Great supply chain starts at the humble pallet

You might wonder why I would want to write about the unglamorous pallet, but if you had seen the eyes of financial controllers light up as many times as I have when I casually ask, “So, how’s your pallet control?” you would understand my motivation.

Depending on how your business's pallet management is going, pallets are either an indispensable asset to the logistics industry or a nightmare in blue or red (the colours of the two main types of pallets — Chep or Loscam).

For people in the latter camp, they simply don’t want pallets on their books and will do many things to move them on. One of the issues is that the individual costs are very small, but the accumulated costs are high.

This means people are motivated differently: asset controllers see the eight cents per day (the cost per pallet) building to hundreds of thousands of dollars per annum of unrecovered cost. But for drivers and many operational managers, it is not a priority.

The solution to the problem often lies more in the people side of the equation, but getting the tools and process right is important. Drivers and operational managers not only don’t have any incentive, but they’re also working with a flawed tool in a flawed system: the pallet tracking book.

This widely used system is open to easy-to-make errors throughout the entire process. For drivers, perhaps at the end of a long shift or on their last pickup, the last thing they want is to ask an equally tired receiver for their swaps, and then spend an extra few minutes filling out the book.

The book then gets handed over to somebody at the branch, if it’s not lost, wet, or unreadable. Then there's the problem of the audit (to make sure what’s on the docket came back), human error, and other factors that come in to play here.

Now the fun begins. All the handwritten data needs to be entered into a spreadsheet or, if you’re lucky, an application. Drops, pickups, and collections are balanced and the customer is chased. All of these converging data points and paperwork makes it feel like a series of onerous, thankless tasks. There are several points in this process where an easy-to-make mistake could have a large effect.

The good news is there are some tried-and-true ways businesses with best-practice supply chains deal with these problems.

Here are five areas to focus on that often make the biggest difference, even if your pallet management challenges may seem intractable right now.

1. Declare the pallets in the consignment data from one end of your processes to the other
2. Make the collection of the pallet part of the mandatory process in your driver freight-tracking application
3. Enforce an audit for return to the depot — take two photos before unloading (that is for either side of the truck being used)
4. Gamify the results — consider a scoreboard across the depot or the whole business
5. Reward your top performers with incentives

We have implemented this many times and you would be surprised how quickly drivers take to it, as they hate the paper more than you know.

There are a few tricks to make the whole process easier, so if you’re drowning in pallets, dockets, and wasting money drop us a line.

With over 30 years' experience, supply chain expert Dave Ffowcs-Williams works with businesses across New Zealand to help them get on the road to a more efficient, traceable, and responsive supply chain.