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Quality, Service Key To Success For Missouri Pallet Recycler
Tico Manufacturing, automated its facility with Rayco nailing machines. Tico handles mainly GMA pallets while brokering Europallets and recycling corrugated packaging on the side.

By Diane Calabrese
Date Posted: 6/1/2000

UNIONVILLE, Mo. — One door closes, anotheropens. Lee Tipton, owner of Tico Manufacturing, is proof of that. Seven yearsago, Lee’s employer, Churchill Truck Lines in Chillicothe, Missouri shut down.Lee had 20 years of experience in trucking, an occupation he enjoyed greatly.But instead of finding another employer, he became a business owner.

Two things prompted Lee to start his company.He had been growing a pallet recycling business on the side for some time, andhis son, Allen, was leaving the service and had an interest in joining Lee inthe business.

Tico now employs 32 full-time and 10 part-timeworkers. Besides Allen, there are three other family members in the business:Lee’s daughter and son-in-law, Catherine and Tony Simms, and a nephew, KevinPipes. Tico operates 24 hours a day, five days a week. The part-time employeeswork on the night shift and keep the pallet dismantling line going.

The company ships about 4,000 recycled palletsper week. It repairs about 500 pallets daily and dismantles about 1,000. Tico isheavily involved in the GMA market; about 85% of its output is GMA pallets.Custom pallets are not a big part of the business. "We do some," saidLee. "We make some 48x48 four-way and 42x42 two-way from all new stock, butnot many."

Lee is a Missouri native and attended highschool in Unionville where his business now thrives. Unionville, a town withfewer than 2,000 people, is located in north central Missouri about 15 milesfrom the Iowa border, and Tico serves customers within a 300-mile radius innorthern Missouri and southern Iowa. Customer accounts include milling companiesand meat packers.

"We maintain our customer base by qualityand service," said Lee. "We offer real good service. Two or three ofour deliveries are scheduled, but much of it is just-in-time." Just-in-timemeans that orders are delivered by the next day; in some cases, if distanceallows, orders are delivered the same day.

Although the company’s bread and butter isrepairing pallets and remanufacturing pallets from recycled material, Tico has afew other operations that generate revenues. It brokers Euro pallets and CP-1pallets for the European chemical industry, although Lee described theseactivities as a "small part" of the business. Tico also is involved incorrugated recycling.

Tico obtains pallet cores from a number ofbusinesses. "We have a drop-and-hook with 12 different companies,"said Lee. "We drop an empty trailer, and when a customer fills it, we pickit up and drop off a new one."

Like other pallet recyclers that providedrop-and-hook service to customers in order to recover pallet cores, Ticorequires a large number of trailers; the company has 20. It also has fourtractors to haul them.

When a trailer-load comes into the Tico yard,it is unloaded at the disassembly stations. The pallets are sorted into two maincategories — those that can
be repaired and those that will be
dismantled.

There are seven tables in the repair areawhere workers replace broken deck boards. Damaged stringers are repaired with aplug. Half the material used for repairs comes from pallet parts that wererecovered from Tico’s dismantling operations; the other half is new cut stock.

Pallets that do not warrant repairs are takenapart on bandsaw dismantling machines. Tico is equipped with two bandsawdismantlers, a Smart machine and a Smetco machine. The Smetco machine wasobtained earlier this year in a trade for pallets and replaced a disc-typedismantler, which Lee is selling. The Smart dismantler was purchased new threeyears ago.

The company uses a single-head Heartland trimsaw for cutting used pallet material to size. "It’s been my most reliablepiece of equipment," said Lee. "I hate to think how many millions ofboards it has cut."

Reclaimed deck boards are cut down on theHeartland trim saw to 40 inches; then they are sorted by width and thickness,banded together in bunks and moved to the pallet assembly area. Good 48-inchdeck boards are not trimmed but are reused as is. Reclaimed stringers are sortedby two types, notched and unnotched.

Lee has divided notching operations among twodifferent machines. New stringer material is sent to a Brewer double-headnotcher while used material goes to a Kent Corporation single-head notcher."The Brewer is a higher production machine," explained Lee. "TheKent is a lower production but tougher
machine. The Kent uses a (Profile Technology) carbide tip indexable head
cutter [and can handle] a board with a nail embedded."

Lee automated Tico’s pallet assemblyoperations in the last two years with investments in two Rayco nailing machines.He had seen Rayco demonstrate a machine at the Midwest Forest Products Show inCape Girardeau, Missouri and was impressed. "It looked like the sturdiestbuilt," he said. He bought his first Rayco nailing machine in 1998 and lastyear added a second.

The two Rayco machines use pneumatic nailingtools and collated nails. (Editor’s Note: Rayco now supplies nailingmachines that also use bulk nails and also retrofits some of its earliermachines to operate with bulk nails.) Although collated nails are moreexpensive than bulk nails, Lee said that the Rayco nailing machines neverthelessoffered Tico several advantages. For starters, he said, "We were used tothe technology. We repair all our own nail guns."

Tico uses Duo-Fast guns and nails on onemachine and Stanley-Bostitch on the other. "The companies supply the nailguns," Lee explained. "We buy the nails. It keeps the two companiescompetitive" by using two different suppliers.

The Rayco nailing machines also offered otheradvantages over assembling pallets by hand, Lee noted. "The machine hasair-powered cylinders so that the material is squeezed tight before it isnailed," he said. "We were using two-man jigs before the Rayco nailers,"so the machines improved the fit and alignment of pallet components and overallpallet quality. The improvement in quality contributes to increased durability.Some of the pallets will find their way back to Tico, and often they requireonly minor repairs before being resold.

Automated nailing also has helped Tico toreduce injuries and workmen’s compensation insurance premiums.
Previously, with workers assembling
pallets by hand with nailing tools, Tico recorded about three injuries per year,according to Lee. "Because one operator controls three nail guns on theRayco,
it helps us to reduce the number of nail gun injuries."

Lee’s son, Allen, supervises the palletassembly operations. In addition to the two Rayco nailing machines, the companynormally keeps two workers busy assembling pallets at a two-man jig. Whenbusiness is brisk, more pallets are built at additional two-man jigs. Finishedpallets are blown off with compressed air to remove dust.

"We have a rotating work force,"said Lee. "They do something different every day. It keeps us away fromrepetitive motion injuries." There is one exception. "The Raycooperators are dedicated, two men on each Rayco. One sorts recovered stock andputs it on the machine. The other one flips the pallet and activates themachine."

Tico provides heat-treatment of pallets forsome customers in order to eliminate insects. The service was prompted by acustomer who had problems with carpenter ants about two years ago. "Thecustomer had been using methyl bromide," said Lee. "But he could nolonger use it because of federal regulations." Allen designed a 24-foot by40-foot wood frame and insulated building for the heat treatment process. Thestructure is heated by a Central brand boiler that raises the temperature to 135degrees. Pallets are heat treated for 24 hours.

Finished pallets that do not require heattreatment are sorted by type — repaired or remanufactured — and graded andthen warehoused.

As for the brokering segment of the business,each month Tico handles about 300 to 400 CP-1 pallets and about 1,000 Europallets. "We buy — mostly from the East Coast — clean, refurbish andsell the CP-1 and Euro pallets," said Lee. After an initial surge, thevolume of Euro pallets leveled off.

Tico has been involved also with recyclingcorrugated packaging the past two years. It added this activity because somepallet customers needed to dispose of corrugated packaging, and the materialgoes to Tico in the same trailers as their excess pallets. Tico gathers baledgaylord boxes and tote boxes and takes about three trailer-loads each month topaper mills to be recycled.

Tico has two metal frame buildings. Its newestbuilding, constructed with the help of a $100,000 grant from the MissouriDepartment of Natural Resources, contains 12,000 square feet and houses thecompany’s offices, pallet assembly area, storage space and loading docks. Theother building, though older, has 28,000 square feet. It houses the lumberrecovery operations and also has storage space and a five-trailer dock. Bothbuildings are heated with Central brand boilers that burn scrap wood.

Lee gave credit for obtaining the grant to hiswife, Gayann, a teacher in the Putnam County school system. She was convincedthere had to be funds available for recycling pallets and helped Lee track downthe grant from the agency’s division of waste management.

Besides burning some scrap wood for fuel, Ticoalso disposes of scrap by having it hauled to Chamness Technologies inEddyville, Iowa, which has a large operation that produces compost. Chamnesscharges a fee for wood that has not been processed by a grinder, however. Inorder to reduce his waste wood disposal costs, Lee recently purchased a usedgrinder that he plans to refurbish and then put into service.

When Lee takes time away from his business, he participates inchurch activities and enjoys time with his family. "I am a very devotedfamily man with three grandchildren," he said.

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