Optimising Your Pallets Can Save You Money
11 Sep 2014
Every business aims to minimise running costs and maximise revenue. This delicate balancing act is, in many ways, the simplest, most basic and most central principle of doing business. However, many businesses underestimate the way in which certain small things can cut costs and maximise efficiency. In particular, most companies fail to realise the importance of optimising pallets.
How Can Pallets Be Optimised?
Pallet optimisation simply means making sure that the best and most suitable kind of pallet is used for transporting products. There are a number of factors that need to be considered in order to ensure that pallets are optimised.
For a start, the size of pallet needs to be considered. Choosing the right size of pallet allows you to pack items in the most space-efficient way possible. Ideally, pallets should be sized to exactly fit a given number of products without wasted space, and to stack effectively into the vehicles used to transport them.
The type of pallet should also be considered. Certain items such as drums or barrels are best transported on a specialised pallet. This significantly reduces the chances of damage or spillage. Certain types of pallet are designed to avert problems in other ways. For example, sticking with the example of liquid barrels, many specialised pallets are made of plastic and incorporate a container into the base. This means that when spillages do occur, they will be contained for an easy clean-up. Liquids that would damage or otherwise affect wooden pallets will often not affect plastic ones. The result of all these factors is that fewer products are damaged, fewer pallets are wasted and any spillages that do occur will require much less time and effort on the part of staff to clean up.
Can Optimising Pallets Really Save Money?
The short answer to this question is yes. To illustrate the point and show how much of a difference it can make, it might be useful to examine a case study of a major business that recently underwent a process of pallet optimisation.
Last year, American food giant and Fortune 500 corporation General Mills decided to optimise pallets as part of an initiative to introduce leaner, more efficient and less costly processes. They made efforts to ensure that all pallets in use for their business were optimised for the specific products they were being used to transport.
As a result of these efforts, General Mills were able to fit larger numbers of many products on to a single pallet. This allowed them to fit more products into every shipment and this, in turn, resulted in a reduced number of shipments being made. The company’s head of PR, Bridget Christensen, reported that this caused logistics costs to fall by roughly US $192,000.
Surprisingly, this was far from the biggest source of savings that came from using optimised pallets. By making sure that the optimum pallet type was used for each product, transportation became safer and more effective. The result was that fewer items suffered damage while in transit, and the amount of revenue lost in this way fell by US $780,000.