Pallet Logistics of America Looks to Automation and Efficiency Gains in Face of Tight Labor Market: HUB Industrial Is a Critical Supply Partner
Growth through Transition: Pallet Logistics of America has become one of the largest players in the Mid-South and is growing into the West. A supplier relationship with HUB Industrial has helped streamline the company’s approach to consumables. It is a test site for the new Inventory IQ System.
By By Rick LeBlanc
Date Posted: 7/1/2018
Transition and growth have been on the agenda for Pallet Logistics of America (PLA) over the last few years, and the company is looking to efficiency gains to compete in a tight labor market. Working with HUB Industrial to better manage consumables is one way that PLA is trying to do more with less.
Having evolved from a merger of AAA Pallet and Pallet Supply of America back in 2007, Dallas-based PLA has grown to become a significant presence in the U.S. pallet industry. It now has operations across Texas, Oklahoma, Arizona and California. The company offers both new and recycled pallets, as well as a mix of GMA and custom sizes.
Held and operated by a private equity firm led by Jim Schwab and Robert Sullivan since 2007, the group sold a majority of its interest to another private equity group in 2016. The company has also expanded into California and Arizona with the purchase of Valley Pallet, and is now led by Larry Snyder, formerly Pallet Logistics of America (PLA) vice president and general manager.
The Growth of Pallet Logistics of America
Today, PLA, has a significant geographic footprint and product mix. “On the West Coast we do a lot of new,” Snyder reported. “In Oklahoma and Texas, we are mostly recycled. We have a pretty good balance between GMA and custom, company-wide. Some of it requires new lumber, some of it doesn’t.”
According to Snyder, the number one challenge facing PLA is labor. “As you know, we are a labor-intensive business, and access to labor is more and more challenging and more and more competitive,” he said. “Like anyone else facing this problem, we are looking for as many ways as possible to improve our processes through automation or additional and more efficient material handling equipment to reduce the amount of manpower it takes to do the job.”
PLA has made several investments in equipment. They include several sortation and automated repair lines from Smetco and Industrial Resources of Michigan, as well as sortation systems from PRS. PLA runs Viking nailing lines at some facilities. It works with Kiln-Direct for heat treatment, with almost every location having a kiln and some having multiple units.
When it comes to equipment selection, Snyder stated that PLA takes an open approach. “We have a little bit of everybody,” he said. “Part of it is understanding who brings what and what supplier offers the best value. They are all tools, and you have to find the right tool for the job.”
Inventory IQ Systems Adds Control, Streamlines Stock Management
One tool that is helping PLA improve its efficiency is the Inventory IQ System from HUB Industrial. PLA has become one of the test locations for HUB’s newest invention. In 2017, HUB approached PLA with a solution it believed could help better control consumables by tracking employee usage and minimum/max reorder levels and assets.
The Inventory IQ System allows access only to authorized employees, monitors individual usage, as well as other benefits. It can be used to auto-generate or prompt re-orders when inventory minimum levels are reached. For years PLA has purchased gloves, safety glasses, safety equipment and consumables such as paint and strapping. PLA now also purchases band saw blades from HUB.
Access to the storage locker is restricted. A popular way to obtain entry to the cabinet is through the biometric scanning of an employee’s fingerprint. Facial recognition and other options are also available. Once an employee is recognized as being an authorized user, the doors can be opened. The person scans the barcode associated with each item taken, which appears on a display screen. If an employee changes his mind or scans a barcode in error, there is an undo barcode. There are also several cameras mounted in the storage cabinet to capture the details of the transaction.
Snyder stated that HUB’s Inventory IQ helped his company put controls in place. “We were able to set mins and maxes on our inventory,” he said. “We can send orders over directly from the system. It really helps us not to over order things or not be overly reactive when we run low on items.”
HUB initially recommended maximum and minimum inventory levels based on order history, which were subsequently adjusted as needed. While the flexible system allows for automatic reorder, PLA has not yet fully released it to automatic. The recommended order is sent to the shift manager to approve and send out.
PLA also uses the Inventory IQ to control its nail usage. “It helped us put controls on our nail usage,” Snyder reported. “Nails aren’t something we buy from HUB, but they allowed us to use their inventory control system.”
A second Inventory IQ storage cabinet is located in the maintenance department to help better manage the issue of nuts, bolts and other small parts. Based on the success of Inventory IQ, the company is looking at installing it next at its Salinas, California location.
The Importance of Partnerships
“PLA has been a great partner over the last eight or nine years”, said Sam Lacey of HUB Industrial. “We strive to find the best solutions for customers through our core items, while expanding our offerings to meet the needs of clients.”
For band saw blades, for example, Lacey noted that HUB does everything from welding to shipment. “We are the only supplier that backs up band saw blades with a two-for-one guarantee,” he said. “If a blade breaks, we replace it with two. It shows how confident we are about our product. No other supplier in the industry offers that.”
As an example of extraordinary customer service, on one occasion, Sam Lacey took a three-hour flight to deliver a box of band saw blades to a PLA plant that found itself in a crunch. “He earned himself a little loyalty there,” Snyder quipped.
HUB also offers a circular blade sharpening and shipment program. It even worked with one customer to find the best chop saw blade solution for cutting pallet blocks.
“They’re a great company,” Snyder said. “They have also recently gone through an acquisition, and I haven’t seen anything negative come out of that. If anything, their capabilities have increased since they were acquired.”
Over the next two to five years, Snyder stated that PLA is looking to make every position as efficient as possible, incorporating automation where needed, and trying to reduce the amount of manpower required to do the job. Making the move to Inventory IQ has allowed PLA to do just that for managing its consumables.
A Career in Pallets
So, how did Larry Snyder ascend to the top spot at a large regional pallet company? He came to PLA over a decade ago, after almost nine years in the industry. “After serving in the Marines, there was a company named CHEP – you may have heard of them,” Snyder said wryly. CHEP recruited him to come to Atlanta to work in its logistics department, scheduling trucks and other duties. He then went on to manage plants for CHEP, selling pallets and other activities for CHEP. He decided to leave the rental giant and was eventually talked into going to work for the company that later became PLA.
“And after I turned them down a few times we eventually agreed on some terms so I came to work for them doing sales,” Snyder said. “I went quickly into running a plant and then ran a division for them. Now, I run the company.”
Snyder has developed a reputation for order and precision in his leadership style.
“My time in the military had a large influence on my leadership style overall,” Snyder commented. “I do run the company in kind of a military fashion with a clear chain of command, and clear instructions. I think that’s important in any leadership scenario. The last thing you want is for someone to be not really clear on what they are supposed to do.”
Besides the labor crunch, the greatest challenge today is dealing with the tough lumber market. Snyder lamented, “The recent tariffs and drama between the United States and Canada as far as softwood lumber goes has definitely affected our businesses across the country. Prices are at an all-time high, which is a challenge as we are trying to pass these prices along to customers.”
Managing costs is as important as ever, and that is why strategic supplier partners, such as HUB, are so important.
Do you want reprints or a copyright license for this article? Click here
Research and connect with suppliers mentioned in this article using our FREE ZIP Online service.
Growth through Transition