Are your pallet partners cheating on you? (page 3)

-- Logistics Management, 2/1/2005

Page 3 of 3

Value the people

No matter what kind of tools or policies you put into place, the success of your pallet control initiative depends on how well it's administered by your front line employees—the men and women on your dock, in your distribution center, and driving your trucks.

Getting their support involves getting employees to value the pallet itself as much as they value what's on the pallet, says Cheng. His suggestion: "Go into a presentation with forty $20 bills, throw them down on the table, and ask, 'Would you leave that in the back of a truck overnight and expect it to be there the next day?' "

By the same token, your pallet control program will be more successful if you value the people who administer it. Too many companies see the pallet administrator position as a dead-end or entry-level job, even though it can be a first step toward a customer service or sales position—or beyond. Junkin, for example, says pallet administrators she hired when she worked for a major food manufacturer went on to manage warehouses. Richardson knows former pallet clerks who have risen to become directors of inventory management.

Finally, recognize that managing pallets isn't easy. A pallet administrator who must call delinquent pallet partners (often your valued customers) needs to be as much a diplomat as an accountant. "I firmly believe that this is the most underrated position," Junkin says. "It often gets delegated down to the lowest of the low, and then we wonder why we're not successful."

Successful pallet management ultimately hinges on the issue of respect. By respecting and valuing not only the pallets but also the employees who handle and manage them, it's much less likely that your pallet situation will leave you brokenhearted.

Pallet Policy Pitfalls

An effective pallet management program requires issuing a formal, written policy that governs how pallets are used, returned, tracked, and accounted for. But that doesn't mean your policy has to be long and complicated, says Belinda Junkin, CEO of the Canadian Pallet Council, which provides a pallet interchange system for consumer product companies in Canada. Even a policy that's only a few paragraphs long can work well—provided the right information is included, she says.

Just as important as knowing what to include in such a policy is knowing what not to do. Here are some examples of pallet policy mistakes that can end up costing your company:

Ambiguous pallet specification criteria
Overly technical pallet specifications—technical requirements should be kept to one page
Unrealistic pallet specification standards that make pallets difficult to source or expensive to buy
Inadequate time allowed for trading partners to return pallets
Pallet policy letter inadequately distributed to key people in program, such as carriers, buyers, sales staff, and warehouse employees
Adding extra pallet expense to a trading partner's bill after product and service prices have already been agreed upon
Implementing a pallet deposit system that your sales department will resist.
Pallet policy letter hasn't been signed by someone who has adequate influence

Source: Rick Le Blanc and Stewart Richardson, Pallets: A North American Perspective

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