Across the country, the UK has one of the most sophisticated logistics supply chains in the world – and this is the same for cash and carry businesses. No stone is left unturned in the process of improving efficiency when it comes to getting product to the marketplace. However, we should not rest on our laurels. Indeed, there are still areas where we can improve as an industry.
What is sometimes not appreciated is the way that wholesalers are buying products in complete packages, which includes not only the price of the tangible goods but also an element of the cost of moving those items. And a major part of this is tied up in pallets. Understandably, those working in the goods-in part of a wholesale business are concerned with maintaining an efficient distribution service for their end-customers. But taking a more holistic view of their role in the bigger supply chain could create significant cost savings in the long term, for everyone.
To illustrate this problem, let’s take a look at the specific role the pallet plays in this equation. Our experience in the industry tells us that most staff in the wholesale sector estimate the cost of a pallet to be minimal – somewhere around the pound;3 mark. This perception encourages a culture that does not put much ‘worth’ in the humble pallet, which often gets left in the corner of a warehouse or passed on to the end-customer when full consignments are sold on.
In fact, LPR’s red pallets cost in the region of pound;10 to manufacture, are made from timber sourced from sustainable forests and, containing no less than 135 nails, are made to withstand numerous journeys – not just one trip. Once wholesalers appreciate the costs involved, they usually do begin to manage the return of their pallets more proactively – thus keeping down the costs within the supply chain. They also learn that we can work flexibly with them when it comes to recovering our pallets. We are not unrealistic enough to expect goods-in staff to re-palletise complete consignments when they are being sold on – but we do ask for pallets to be recovered and brought back into the mainstream supply chain.
But what isn’t generally understood in the industry is the strong link between looking after pallets and the overall cost of the supply chain. The issue of lost pallets is a significant problem for the industry, which relies on cost-effective and efficient supply chains to deliver products on time.
By taking care of their pallets and ensuring they are managed effectively and passed back to the pallet provider on a regular basis, wholesalers could be contributing significantly to keeping their own supply chain costs down. What’s important is for everyone in the chain to understand that we all rely on each other to create a truly efficient system. We work to ensure that wholesalers really understand this link between their management of pallets and supply chain costs.
Understanding the role pallet management can have within the supply chain is also an important part of the sustainability issue. And with ‘green’ politics now firmly on the agenda of the consumer and customer alike, this is no longer an issue that can be ignored. Looking after pallets and ensuring that they are able to be re-used within the supply chain helps us to get the best use from an asset, boosting the industry’s commitment to sustainability.
While we take great care to source wood from sustainable forests, the fewer trees we need to fell to make new pallets, the better for the environment and all players in the supply chain. Therefore, by taking a more ‘hands-on’ approach to pallet management, wholesalers create a rare win-win situation for all concerned. Keeping down supply chain costs and helping the environment – what better reasons could you want to take better care of pallets?