Is your company suffering from pallet loss? Maybe a couple pallets get left behind when a supplier sends them back, a few are forgotten behind a retailer’s store, they are being used for an in-store display, or perhaps thieves make off with a few more. Whatever the reason, losing a couple pallets here or there is a common problem, in fact it’s expected to happen, but when these instances start to add up it can lead to serious operating cost increases.
When pallet losses go from inconvenience to cost debilitating
It is unreasonable to expect that every pallet that goes out the door will be returned to your company, sometimes they break during transport and accountability mistakes are bound to occur, but when your shipping supply losses creep up toward 10% it’s time to take a look at where the loss is occurring and what can be done to minimize the cost.
Most pallets are lost due to honest mistakes or oversights…Maybe your products were diverted to an offsite warehouse due to storage limitations or perhaps your products were damaged and had to be rerouted. Often times, when the shipping routine is disrupted your pallets get misplaced and “lost” due to a lack in accountability. The first thing to look for in identifying your pallet loss problem is where the losses tend to be the highest and if there is a common contributor.
Implementing a pallet accountability policy
It may be time to start holding staff, suppliers and/or retailers accountable for the pallets and shipping supplies you loan to them. A simple pallet-out and pallet-in accounting system has been found to be the most effective, where customers are charged when pallets are shipped out and credited back once they have been returned. The implementation of this accounting system varies greatly and is often dependent on the amount and value of the shipping supplies at stake. Some companies are successful with simply recording the pallets in and out with a pen and pencil, but technology is available to make the process more precise. Some companies use bar codes and scan each pallet in and out, while larger companies take it a step further and label pallets with RFID chips.
Even the most effective tracking program is going to fail without support from suppliers and other participants involved in the shipping process. It is important to have a conversation with all your partners to discuss your expectations of when and how pallets should be returned, as well as the fact that lost assets increase cost across the entire supply chain. If the cost savings of recouping pallets and other shipping supplies is significant, you might consider sharing some of the savings with your partners to encourage buy-in.