Rotom Pioneers Transport Packaging, Rental Services and Pooling Solutions: Relies on Strategic Relationship with CAPE
Product Innovation: A leader in western Europe, Rotom offers a wide variety of unit load carriers beyond just pallets. And it has developed efficient manufacturing operations for pallets thanks to its relationship with CAPE.
By Chaille Brindley
Date Posted: 3/1/2018
Innovation drives success at Rotom, a large pallet and packaging company serving clients in nine European countries. From private pooling to specialty metal and plastic containers to full pallet management, Rotom has developed a reputation for innovative solutions beyond just providing quality pallets. A key partner in its success is a strong relationship with CAPE and its automated nailing lines for producing custom pallets.
Rotom does not produce any standard Euro pallets although it is one of Europe’s largest companies in repair and recycling of EPAL pallets. Arjan Kuiper, CEO of Rotom, said, “Rotom produces in the Netherlands 600 different pallets and packaging and related products… It’s a big variety compared to many other pallet manufacturers.”
Rotom offers pallets and containers made of wood, plastic and metal. It contracts with another business that makes metal transport packaging products, like roll cages.
With annual revenues around US $120 million, Rotom has created a strong position serving the manufacturing, wholesale DC and the 3PL sectors. And it also services institutions, such as hospitals and government agencies for specialty packaging, such as containers, racks, carts, etc.
Kuiper explained, “Rotom provides logistics solutions, not just a single product or service… Our aim is to offer a wide range of products that are used in the supply chain to transport a unit load. If it’s not a load carrier, it doesn’t belong in our business.”
Rotom has 15 facilities in nine countries with at least one in each country. Based on demand, Rotom can scale up and add depots with business partners if the need arises. “A strong international presence is one of our core advantages in the marketplace,” added Kuiper.
Versatile Automation Allows for Efficient Production, Lower Cost
Rotom invested in a new CAPE Mach 3D nailing system for its Netherlands headquarters location to keep up with production requirements for customers. “We have some customers that are demanding a high volume of one-way pallets...To stay in the wooden pallet market for this quality and quantity, we needed to invest in high quality equipment” said Bart Welten, sales and marketing manager.
With 2-3 workers, the new CAPE system can produce 320-340 pallets per hour, up to 4,500 per day in two shifts.
Customers frequently defer ordering pallets until they need them, and the capacity of the CAPE machines allows Rotom to respond quicker to customer requests. Changing to a different pallet on the new CAPE nailing machine can be accomplished in as little as 15 minutes if it is just a change to a different size. Setting up the machine to a different type of pallet can take 2-2.5 hours.
The new CAPE system features a number of robot-equipped stations. For example, a robotic arm lifts pre-assembled decks onto the nailing machine and drops them into place over blocks to assemble a block-style pallet. (At the start of the assembly line, blocks are being cut automatically and being staged and loaded into the machine.) After the mats are nailed to the blocks, the pallet is turned over inline by an automatic flipper to finish assembling the bottom face. Another robotic arm drops the perimeter deck boards and center deck board of the bottom face into place, and the pallet advances to another nailing station to fasten them to the blocks. The finished pallet advances a short distance, is turned 90 degrees, and goes through an automatic branding station. It advances after being branded and is flipped over so the top face is up, and the pallet is stacked automatically.
Robotics can increase flexibility, reduce the labor needed as well as the wear and tear on operators.
“We’re glad we chose CAPE,” said Welten. “CAPE’s support is very good and responsive if needed…CAPE machines offer the ability for CAPE engineers to remote into the machine and troubleshoot most issues. This reduces downtime and improves overall reliability.”
Currently, Rotom runs two older CAPE machines in France and two in the Netherlands. These will be upgraded with robotics this year. Rotom also utilized the previously mentioned Mach 3D at its Netherlands headquarters location and has plans to install a new robotic line in 2019.
Kuiper added, “The Mach 3 offers high output and reliability while reducing the number of workers required for production. Also, the machines have been very durable for us.”
Logistics and Packaging Solutions
The tagline in Rotom’s marketing is facilitates your logistics. Beyond just producing a pallet, Rotom develops rental, pooling and management networks for clients.
For example, Rotom provides via daughter company 2Return services to recover and collect transport packaging — pallets and containers. The company uses Web-based software to track shipments. For some customers, the recovery service makes more sense than a traditional pooling service (CHEP, LPR, etc.), which is more attractive for businesses that ship on standard pallets.
Recovery services may be more attractive for a company that uses a custom pallet or container. Rotom launched its pooling services in 2016 and has seen considerable customer interest.
“The principle is to provide foldable (collapsible) returnable packaging where we can save customers on the return transport,” said Kuiper.
Rotom’s product line of transport packaging includes wooden pallets, plastic pallets, pallet collars, roll containers, storage systems, and metal boxes and containers for transport and storage. An affiliated business unit, 2Return, founded in 2010, operates independently from Rotom. Its focus is providing logistics services throughout the supply chain, including retrieval and return of transport packaging.
“We are working strategically. We need to be there (in the wooden pallet market), but the margins are relatively thin,” explained Welten. “Wooden pallet sales often enable Rotom to get our foot in the door of a new customer and to offer additional products and services.”
With more than 30 years in business, Rotom is always evolving and growing. The company supplies more than 10 million pallets annually to customers.
Last year Rotom began working with Hoza Logistic Solutions, a Dutch large manufacturer of roll cages for post and parcel, wholesale and e-commerce, before it had been purchasing roll cages from suppliers in China. Roll cages have increased in popularity in European supply chains in the past 25 years, particularly to move products from distribution centers to retailers. Over 60% of the European grocery markets uses roll cages or other transport packaging instead of pallets, Kuiper estimated.
Business & Labor Challenges
Customers want custom packaging to fit their needs. Rotom’s top 10-20 customers may require as many as 10, 20, 50, or 100 different types of packaging. According to Welten, customers in the Netherlands and Western Europe typically require more pallet sizes.
European companies, like American businesses, have difficulty finding and retaining good labor, according to Kuiper. The challenge of labor is spurring more automation.
“It’s absolutely a must to optimize (automate) and to reduce the number of workers,” he said. “Not because we want to pay less...but because it’s hard to find people. In the Netherlands, without laborers from Poland and the Baltics, forget it. We (would) have a (labor) shortage.”
Automation has become a necessity to solve the labor dilemma. But it also improves precision and standardization in terms of quality.
Rotom began as a pallet recycling business in 1981 when recycling was just beginning to take off in Europe. As the company grew, it added production of new pallets and pallet collection services, and now also offers pooling services.
The company has three departments for supplying wood packaging: one for producing new pallets and containers, another for recycling, and another for brokering pallet sales and obtaining them from other pallet manufacturers. Europeans refer to brokering as ‘trading.’
New pallet production is similar to the process in the United States where machines are used for larger runs while custom pallets and orders for small quantities are assembled by hand using pneumatic nailing tools. Production runs of 1,000 or 1,500 pallets or more typically will be assembled on automatic nailing machines. Pallet recycling operations also have some automation, such as conveyor systems and pallet sorting equipment.
Whenever Rotom supplies a pallet or container, it does an analysis to determine if it will make or supply the product in-house or buy the packaging from another manufacturer.
“A customer buys 10 items,” suggested Kuiper. Of those 10, two may be sourced from other suppliers, four may be new pallets manufactured by Rotom, and three may be recycled or refurbished pallets or containers. “A lot of customers buy both new and reconditioned.”
Rotom has grown 20% or more over the last three years. And the company just acquired another location in Europe. Rotom just bought Covepal S.L., a Spanish reseller of reused wooden pallets located near Barcelona. Due to this acquisition, Rotom adds a strategic location to extend its business in Cataluña.
Given all the labor challenges in the United States and Europe, growth in the highly competitive pallet market requires efficient production that can only come from automation. From its product line and services to its production processes, innovation has fueled the strong growth at Rotom. Finding the right supplier partner in CAPE has been a critical component of its strategy. For more information on CAPE in North America, visit www.prsgroupinc.com or globally visit cape.es. For more information on Rotom, visit www.rotom-europe.com.
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