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Cut costs with a
closed loop system
plastic rackable pallets to China where
the goods were palletised ready to
be shipped and racked in the UK.
Although there was the added cost
to ship pallets to China and a slight
reduction in container fill, introducing
a closed loop plastic pallet system
allowed the company to cut back to
just 5 warehouse operatives – making
them a far greater cost saving overall.
What are the barriers to entry? The
biggest hurdle when implementing
a closed loop pallet network is
the fact that change is required.
Many businesses are reluctant to
introduce new processes, particularly
in fast moving environments where
they require full team support and
collaboration. In many business
scenarios, however, it is often a
company’s false perceptions that
prevent them from instigating change.
A leading UK bathroom retailer was
using wooden A-frame pallets to
transport goods from being picked in
the warehouse through to delivery.
These pallets were used up to five
times before being recycled, but
required frequent repairs by two
personnel to keep them serviceable.
During our initial consultation, we
identified that they were using only
45 percent vehicle space and that the
wooden A-frames were costing them
over £1m per year.
We recommended replacing their
wooden A-frame pallets with plastic
pool pallets and our plastic pallet collar
to give them the flexibility of packing
different sized orders and to increase
the number of orders per trailer from
an average 28 to 52. By implementing
this change we saved the company
£1m annually for the wooden A-frames,
significantly reduced labour costs for
pallet repairs and improved vehicle fill
as well as their order picking process.
We calculated conservatively without
damages that the savings of using plastic
pallets in a closed loop network over five
years would be in excess of £8m.
Another client of Goplasticpallets.com
– a manufacturer of bulky furniture
– was shipping unpalletised goods
from their supplier in China to their
UK warehouse in 30 sea containers
per day, which required two shifts of
30 personnel to unload and palletise
goods to be stored in their 50,000
location racking system.
To demonstrate savings in both
labour and time, we trialled sending
Closed loop pallet networks are more
complex to implement than the open
model since they require a reverse
logistics process. Yet once in place,
they are much more effective from
both an economic and environmental
point of view.
Take plastic pallets, for example. By
replacing a pool of wooden pallets
with plastic businesses are guaranteed
a stronger, more durable product
designed for repeated use that
offers an extended lifespan – plastic
commonly last 10 times longer than
wooden, and hence can generate a
rapid return on investment.
Plastic pallets can be used repeatedly
for outbound and inbound trips to
the warehouse without causing injury
to operatives since they have stated
loading capacities and no sharp edges,
nails or splinters. Suitable for use in all
weather conditions, they are hardy and
water-resistant so can be easily stored
outside unlike wooden pallets, which
absorb moisture and are susceptible to
mould growth.
In terms of environmental savings,
by investing in a plastic pallet pool
businesses benefit twofold. More
and more users are moving away
from using wooden pallets to plastic
varieties manufactured from recycled
materials due to increased concerns
over the sustainability of forestry. At the
end of their long working life, plastic
pallets are in themselves recyclable
and can be re-ground and reused to
produce other plastic products.
At Goplasticpallets.com we have
helped a number of different
businesses improve supply chain
efficiencies and economies by using
plastic pallets in a closed loop system.
The following examples illustrate why:
Wooden or plastic, open loop or closed? Jim Hardisty
explains why you should consider the longer-term
efficiencies of the latter in each case.
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Logistics Business Magazine | February 2016
PALLETS