Inside Logistics

Materials handling

Effective unit handling: The importance of the humble pallet


January 11, 2011
by Dave Luton

MM&D MAGAZINE, NOVEMBER/DECEMBER 2010: One of the benefits of working as a long-time consultant is the opportunity to visit many facilities and see what works well, as well as what falls short.

One potential shortcoming affects all aspects of an operation, and yet many facilities have refused to deal with it for a long time. If not done properly, industrial unitization—including packing and crating—can affect all aspects of warehouse operations.

In the early days of my logistics career I would run into problems surrounding this area surprisingly often. However, with the advent of effective returnable packaging logistics programs, along with more reliance on green logistics, problems with industrial unitization occur less than they did in the past.

This is especially true with the emergence of returnable pallet programs such as the (international) orange pallets of the Canadian Pallet Council (CPC) or the light-blue pallets offered by CHEP. Both vendors offer a range of pallet options for either lease or purchase. In the past, the pallets they offered were usually the popular 48x40in, partial four-way entry pallet.

Over time, returnable pallet programs can lead to several broad benefits to logistics systems. But those benefits aren’t always clear unless you observe the system before and after a facility carries out such programs.

More than 20 years ago, I worked for a major Canadian retailer that didn’t use a standard 48x40in pallet in its large, central distribution centre. It used a 48x32in pallet adopted a long time before, possibly because the retailer wanted to increase its number of facings.

While much of the merchandise was light enough to be floor-piled, the fact that the retailer’s pallets were smaller than those in more broad use prevented the company from using a logistics system that would have benefited from unit load transfer between trading partners.

It was also interesting that the lack of unit load handling extended down into this retailer’s stores. The organization made its floor-loaded shipments using extensible conveyors, and surprisingly, many of its retail stores did not have proper loading docks to receive palletized shipments. This was for larger retail outlets with 50,000 to 100,000sqf of floor space on one floor.

You can imagine the implications of off-loading tractor-trailer loads of merchandise by hand to support retail operations of that size. With today’s emphasis on flow-through logistics and the increasing emphasis on cross docking, it’s not surprising this retailer is no longer in business in Canada.

The influence of proper packaging and unitization extends throughout the logistics chain, and the use of a common-size pallet throughout a logistics system should be fundamental. Much of the success of many larger logistics systems in industries such as grocery, automotive, chemical, beer, wines and spirits stems from the decision to have an effective unit-load system.

Using a standard pallet within a warehouse has so many benefits it’s difficult to imagine a facility that does not do so.

The benefits include:

• Standard equipment in wide use with economies of scale, both in price and for replacement parts. The ability to easily replace parts is often overlooked in distribution centre design. For example, I can get eight- and nine-foot racking beams for 48x48in pallets from most racking vendors from stock;

• Reduced damage to product and less protective packaging, such as corrugated;

• Improved worker safety. Pallets seem often to be overlooked in safety audits of warehouses. Government inspectors look carefully at racking or conveyors to ensure the standards are met. But it’s rare that I have heard the same emphasis on pallets or unit-load packaging even though every piece of equipment depends on them for successful distribution centre operation;

• For successful distribution centre operation there is an increasing need for communication with warehousing transportation partners. As the speed of operations increases, successful transfer of materials at both receiving and shipping docks is essential.

Can you imagine the need to hand-load or unload every carton or package at each stage of distribution? These days, logistics supply chains are worldwide and the process suffers if so much manual labour is needed at each of the transitions.

Most warehouse handling systems are designed to transfer material using bottom supported unit loads. While top-lift equipment such as cranes and hoists are used, such equipment usually supports a unit from the bottom. So if a pallet collapses or is broken, then the system ceases to function.

The chance to see an ineffective unit-load system is a powerful reminder of the things we sometimes take for granted. Damage and risks to employee safety are only two of the many problems. Hopefully, they are problems you never have to face as a warehouse manager.

Dave Luton (dluton@cogeco.ca) is a consultant in the Greater Toronto Area.