Designed for Growth: Pallet Consultants Develops Top Flight Facilities, Relies on AMS
Southeastern Leader: Pallet Consultants develops game plan for strong growth and establishes new plants with equipment and software from Automated Machine Systems. Find out its secret to growth and remodeling plants to attract blue-chip customers.
By Chaille Brindley
Date Posted: 1/1/2018
Finding the right balance between production efficiency and growth has been a key focus for Pallet Consultants over the last five years. To achieve that balance, Pallet Consultants CEO Gus Gutierrez always maintains his deep commitment first to serving the customer, as well as to both challenging and supporting the team members who make it all happen. A key partner in the process has been Automated Machine Systems (AMS) as Pallet Consultants has developed and redesigned facilities across the Southeast.
Gutierrez explained, “Over the last five years, we have focused on mostly blue-chip companies.” He continued, “Our strategy has been centered around anticipating customer growth and understanding market conditions in each individual location where we expand. Market research coupled with increased inventory, trucks and supporting resources has proven to be a winning formula.”
Today, Pallet Consultants is one of the largest regional players in the Southeast and has extensive recycling partnerships throughout the country with leading recyclers. The company has expanded its capacity to meet growing customer demands while improving efficiency throughout its operations. Three keys stand out in terms of the facility designs: flexibility, simplicity and analytics. Currently, Pallet Consultants operates plants or on-site operations in Georgia, Florida, Alabama and Louisiana.
Gutierrez said that every piece of land and building is different in terms of footprint size, utilities placement, and unique challenges. “You have to look at the property or facility first to determine what you can do to create the best material flow. We tend to lean towards crossdock operations so that we can quickly sort and move pallets.”
Gutierrez commented, “The automation that we have put into all of our facilities, – and Haines City, a 23-year-old operation, will be the newest one to roll out in the first quarter of 2018, it is going to support the strong growth in the Central Florida corridor.”
On average, Pallet Consultants can produce about 6,000 pallets per day at each facility. The company has now in total across five facilities about 257,000 sq. feet of warehouse on 37.2 acres.
AJ Cheponis, director of sales and marketing for Pallet Consultants, “One of the things that really makes our company stand out is our flexibility. We can adapt to customer needs in terms of sizes, special designs, delivery schedules, logistics, etc.”
Gutierrez commented, "We have some of the best general managers in the business, and it wows me every day to see them continually focus on being better than we were yesterday.”
General Process Flow
Remember that Pallet Consultants sticks to three major concepts in its facility design – simplicity, versatility and analytics. Simplicity comes into play by having an open design to easily facilitate movement from one dock to the other. This allows for efficient unloading, sorting and reloading with minimal storage as customer demand sometimes dictates.
Versatility is something that Pallet Consultants has had to work into its systems sometimes after the fact. Gutierrez explained, “Previously in Jacksonville, we used a rented facility, and it wasn’t set up efficiently. So, we bought a 54,000-square-foot facility on six acres and redesigned everything. Six months into using the building, we started landing substantial customers that required specialty pallets, and we weren’t set up to process those efficiently. So, we had to completely change the plant layout.”
Now, plants are designed with versatility when it comes to pallet sizes, orders and delivery schedules. Versatility is achieved thanks to a blend of automation and manual processing. Sometimes the company will handle loads differently based on the customer requirements.
For example, pallets are sorted coming out of the trailer if the load has more than 25% ready-to-go pallets. Otherwise pallets are sorted on the repair line and workers are given financial incentive to handle this task. Stacks of pallets are placed by forklift at each repair station. A technician takes the pallet from the stacks and inspects it to see what needs to be done. Repairs are made using hand tools. Rental pallets and those needing to be dismantled are processed on separate lines.
Repair personnel attach a barcode on the pallet and place the repaired pallet on a conveyor line. The pallet travels down the conveyor, and an AMS scanner scans each barcode to identify which of five stacks to place the pallet. This is where the data analytics comes in for the operation. The scanner ties in with the AMS PalMate enterprise resource planning (ERP) software designed to keep track of production counts, payroll and piece rate reimbursement, repair ratios, etc.
Data Analytics Drives Efficiency
Pallet Consultants has moved from manual tracking of inventory, pallet repairs and other crucial numbers to automated data capturing and analytics using equipment from AMS. Gutierrez explained, “ PalMate helps us to develop real-time data and information that is accurate and provides a clear view of our business from production to payroll to key business metrics.”
The bar codes are used to track production, payroll for piece work and tell the system into which stacker to place repaired pallets. This approach is used at every facility except the Pompano Beach headquarters.
Budget constraints pushed the company to use a more manual approach to payroll at this location. Gutierrez admitted that he wants to automate every facility because it provides real-time data, improved analytics and saves labor costs.
The ERP software also makes it easier to coordinate multiple locations and customers. Gutierrez said, “We take inventory twice per day, and the AMS automation assists in this process. Electronic records from PalMate are tied into our P&L analysis. PalMate gives us visibility among facilities and customers to better track the counts from each load.”
Gutierrez added, “Our customers don’t just get compensated for their purchased pallet. They get a full tracking report that indicates quantities, conditions, etc.”
PalMate software is used for control of in-house inventory, pallets that are repaired, accounting, weekly sales, payroll, overtime, piece work compensation, inventory, repair ratios, pallet load tracking, etc. It provides instant information compared to older forms of record tracking. Gutierrez said, “Real-time information generated by PalMate helps us get a jump on problems right away vs. identifying issues two weeks later as was common with older forms of tracking.”
Although Pallet Consultants does receive some electronic orders, that process is not tied in PalMate. But it could be since PalMate offers online ordering and other advanced sales functions. Pallet Consultants uses a color code system (red, yellow and green) to make it easier for managers and the foreman to identify trouble spots.
When it comes to key business metrics, Gutierrez looks at a few key numbers. He said, “I look at how many pallets produced per employee and the weekly cost per facility. Those numbers are key. There has to be an appropriate spread between average cost and sale price.”
Building Challenges Require Strong Supplier Partners
Pallet Consultants has faced challenges with its growth to build new facilities and retrofit existing ones. Gutierrez commented, “We are putting facilities in Florida and other hot markets, so land comes at a premium. You have to make the most of every square foot that you have.”
The current locations are Pompano Beach, Atlanta, Savannah, Haines City and Jacksonville. But each one is a bit different in terms of the building design. Gutierrez said, “We construct the budget around our needs. And we gave AMS a shot at our corporate headquarters facility in Pompano Beach. And AMS delivered in terms of meeting our deadlines and production goals.”
Gutierrez added, “All of the purchases were done by remodeling an existing facility or new construction. Being on time and always delivering value to our customers has been a key factor in our success. That is a big reason we chose to partner with AMS. Secondarily, it is good to have one supplier for all of our facilities when it comes to parts and service.”
The right level of automation was important for the success of these facilities. Automation helps to boost productivity while limiting strain on employees. It also develops a system that can drive a strong quality standard and production efficiency. Cheponis stated, “Labor has its challenges based on the market changing continuously. Our labor pool is shrinking, and anybody who thinks they can do this business without automation, they aren’t honestly facing the same situations that we are.”
Cheponis added, “I just don’t think it is possible to have a large recycling facility of the quality we demand without some automation. It helps us produce a more consistent product while boosting productivity and creating a better place to work.” One thing that stood out to Cheponis has been the quality of the AMS machinery. He said, “The durability of the AMS equipment has shown us that we selected the right partner.”
Each facility has its different challenges. For example, in Haines City, Pallet Consultants has been working inefficiently due to the layout of the plant. So, the company decided to build a new customized structure to support crossdock flows.
The goal is to develop turnkey operations where everything is operational on Day One. And AMS has been a crucial partner to ensure the proper design of the facility. Gutierrez added, “AMS worked with our general contract to coordinate details like the electrical and utilities being in the right place so that it is under the slab and not hanging from the roof…They’ve got it together at AMS.”
Process Equals Quality Control
Getting an order done right the first time is essential at Pallet Consultants. Gutierrez explained, “Our repair lines have a three stage QC process. It begins at the repair line before the stackers where a visual inspection is done on each pallet. Later in the process, a supervisor will inspect each stack before they are moved into inventory. Finally, the forklift driver inspects each stack for anomalies before loading onto trailers for delivery. Our people care to get it right”
Gutierrez said, “We do inventory twice a day, every day, and we are very focused on managing pallet flows and ensuring quality.”
The AMS PalMate helps assist with this process to ensure the right pallet gets delivered. Gutierrez suggested, “Our motto is simple. Give the customer what they want when they want it.” He added that some people don’t know that we can deliver anywhere in the Southeast within 24 hours of notice. We focus on responsiveness.
The company is called Pallet Consultants because it does more than just produce and sell pallets. It provides full consulting and management services for both regional and national customers. Cheponis stated, “We fit in a very unique place. We are big enough to handle large accounts, and yet small enough to give accounts the real attention that our customers deserve.” For example, Pallet Consultants can offer customers electronic pallet transfer to different regions with its software, inventory and network. This reduces the amount of logistics and transportation costs. The company also helps companies comply with sustain-ability goals by offering environmental solutions, scorecards and assessments.
Gutierrez explained, “Customers want to show green benefits of recycling. We can help identify the number of pallets kept out of landfills, recycled, and repurposed. We provide Green Sheets with basic information about the company’s environmental impact.”
Also, being a certified minority-owned company can help us land accounts and assist customers in meeting minority sourcing requirements. Some of Pallet Consultants’ strong growth has been due to the can-do attitude of its sales team as well as its manufacturing team. From logistics support and complete package design to recycling solutions for cardboard and plastic, Pallet Consultants will do a lot more than just pallets. If you have a logistics or packaging challenge, they want a crack at solving it. For example, the company moved $348 million worth of inventory for Sysco – and fast.
Gutierrez recalled that the customer needed it moved in 56 hours to help establish a new distribution center. Gutierrez said, “We did it all in 30 hours with over 400 trailers in rotation. Pallet Consultants coordinated the entire process, hired truckers, rented trailers and got the workers there to make it happen… Sysco was definitely surprised and pleased with the results.”
Cheponis summarized, “This is a company that puts our customers first, and right up there with the customers, we value our entire team who serve those customers. Sure, with so much expansion, it can be hard to focus on plant optimization. And yet, consistently, one of our main mantras is, “ ‘Build it Better, Build it Faster and Make it More Cost Effective.’ ”
Through the entire process, AMS has been a valued partner helping to focus on both room to grow and efficient plant layout.
Questions to Consider for Plant Redesign and Construction
1.) What is the size of the lot and the buildings? Can these be expanded or not in the future? What facility constraints do you have?
2.) What is the flow of inbound and outbound material?
3.) How much inventory will you need to be able to store?
4.) What electrical, plumbing, heat and other utilities are needed to support the operation?
5.) Is the land ready to go? What type of landscaping and land prep will be required?
6.) Why did the old plant fail? What can you do to answer those challenges?
7.) Is the current design flexible in terms of walls, support pillar locations, dock doors and material flow, etc.?
8.) What bottlenecks exist in terms of material flow or equipment production capacity? If one part of the line is down for more than 10 minutes, how does that impact everything else?
9.) How do you balance different production focuses in a plant? For example are you both recycling and making new pallets in this one location? Those tend to be different and sometimes competitive functions for resources, space and personnel.
10.) What is your budget? Most plans go over budget anywhere between 10-25% or more.
11.) What is your go date and production timelines to finish the facility? Is this date truly realistic?
12.) How do changes to the structure impact building code requirements?
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