There was a day when pallets were a necessary cost center in distribution center operations. Goods arrived on pallets, and once unloaded, the most managers could ask was for those wooden pallets to be out of the way. They were tossed, trashed, given away, and sometimes reused. Some might have even been used for pallet art (like this highly functional furniture, for example).
However, these are not those days. Fueled by streamlining measures during the Great Recession, DCs started looking for ways not only to cut costs, but also to extract value from operational processes. Savvy retailers saw an opportunity in pallets. Not for pallet art – but instead for an art to pallet management.
The science of pallet management
On the surface, pallet management seems pretty self-explanatory. It’s management of your pallets, right? But every distribution center and warehouse operates differently. As a result, a generic, one-size-fits-all approach to managing the flow of pallets won’t cut it. Each DC and facility needs its own tailored program – which is why pallet management is as much art as science.
At its core, pallet management is the science of coordinating the inflow and outflow of pallets. That includes pallet delivery and pallet pickup. However, the source and ownership of incoming pallets can vary greatly. That means the pallets must also be sorted. Some may be owned by pallet poolers, which mean they will need to be delivered back to a certain location for the pooler to retrieve them.
There’s also the added wrinkle of reusable plastic containers, which have become commonplace in today’s push for more sustainable supply chains. Many traditional pallet poolers don’t process those, which leaves container management as another item for the DC to deal with.
All these variables create a dilemma for the distribution center. The DC and its labor force are focused on handling and forwarding the retailer’s merchandise, not on processing pallets. As the demands of omnichannel retail tax the efficiency of DC operations, extracting the potential value in all those pallets requires a symphonic balance of many moving elements. It requires the art of pallet management.
The art of pallet management
Total pallet management – maximizing efficiency and optimizing value – requires more than teaming up with a pallet pooler. A pooler may get you part of the way there, but in reality that’s merely a frame for the artwork. The art only happens by first fully understanding your pallet flow – the delivery, the processing and the pickup. That can’t happen without visibility into what’s arriving to and departing from your facility. How many pallets are there? Who owns them? Where are they coming from and where are they going?
This level of data is great, but virtually useless without the tools and mechanisms to utilize it. Customized software and tech solutions can organize and crunch this data, revealing the beneficial efficiencies.
Next up is knowing where to place the art on the canvas. This means having knowledge of the market landscape. Without substantial experience in pallet recycling, pooling, delivery and pickup, you might not know if you’re getting the best arrangements from poolers and recyclers. Understanding how pallet recyclers and poolers work and how companies try to shift terms in their favor can ensure you negotiate the best agreements for your pallet management plan.
Creating a masterpiece
Generally, art is quite subjective. Its beauty is in the eye of the beholder, as they say. However, the art of pallet management is actually very objective. Pallet management can appear to be a fractional part of your supply chain solutions, yet it can have an outsized impact on the thinly sliced margins of a warehouse or distribution center. Thus, artful pallet processing can lead to tangible ROI, which creates a masterpiece that is beautiful to all.