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Is Your Pallet RFQ Leaving Money on the Table?

Rick LeBlanc

Editor, Reusable Packaging News

More often than not, pallet buyers are just trying to get the best price and service provision possible for their existing pallet specification. It makes sense. After all, purchasers are typically tasked with buying a range of supplies, of which pallets will be just one or a few of the SKUs in their spend category or procurement portfolio. You have an existing pallet specification. Why not just run with it? However, there are some things you might wish to consider first. At Advance Lumber, we frequently come across this issue and are happy to offer our thoughts.

Pallet RFQ: Cautionary Notes

There are many reasons why, at least occasionally, you should consider more than a straightforward RFQ (Request for Quotation). Let’s consider the shortcomings and recommend a path forward.

1. You Might Not Currently Be Getting What Your Paying For

Consider that the pallet you are currently ordering might already differ from your written specification. If your current supplier is delivering a lesser pallet, they will have a cost advantage on a competitive bid that is not “apples to apples”. And it is not necessarily nefarious. Over the course of years, informal agreements may have been between your operations people and the pallet provider to deliver a lower grade pallet with thinner boards or stringers that has been discovered through experience to work for your application, but which might not have been updated in your official pallet specification.

2. Your Business Has Changed But Your Pallets Haven’t

There is a lot to dive into on this point. Things are changing across a great many supply chain that can have pallet design implications.

Possibly your product mix has changed, or ti hi quantities. If you have customers asking you to put more on a pallet or less on a pallet, you might be spending too little or too much, respectively.

Perhaps you have new products that are resulting in pallet overhang and risk of exposed product to damage, or have changed your secondary packaging that might benefit from reviewing the top and bottom deck board placement to ensure products are optimally supported.

It is also likely that your company is continuing to invest in new material handling equipment such as racking, pallet conveyors, or other automation, for example, that might no longer work optimally with the old pallet specification. Consider too that the legacy delivery process (vehicle type, stack height, time of delivery, etc.) might no longer be the best for your evolving operation.

Similarly, we can’t make the assumption that other company locations have the same challenges. If your business has grown by greenfield expansion or M&A activity to acquire new locations, different products, processes and material handling equipment might not optimally fit with your legacy pallet.

3. Your Customer Requirements Have Changed

Just as your product mix, secondary packaging, material handling equipment and processes have changed over time, what’s going on with your customers? Perhaps changes of their own have made the existing pallet suboptimal. If the disconnect is significant, you’ll hear about it sooner than later. But consider that customers often suffer in silence. Many are skilled at developing hacks for nagging problems. It’s the wrong size for the racking sysen so they designate a spot on the floor for it. Or if it is a smaller pallet they double it up on a 48×40. People on the front line are very resourceful, but is that the best utilization of resources? Pallet fit can often be overlooked as a customer talking point, but occasionally it is good practice to make it one.

Pallet RFQ: A Better Way Forward

With a traditional RFQ, you might be succeeding in getting the best price for the wrong pallet. A better approach can be to shortlist potential bidders, and invite them to visit your operation on-site. Through inspection and dialogue they can confirm you are currently using your official specification and that the existing pallet is still best for you. You might discover that pallet redesign is the best path forward. At Advance Lumber, we are here to help you on your journey.

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