for his expansion. One of the things that has attracted him to Rotochopper is its ability to grind blocks and scrap cant ends, as well as used pallets. Manufacturing scrap and undesirable used pallets are fiber sources to generate the 300 trailers of mulch annually. Southland can separate its ground pallets from ground wood fiber to satisfy customer requirements when needed. The company recycles so much of its wood fiber into useable mulch that one normal size dumpster of trash and waste a week is sufficient for all the company’s trash removal.
Southland has avoided the pallet recycling business, partly because it is very labor intensive and doesn’t fit real well with Glenn’s emphasis on management control and neat facilities. Recycling tends to be very owner hands-on, and he already has a number of established recyclers around him.
Southland takes back used pallets from his customers as a service. Those that can be resold without repairs, it will sell. The company can buy used pallets from local recyclers to meet customer needs; it has relationships to get pallets repaired.
