Arkansas Custom Crate & Pallet
Entrepreneur Turns to Baker Products to equip a start-up company that is strongly focused on manufacturing new, custom, quality pallets.
By Diane Calabrese
Date Posted: 7/6/2001
PINE BLUFF, Ark. - Arkansas Custom Crate & Pallet Inc. has formally existed only since January. Yet the new company has some old hands behind it in terms of both pallet industry and business experience.
Robert Knott owns Arkansas Custom Crate & Pallet (ACCP), which is held under the parent company, R&S Enterprises. The R&S stands for Robert and Stacey, the husband and wife team that shares its business commitments in varied ways. For example, Stacey manages several R&S holdings.
Although Robert did not have a firsthand knowledge of pallets when he launched ACCP, he had acute insight into the role they play in manufacturing. He appreciates the help he got in gaining that understanding from ACCP's foreman, Jack ("Knubby") Whimbly. "(Jack) spurred me into the pallet industry," said Robert. "He had a small pallet operation and wanted to grow and expand." But when Jack could not make the goals he envisioned a reality, he agreed to work for Robert at ACCP.
ACCP's niche is extremely focused. "We produce only new and mainly custom pallets, using number one premium exclusively," said Robert. "We don’t want to compete in the GMA bidding war. We stress that our pallets can be re-used 18 to 27 times before they have to be refurbished." The quality assurance measures that ACCP builds into its pallets are "thicker deck boards, wider runners," using only solid oak or other premium hardwoods, said Robert, who sees new pallets as just the starting point of the company.
Fifteen employees work at ACCP; the company runs only one shift at this time, five days per week. Robert already has expanded into crates and boxes. He is looking forward to building a fully integrated wood products business. Related products and services are on the horizon, too, such as palletizing, mulch, dimensional lumber, and a larger chipping operation.
Ultimately, Robert turned to Baker Products to equip his company. Several things sold him on Baker, including the supplier’s ability to provide a "total package" and "full service." He also liked what he heard from the engineering department, and he liked the way Baker equipment is built.
"We made a trip to the Baker facility and trained on our own equipment," said Robert. Baker is headquartered in Ellington, Missouri, and Robert considers the visit there as time well-spent.
Robert adopted a PLC (programmable logic controls) system to automatically feed and stagger the wood being cut. He had "a little apprehension about adding computers to a dusty environment," he said, but is glad he did because there is "no doubt it's more efficient." The PLC system, although initially more expensive, reduces the number of light switches, contacts, relays and manual controls required to insure the equipment operates at maximum production levels and ultimately results in "a lot less maintenance."
ACCP uses cants for raw material. It buys all oak from sawmills within a 70-mile radius of Pine Bluff. "We prefer hardwood," said Robert, "because of its durability and its attractive end product...It holds color well." ACCP buys two or three loads of cants and lumber per day.
The cut-up line begins with a Baker V-deck to unscramble cants, which move along a conveyor to a two-head Multi-Select 36-inch cut-up saw. The Baker Multi-Select makes up to six different cuts. The modified Multi-Select handles cants as big as 12x12 and up to 14 feet long - the largest Multi-Select Baker has built to date.
The cut-to-length cant material flows to a Baker BX Cant Sizer, a two-head band saw machine with a 12-inch capacity, to be sawn to the proper height. Baker staff, at the request of ACCP, modified the BX with 12-inch holdovers rather than hold-downs to handle lumber - just one example of Baker’s service to tailor the equipment specifically for ACCP. The BX can handle two-, three- or four-sided cants. After running through the BX, the sized cant material passes onto a transfer conveyor equipped with a star turn, which holds pieces until the spacing on the chain is correct, and goes along a Baker four-head horizontal band resaw line.
Finished boards are cleaned on a Baker deduster that removes the fine sawdust generated from the thin kerf band saws. The deduster produces clean boards, and the company’s sawdust-free pallets have drawn notice from customers, according to Robert. ACCP also is equipped with a Baker double-head notcher for notching stringers.
Robert is considering additional machinery investments with Baker. "I can't say enough good things about Baker," he said. "Baker brings the total package to the table. Any time I need them I can call, I get answers on the spot. They can diagnose problems on the spot."
"I'll let the cat out of the bag," he added. "We're looking at having Baker produce a 12-head band resaw." The 12-head line would be used to cut deck boards from 10-inch stock, each piece of sized cant material yielding 12 boards at the end of the line. The saw line could be operated by two employees and produce about 60,000 board feet per shift, according to Robert.
A used Bush 48-inch chipper handles wood waste. (Precision now handles the Bush line.) The company’s chips are sold to a paper company for use as paper chips, not fuel.
Pallets are assembled by hand with power nailing tools, and finished pallets are stacked by an Industrial Resources stacker. When interviewed for this article, ACCP was producing about 450 pallets daily and "growing constantly," said Robert. The Baker cut-up line is capable of producing enough stock - 35,000 to 40,000 board feet per shift - for about 2,000 pallets daily, he indicated.
ACCP makes a wide range of custom pallets - over 100 sizes, Robert estimated. The company makes pallets as small as 22x23 and up to 50x54 and squares. Only two customers use GMA pallets.
To house ACCP, Robert purchased a 33-acre site that was once owned by an oak flooring company. "We operate out of a 100,000-square-foot building." There is plenty of storage area for both resawn material and finished pallets, and the investment included dry kilns. The drying operation currently is not being used, but Robert is considering expanding into dimension lumber manufacturing.
ACCP serves customers representing a variety of industries situated near Pine Bluff, a town of about 55,000 that lies along the Arkansas River, 70 miles southeast of Little Rock. Robert currently targets customers within a 50-mile radius of Pine Bluff.
Eventually, Robert plans to integrate the company, putting in a Baker scragg mill and buying and milling scragg logs. A mix, cants and logs, would give ACCP more options in negotiating prices for raw material. January was a particularly challenging time to get the business going, he noted, because lumber prices were high.
When he integrates the business, he plans to buy large trucks. "We are running Hot Shots right now," he said.
"Profit margins are considerably better with crates," said Robert. Customers generally specify design and type of fasteners.
ACCP’s experience with supplying boxes for potatoes for a customer that requested staples for fasteners led to the company experimenting with - and switching to - staples in assembling some of its pallets. The staples worked so well that they are being used in about 60% of the pallets manufactured by ACCP.
"Shiners are almost non-existent now," said Robert. ACCP uses 2 1/4-inch Duo-Fast staples that are applied with 125 pounds of air pressure, which Robert said is sufficient to push them through oak. "We staple across the grain, never with the grain," he added. The staples provide better holding power than nails and without the end-cracking associated with nails, he said.
ACCP is Robert’s first manufacturing venture; his other businesses are service-oriented. He has had a long interest in getting into manufacturing. A native of California, Robert followed his father to Arkansas and earned a degree in business administration from the University of Arkansas at Pine Bluff, minoring in computer science, economics and accounting. As a businessman, when he thinks about an enterprise, he considers the many factors that impact the bottom line and also the ‘big picture,’ how it fits into the larger scheme of goods and services. Robert considers manufacturing the foundation of the economy. Service-oriented businesses are built on the exchange of dollars that begins at the manufacturing level, he said.
When he considered the pallet industry, he said, he figured he could penetrate the market with the "smallest" investment. Although Robert had no specific experience with pallets, he was comfortable entering the business. "Every business operates on much the same principles," he noted, including a "focus on good quality service and productivity." Robert also has experience he could transfer to the pallet industry. "I've got a tremendous background in construction," he said. He worked as a supervisor at International Paper Co. for five years.
Robert and Stacey have three children, and the family enjoys camping, water sports and snow skiing; Cancun is a favorite destination for family vacations. He is an avid reader of the Pallet Board, the Internet ‘chat room’ of Pallet Enterprise that is accessible at the magazine’s Web site (www.palletenterprise.com). He has found the e-mail discussions to be thought-proving, he said.
Robert is interested in piggy-backing on ACCP and expanding into other wood products areas. "I've looked into laminates, injection molded products...the possibilities are endless." A sawmill could be part of the enterprise in the future.
Robert plans additional machinery investments to increase production. For example, he planned to have an automated pallet assembly in place by July and was considering several suppliers. He was looking for a machine that would require "minimum changeovers" and would be "easy to maintain, sturdy, efficient." He also is studying the addition of a tub grinder to service customers that require disposal of scrap pallets.
Despite the similarities Robert sees among businesses, he notices some differences between manufacturing and service industries. He has enjoyed the new challenges, he said, of dealing with purchasing agents, "the bidding process," and other sales and marketing activities that require a "solid strategy."
Although ACCP is another entrepreneurial avenue for Robert, he has another objective, he said. "Our emphasis is to create jobs. Our goal is to create 200 to 300 jobs in five years." Pine Bluff needs more jobs for its citizens, and he is eager to do what he can to provide them.
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