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Precision Wood Products Prospers by Looking After Customers, Employees: Ontario Company’s Focus Is Specialty Softwood Pallets
Precision Wood: Ontario company prospers by looking after customers, employees; specialty is softwood pallets.
By Rick LeBlanc
Date Posted: 1/1/2007
CAMPBELLFORD, Ontario — The formula for success at Precision Wood Products is really quite simple, according to Doug and Lori Runions, the company’s owners. It boils down to looking after employees and customers, maintaining high quality of products and service, and focusing on manufacturing only certain types of softwood products in which it excels.
The formula has been successful. The business has grown 10-fold since its beginning in 1996. Doug previously worked in sales for another pallet company for about 18 months, but changes to his territory and commission structure led him to look at going into business for himself. The new venture started with three full-time and five part-time employees, including Doug and a partner who later sold his interest to Doug.
“We started the company with a few pallet customers, but our main jobs were pre-cutting lumber for the late F.L. Bodogh,” Doug recalled. After three or four years, they phased out the cut stock business in order to concentrate on the growing pallet manufacturing operations.
Doug knew nothing about running a manufacturing business or handling bills, so it was a huge step in the young company’s progress when his wife, Lori, came on board to take care of financial tasks. Lori had been a bank supervisor before joining the business.
Doug’s aunt, Donalda Runions, was a huge help financially at the start, as was Denise Tripp of the Bank of Montreal. The late Bill Thomlinson of Thomco Industries also was a help to Doug in getting the business going.
Today Precision Wood Products has a full-time staff of 30 employees and six part-time workers. Ninety-five percent of the business is generated from sales of new pallets, heat-treated pallets for export, to be precise. The company has a 10,000-square-foot building situated on two acres. It usually keeps an inventory of more than 1 million board feet of raw material.
Other family members are involved in the business. Doug’s father, Peter, works in the yard, scaling and unloading lumber with a Lift King forklift.
The company buys mainly spruce 2x4 and 2x6 from 40 inches to 16 feet long. Precision Wood also buys some 4x4 heat-treated Southern yellow pine to produce blocks for a Euro-style block pallet. All incoming shipments are assigned numbers to enable strict tracking of heat-treated lumber, and the company’s heat-treated pallets are certified by the Canadian Food Inspection Agency.
Precision Wood Products was only the 11th Canadian wood packaging business to be ISPM certified, and Doug is very bullish on the program. “ISPM has helped make our industry,” he said. The global phytosanitary rule for pallets used in export has spurred pallet suppliers to meet the challenges with a greater degree of professionalism, he suggested.
In the plant, material is moved with two other lift trucks, a Yale and a Hyster. Service on the forklifts and plant maintenance is performed by Doug’s nephew, Josh Adams. “A good maintenance man is worth his weight in gold,” said Doug.
Lumber is cut to the appropriate length with a Whirlwind cut-off saw and a new High Point Tools cut-off saw, both purchased from Bob Hanna in Missouri. Saw blades for both machines are purchased from F.S. Tool Corp. in Toronto and are sharpened by a local shop.
Precision Wood Products has two resaws, an older model Smith bandsaw and a 2006 single-head Morgan bandsaw. “Mark Morgan was very helpful to us when we were looking to upgrade our equipment in 2006,” Doug said. The company runs Wood-Mizer blades on the band resaws.
The company is equipped with a Hazledine plunger-fed notching machine, also purchased from Bob Hanna, and an old chamfering machine that Doug would like to replace in 2007.
In 2006 the company purchased four automated scissors lift tables. “These help tremendously on our cutting and resawing production,” said Doug.
Precision Wood Products manufactures a lot of specialty or custom pallets that are assembled by hand with pneumatic nailing tools. Fasteners and nailing tools are the Stanley-Bostitch brand.
Standard size pallets are assembled on a GAP 960 nailing machine that was purchased in 2004 from Harold and Sonny Pope of Piedmont, Ala. “This machine has been nothing short of fantastic,” Doug said. The GAP nailer is equipped with Stanley-Bostitch pneumatic nailing tools and uses Stanley-Bostitch collated fasteners. Specialty fasteners are sourced from Falcon Fasteners of Toronto.
Heat-treated pallets usually range in size from 18x18 up to 120x120. Production normally ranges from 1,700-2,000 pallets daily. Customers represent such industries as chemicals, food, plastics and pharmaceuticals.
Wood waste is burned as fuel in an outdoor furnace that heats the building, and some is given away to local residents for firewood. Sawdust and wood shavings are sold to local farmers for livestock bedding.
Precision Wood Products is an active member of the Canadian Wood Pallet and Container Association and the National Wooden Pallet and Container Association.
Just-in-time service is a key component of Precision’s customer service. Finished pallets are stored on-site for four or five of its largest customers in order to enable the company just-in-time service. Deliveries are made with the company’s three tractors, eight enclosed vans and a flat deck trailer.
Lori likes to say that Doug is the boss at work and she is the boss at home. It is a formula that has passed the test of time. They have known each other most of their lives and have been married for 24 years. Both are 43.
Before going into the pallet industry, Doug had worked for Parks Canada on the Trent Severn Waterway. Lori began working in banking after graduating from high school.
Family and a rural lifestyle are important to the Runions. Both still have their parents, and Doug and Lori each has three siblings. Doug also considers Lori and him lucky to have three grandparents to provide “good sound advice.” The couple enjoys outdoor activities; Lori’s interests include gardening and fishing while Doug likes golf, hockey, hunting and fishing.
Doug oversees day-to-day operations and also buys lumber. Some key employees include production coordinator Terry Johnston, who has over 20 years experience in the pallet industry. John Glenn and Len Ibbotson are shift foremen. Also working in the office is Leah Wells, who handles the receptionist’s duties and prepares daily production reports and monthly business reports. Jason Duguay, the company’s sales representative, has been with Precision Wood Products for several years. “He has had a lot of experience cutting lumber and building pallets,” Doug said, “so he is able to pass all his knowledge on to our customers.”
Most customers are developed by ‘cold calls’ or referrals. “With it being a very small industry, good words travel as fast as bad,” Doug noted. “We want to give our customers what they want, and when they want it, for a fair market price.”
The company operates on two shifts, with employees rotating between shifts every two weeks. Employees are evaluated every six months. Most workers earn hourly wages although employees assembling pallets by hand are paid according to a piece rate.
Employees who have been with the company for three months are eligible to participate in the health insurance program. Precision Wood Products also awards bonuses and incentives several times a year, depending on the company’s profitability.
“Our employees are everything to this business, not only producing, but doing community activities as well,” said Doug. One employee, Don Beavis, has raised over $20,000 for a local hospital. Employees have donated supplies to a food bank and Christmas presents for the Salvation Army. “They are always willing to do something for the community,” said Doug.
One worker’s girlfriend visited Africa in 2006 as part of the Africa for Aids Awareness Mission. After being put in charge of organizing a 30-team soccer league, she discovered that she only had three soccer balls. Doug and Lori shipped her 75 soccer balls to help get the program up and running.
Precision Wood Products sponsors a number of events to build teamwork and camaraderie among employees. For example, this year the company sponsored its 8th annual employee golf tournament. “This is one of the big highlights of the year for all of our employees,” Doug noted. “All of our suppliers generously donate fantastic prizes.” The company holds an annual Christmas party with a potluck supper, and employees receive a Christmas bonus and also a cake on their birthday.
These kinds of investments in employees and a policy of open communication have resulted in low turnover and absenteeism. For example, Roy McDonald, the first employee, is still with the company. He is a sawyer operator and runs an outside forklift on night shift. Two employees have worked five years without missing a day.
Precision Wood Products also enjoys a good safety record. “Our accident rates or compensation rates are second to none in the country,” Doug noted proudly, “with no lost time in over seven years.”
“What we do, we do well,” said Doug. “We don’t try to do everything, only what fits into our operation. We don’t do any rough material. We don’t do hardwood, and we don’t run recycled pallets through a new pallet operation. We do very little ½-inch material. What we do well is build heat-treated spruce pallets out of 2x4 and 2x6.”
Doug and Lori were proud to see the payroll reach the $ 1 million mark this year, a reminder that they are providing good jobs in their community. “This is the most rewarding because
He and Lori have worked hard to build a business where every employee plays a key role. In large part, Doug noted, the company’s success comes from its good rural background and a strong Christian community. “We wouldn’t be as successful as we are without hard working employees,” he said.
As Doug and Lori like so say to their employees, “If there was a ‘Pallet Olympics,’ we might not win all the gold, but we would bring home the most medals every time.”