The Pallet Factory - Professionalism in Recycling Growth
The Pallet Factory: From automation with MSI's newest machinery to using criminals in its workforce, the Pallet Factory is one of the true pioneers in the recycling industry.
By Staff Writer
Date Posted: 11/1/1999
Memphis, Tennessee—Few places could have been better than Memphis to start a pallet recycling company and make it work. As one of the major distribution hubs in the United States, Memphis offers the challenge for a well managed recycling company. Mike Doyle recognized this 22 years ago while he owned a fruit juice franchise for the Home Juice Company, based in Chicago. His distribution area covered Arkansas, Mississippi, and Tennessee.
Mike said, "While visiting one of the distribution centers that we sold juice to in Jackson, Mississippi, I was given a tour of the facility. I was taken past an area that must have held 25,000 stored pallets. The owner of the facility told me that he was probably going to take them to the landfill. One or two weeks earlier, the sales manager from the franchising company had mentioned that they owed their glass supplier 40,000 pallets. For every pallet load of fruit juice I ordered I was paying a $5 charge to cover the cost of the pallet, so I was keenly aware of the value of pallets. I bought the pallets from the man in Jackson, solving his pallet problem, and sold them to the Home Juice Company for less than they were paying for new ones, helping them solve their pallet problem."
Thus, The Pallet Factory (TPF), a family run pallet recycling company, was launched. TPF has evolved into a recycling leader in the Memphis and overall Tennessee/Kentucky market. Mike was active in both businesses until he sold his share of the juice franchise in 1982.
The Pallet Factory started like many recyclers. An entrepreneur saw a need and turned a problem into an opportunity. The initial company had a simple but functional location in Nonconnah Corporate Center. Mike started with hammers, nails, and dreams. Constantly keeping his eyes open, Mike repeatedly seized upon opportunities to expand his business. He has expanded and moved the Memphis location to constantly upgrade TPF’s service. In 1997 Mike bought a 6.3 acre parcel of land on Arnold Road and moved TPF’s headquarters into a new 50,000 sq.ft. building in early 1998. TPF has developed 4.3 of the acres into its current factory, has two more acres for expansion, and is planning to buy an additional five acres nearby for the future.
Every time that Mike finds a potential customer that provides the catalyst for additional expansion he gives it serious consideration. TPF is a model example of the growing number of pallet recycling companies that are expanding into multiple locations. TPF’s Lexington, Ky location was its second, started in 1987. TPF entered into a deal with IBM to handle 25 truck loads of pallets a week, enough business to start this second TPF location. The Lexington location was profitable the first month, prospered and grew so that it had enough business to remain open after IBM no longer needed pallet services in Lexington.
Located strategically half-way between Memphis and Lexington, Nashville became the location for TPF’s third plant in 1989. TPF opened its Jackson, Tenn. plant in 1991 and its New Albany, Miss. plant in 1996. The Jackson plant opened initially to serve Martha White Foods which was sold to Pillsbury and later chose Chep as a pallet supplier. TPF became a Chep depot and also expanded into other accounts. Both the New Albany and former London, Ky. plants opened to service Wal-Mart® D.C.s. In keeping with its business plan, TPF works to develop other clients and diversify its customer base.
The recent Wal-Mart®/Chep relationship has seen many changes come to the Wal-Mart® D.C.s. TPF is no longer serving the retail giant out of London; the New Albany location is still an unknown. Mike indicated he has been approached about running a Chep depot in another city.Emphasis on Professionalism
Everybody who knows Mike Doyle says the same thing. He is both a great guy and a good businessman. Mike is a living example that a person can be liked as an individual and respected for his business successes. He was active in helping form the International Association of Pallet Recyclers as an organization dedicated to providing networking and benchmarking opportunities for recyclers. This organization was absorbed a few years ago by the National Wooden Pallet and Container Association; TPF has been active in the NWPCA since 1994. In fact, Mike is currently secretary/treasurer of the association and one of the most active recyclers in the organization.
Last May the NWPCA held its annual pallet recycling meeting in Memphis. A tour of TPF’s Memphis plant and a Memphis style Bar-B-Q were certainly two of the hits in what proved to be one of the most memorable and historic pallet meetings ever held.
The pallet industry, particularly on the recycling side, is going through consolidation and networking expansions. In 1995, Mike sold TPF to PRANA when a number of recyclers attempted to form a corporation that would provide a network of established, quality oriented pallet recyclers to serve pallet users from single location plants to national networks. Mike was astute enough to put his company in an escrow account, retaining control in case the newly formed consolidated venture failed. When Mike realized the next year the PRANA was not going to make it, he withdrew TPF, regrouped his business, and continued full speed ahead.
The TPF pallet management program is a good example of the company’s professionalism. The program tracks the location and condition of pallets to help reduce customers’ pallet costs. For example, the program which TPF used with Wal-Mart® keeps an accurate daily activity report on four pallet categories – pallets ready to go to Wal-Mart®, pallets in need of repair, Chep pallets, and trash pallets. Wal-Mart® can effectively compare D.C.s to help manage its pallet program.
TPF can design pallet management programs to count, retrieve, repair, and return pallets in a manner that is customized for an individual client. Pallet management programs can be setup and managed on-site for large customers who want their pallet work to be accomplished at their plant or D.C. Of course, TPF provides conventional pallet repairs and specialized pallet management off-site at its own plant locations as well. The company is moving more toward building remanufactured pallets out of recycled lumber or new life (combo) pallets from mixed new and recycled lumber. Thus, TPF provides all phases of pallet recycling and repair and supplies both new and used pallets as needed to clients. Mike and his company have very strong industry contacts that put them in a good position to provide any products and services that do not fit well into TPF’s product mix, work schedule, or delivery capability.Automation to Meet the Future
Like many progressive recyclers, TPF views automation as the key to increased productivity. Its first major automation steps were taken in the Memphis headquarters plant. Mike’s brother, Jim Doyle, owns Machine Specialists, Inc. (MSI), a Memphis manufacturer of pallet sortation and repair machinery and systems. This puts TPF in an inside position in the pallet machinery world. Jim is very knowledgeable of recycling; before making a commitment to machinery he was one of the best known and most widely recognized pallet recyclers in the country. Now Jim invests all of his time, experience, and energy into MSI. The pallet people who attended the NWPCA meeting this May were particularly attracted to The Pallet Factory tour because of the new MSI machinery the company had recently installed. Automation is a hot topic in the pallet recycling world, but recyclers have not been accustomed to making the kind of investment necessary for automating with a sortation/repair line. They are moving carefully and examining all their options.
Certainly one of the major reasons for automating is to reduce handwork and back strain and to cut down on the number of people required to do recycling functions. TPF employs around 150 total in its five plants, with the Memphis location using over 40 people in two shifts.
Piece repair work on the white pallet line is done as a team so that everybody pulls together for the common cause. The pallet stackers have counters to make accountability fairly easy.
Mike said, "One of the benefits of automation is the flexibility of using women to do more functions. It reduces the work strain that is so common in the pallet recycling business. Pallet stackers are worth their weight in gold for improving productivity and reducing the physical exertion involved.
"Another benefit of automation is an improvement in quality. Stackers and other machines often require a minimum quality level in order for pallets to flow through the system. This is similar to the automation sensitivity our customers often experience."
The MSI machinery installed at TPF has more than doubled the number of pallets going through the plant, even though it takes fewer people.
When asked about what makes him successful, Mike responded, "One element of success in recycling is a dependable supply of pallet cores." TPF buys practically all of its pallets directly from suppliers using its system of over 100 drop trailers left at company docks. Maybe 1% or 2% come from independent individuals who get cores that are isolated and more difficult to pinpoint. TPF has over 20 tractors in its system to pickup and deliver pallets.
Mike continued, "We attempt to work with customer management from the top to the bottom. Becoming involved in solving customers’ pallet supply problems makes TPF an important part of their businesses."
While most of TPF’s business involves pallet sortation and repair, the company supplies new and remanufactured pallets as well. It recently bought a Pallet Chief machine that functions as a nailing jig with a stacker. Two people can build about 350-400 new pallets a day on this system. TPF uses Stanley-Bostitch nailing tools for both manufacturing and repairing. Mike said, "Bostitch backs up its excellent service with good tools." The company also manufactures new pallets on two nailing tables and builds either remanufactured or combo pallets at five other nailing stations.
Maintaining machinery in good working order is an important part of automation. Since Jim Fike joined TPF in charge of maintenance, he has cut maintenance costs by 65% in a year.MSI Machinery for Sortation and Repairing
Since opening the new Memphis location, TPF has automated and upgraded its Memphis plant with a full contingent of MSI machinery. Mike has been very happy with MSI.
Robert Cage handles the company’s Chep sortation line. TPF has functioned as Kroger’s D.C. for 20 years. It sorts Kroger’s Chep pallets as a depot function. Robert inspects each pallet when it comes out of the MSI destacker. He has four options - good stringer pallet, stringer pallet in need of repair, good block pallet, and block pallet in need of repair. Robert sorts around 4,000 Chep pallets in a typical day; Chep picks them up from the staging area.
Pallets to be disassembled into recycled lumber go to the disassembly/trimsaw department. Until recently TPF disassembled pallets on its MSI Tres which Mike indicates he has really loved. It has torn down many pallets for the company. Recently TPF installed two MSI bandsaw disassembling machines to increase the company’s disassembly capacity. Mike said, "I had never been a bandsaw advocate but these are unbelievably good. They provide cleaner lumber and are versatile enough to disassemble block pallets and any kind of odd ball pallet." A bi-directional changeover senses the decking and carries it to one of two MSI Trim-Tracs. TPF recently installed a new MSI Autosort that automatically sorts lumber according to length on the outfeed side. Mike volunteered, "It works wonderfully!" Disassembled stringers go through a MSI Hammer that depresses any nail stubble. The reclaimed lumber can be used for repairs, remanufactured, or combo pallets.
About 10,000 pallets a day go through the TPF Memphis plant. In addition to 4,000 Chep pallets, the company builds around 1,000 pallets, repairs another 1,000 odd-sized pallets, and repairs 4,000-5,000 GMAs a day.
Odd-sized white pallets are dispensed from a MSI Tipper to a Viking board remover/repair table where needed repairs are done.
White 48x40 GMA pallets are repaired using MSI’s nail-on-the-fly Automated Sort and Repair System (AS/RS). A MSI destacker feeds pallets to an inspector who diverts good pallets to a stacker, ones to be disassembled to another stacker, and those to be repaired down one of two lines - one for #1s and one for #2s. Stringers that need plating are plated before traveling down the line. On each line the crew removes bad boards and depresses nail stubble using a MSI Deckmaster. Repairs are made on-the-fly where repairers insert companion stringers when needed on #2 pallets and replace missing deck boards without lifting a pallet off the moving conveyor. TPF changes each line’s speed as needed to adjust to the condition of pallets being repaired at the time. The #2 line usually runs slower since more typically has to be done to a #2 pallet. The whole line takes 11 people, but the company has more than doubled its repair rate with fewer people when compared to the old way of repairing on tables.The TPF People
Mike met Naomi, his Australian wife, during his last two years at Memphis State when she was in chiropractic school. Until a few years ago, Naomi was deeply involved in the TPF office. Josh, the middle son out of three Doyle children, helps his father manage TPF.
Key management staff include Randy Averesch, controller, and Emily Brasher, office manager and sales coordinator. Andy Pickell, formerly with Indy Pallet, manages the Memphis plant. Tony Ausbrooks came to TPF to manage the Nashville plant after working seven years at Kamps Pallet in Michigan. Bill Knight manages the Jackson, Tenn. plant, and Vern Norris manages the Lexington, Ky plant.
Since TPF moved, a significant number of TPF’s workforce is composed of prisoners from the Shelby County Correctional Facility. Mike stated, "The correctional facility transports them in a van. They are on time and dependable. The negative side is having to retrain because of relatively high turnover."
Representatives from the correctional facility addressed the NWPCA convention in May and explained how well the program works and how it is administered. The inmates’ paychecks go to the state, which divides the money between incarceration costs, taxes, fines, any appropriate court costs, and an escrow fund for the inmate upon release. Most inmates are drug offenders or people on non-violent types of charges.
TPF drug tests its drivers to protect all parties. The company has a 401K plan and offers medical insurance.
People often wonder why some people seem to be able to make their companies grow and become successful when others struggle with less success. Some of it may be location. A little of it may be luck. But a lot of it is just plain good management and a vision to doing it better. Mike and Josh Doyle have a big dose of this necessary ingredient for success. Just talking with Mike for a while makes one feel better because his enthusiasm is contagious. There is every reason to believe that TPF will continue to grow and succeed. Our industry has its share of challenges facing it at the end of the century, but TPF seems to be determined to turn challenges into opportunities.
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