Pallets are simply a form of product packaging that make it possible to move products with forklift trucks. However, while products and product packaging make a one-way journey, pallets are capable of making a two-way journey; they can go from manufacturer to retailer, then back to the manufacturer for reuse. In order to reuse pallets in their inventory, companies should be able to arrange for the following to be implemented:
Recovery: The return trip a pallet must make to the manufacturer in order to be reused effectively doubles the transportation required to keep the supply chain running. Perhaps the bigger challenge, however, is the administrative work involved in keeping track of how many pallets are in each location and when enough pallets have accumulated at a location to make it worth sending a truck for retrieval.
Sorting: Once pallets have been returned to the warehouse or distribution center, the ones that are damaged will need to be sorted from the ones that are still fit for use as-is. Damaged pallets will need to be further sorted to separate ones that can be repaired from those that are too damaged to be used again.
Repair: Damaged pallets that can be salvaged will need to be repaired either by swapping out broken boards or by adding reinforcement. While this isn’t a complicated task, it requires employees who possess skills in the safe use of tools as well as appropriate wages, equipment, and a facility for doing the work.
Storage: Pallets are bulky, which means that safe idle pallet storage requires a large amount of space at production facilities or a separate storage area with transportation to bring pallets to where they will be used.
Disposal: Pallets that are damaged beyond repair must be properly disposed of. Typically, pallets at the end of their useful life are taken to the local landfill where dumping fees are based on weight. For an additional labor cost, nails and screws can be removed from the pallets and they can be ground up and used as mulch or wood filler.
In an internal pallet pool, pallets effectively become additional products requiring dedicated transportation and maintenance facilities.
The steps above demonstrate just how significant the costs of managing a pallet inventory can be. In an internal company pallet pool, pallets effectively become additional products requiring dedicated transportation and maintenance facilities. Providing these services is a large investment in both time and money that only companies that move huge volumes of products nationwide usually have the facilities to undertake. As a result, many companies continue to rely on stringer pallets, which are used once and discarded, ultimately wasting resources as well as money. The solution for many businesses is to contract with a specialized pallet pooling service that manages pallet inventory for them.