Viewpoint from Amanda Merrell, Seegrid's Marketing Director
Palletized goods are transported throughout manufacturing plants and distribution facilities 24X7. Pallets are dropped, lifted, and pushed across the floor,they get some serious beating. Pallet damage often results in product damage and unsaleable merchandise. In the 2008 Joint Industry Unsaleables Report: The Real Causes and Actionable Solution, the Grocery Manufacturers Association (GMA), Food Marketing Institute (FMHI), and Deloitte reported that 2007 industry survey data shows manufacturers’ unsaleables rates range from 0.4 per cent to 2.64per cent, averaging 0.83 per cent of gross sales. Retailers’ and distributors’ unsaleables rates range from 0.24 per cent to 2.78 percent, averaging 1.21 per cent of gross sales. The report shares an example of what this data means for a 5 billion dollars manufacturer and retailer. Unsaleables for a manufacturer represent a cost of 41 million dollars on average. Unsaleables cost for a retailer before reimbursement is 60.5 dollars million on average. Wow!!!!
So the question is, how can a facility manager reduce pallet and product damage for their operation? Answer: Automation, also known as automated guided vehicles (AGVs).
automated guided vehicles reduce pallet and product damage
When automated guided vehicles are used to transport palletized loads of goods, a reduction in pallet, product, and infrastructure damage occurs. Removing the operator from the forklift or pallet truck automatically eliminates the decision making process from all aspects of transportation. When an automated guided vehicle is used to transport product versus a fork truck operator, palletized product is moved reliably, safely, and in a consistent manner.
The use of automation, such as automated guided vehicles eliminates:
Industrial equipment damage
Pushing pallets across a facility floor
Improper pallet loading and unloading
Unstable and unsafe transportation of loads
According to Susan K. Lacefield, Associate Managing Editor for DC Velocity, “Pallet damage can add significant cost and waste to your supply chain. And it is not just the cost of repairing or replacing the pallet itself; you also have to factor in the expenses your company will incur if the product loaded on the pallet is damaged as a result.” DC Velocity reports the main cause of pallet damage is mishandling by forklift operators. Read full article
I spoke with a few facility managers about their experience with pallet and product damage. One manager shared how they handle product damage in their facility. If damage occurs for a few units in the palletized load, it is either sent back to a repackaging facility for repack or donated to the food bank. For example, if two bags of flour are damaged during transport, a repack facility may combine the two bags into one saleable unit. This facility manager shared that on average per week, 5,000 dollars is lost due to product damage. This loss equates to over 260,000 dollars annually.
Companies utilizing automated guided vehicles for pallet transportation should consider using high-quality pallets from companies like GMA, CHEP, PECO, and iGPs. Quality pallets will ensure pallet loading by the automated guided vehicle operator is seamless. Companies utilizing severely damaged pallets will not experience productivity and efficiency gains at the same rate as companies utilizing quality pallets.