One of the crucial mistakes in pallet methodology at many companies is the theory of trying to cheapen the pallet to save money. To save money in your pallet operation, don’t think that a cheaper pallet necessarily translates to cheaper pallet costs. You have to think bigger. Your pallet operation is more than simply purchasing the pallet. You should have a goal of trying to reduce the costs of each pallet trip. What’s a pallet trip? Let me explain with the help of a denim analogy.
Have you ever purchased cheap jeans before? I remember in college, a new store opened up that everyone flipped out about. For the sake of this story, I won’t mention the name, but let’s just say they make cheap clothing that looks great..at first. I remember one of my friends telling me…”you can buy a pair of jeans for $20”. This sounded awesome to me. I went down to the store, purchased 4 pairs and went home like I was the smartest guy on campus. However, there was only one problem; the jeans only lasted about 6 months before the seam came apart. Years later, my wife convinced me that I needed a new pair of some trendy jeans. The purchase price was over $110 which didn’t sit well with me, but I was willing to give them a try due to my frustration with cheaper jeans. It’s been over 5 years since I purchased the trendy pair. They still look new and the fascinating thing is they are now my favorite pair to wear.
Putting the cheaper jeans and the trendy jeans side by side, let’s do a quick analysis. Let’s call each time I wore each pair a trip and for arguments sake, let’s say I wore each pair once a week. For the cheaper jeans, that would add up to 25 trips, which puts it at $1 a trip ($25 purchase price divided by 25 trips). You tell me, which was a lower “trip” cost? For the better built, trendy jeans...the math equates out to $110 divided by 260 trips, so that would put it at .42/trip (so far, I’m still wearing them!)
Now I know that jeans are not pallets and pallets are not jeans, but you get the point. Spend a few dollars more, upgrade your pallet and lower your trip costs. In the first blog post of this series, I made light of how our office would get a kick out of when our customers would ask us to build a better pallet at a 10% reduction in cost. Achieving that goal is attainable when you think beyond the pallet purchase price and see the big picture.
So, how do you invest in a better pallet? A good pallet supplier can do that for you. Take a look at the National Wooden Pallet and Container Association’s (NWPCA) website and do a search for a member in your area. I’m pretty sure they will be more than happy to examine your current pallet and offer suggestions on how to increase the durability. Ask them about the grade of lumber, what your options are for upgrading it and would that help you? Ask them what the cost difference would be? Do you need to use all of the deck boards that you are currently using? Can you reduce it without impacting the durability?
In the next blog post, we will take a look at the weight of the pallet and product that I asked you to calculate in Part 1. How can you use it to your advantage? I’ll show you.