When Supply Chains Break: Your Emergency Pallet Sourcing Survival Guide
Manufacturing operations grind to a halt when pallet shortages strike unexpectedly. The Coronavirus disease (COVID-19) reaches the rolling hills outside of Philadelphia and the mills are shut down left and right. And, an earthquake in Chile disrupts global pulp supply, which kicks all latent U.S. pulp production capacity into high gear, causing industrial-grade lumber in east Texas to disappear. These are all things that could – and have – happened. When your regular pallet supply suddenly vanishes, having an emergency sourcing strategy isn’t just helpful—it’s essential for keeping your production lines moving.
The Reality of Supply Chain Disruptions
The pandemic-era supply chain shocks (including pallet shortages in 2021) taught companies the importance of resilience. Manufacturing companies across industries have learned that supply chains, logistics, materials and/or procurement always keep shipping and supply issues top of mind, but many still lack concrete emergency plans for critical components like pallets.
For most companies, dealing with pallets is just one headache after another – from service delays to quality issues to questionable vendor practices and more. With everything else they have going on, businesses simply can’t afford these non-stop interruptions. This reality makes emergency preparedness even more crucial.
Building Your Emergency Pallet Strategy
Successful emergency pallet sourcing starts with proactive planning. Step 2 is to diversify the supplier base and develop relationships with multiple pallet yards. If you are a manufacturer and use 20,000 pallets a year or more at an individual site, you should be able to split the volume 50/50 or 60/40 among two different mills. This approach provides immediate alternatives when your primary supplier faces disruptions.
You want two different physical yards with two different owners. This protects against fire, bankruptcy and pricing policy. You also want these two different suppliers to be in two different markets or geographies. Geographic diversification ensures that regional disasters won’t eliminate all your sourcing options simultaneously.
Standardization: Your Secret Weapon
One of the most powerful tools for emergency sourcing is standardization. Standardization allows you to simplify supply and support one geography from another. Take a client that uses 48×48 pallets in multiple locations on the East Coast, for example. Over the years, these pallets have been standardized and run on all the machines in all the different manufacturing plants. So, if there is a breakdown of supply in Philadelphia, pallet stock in Atlanta can be shipped north to quell the emergency.
This flexibility becomes invaluable during crisis situations. The option to supply individual plants by diverting the supply of sister locations increases your resiliency. When working with reliable suppliers like pallet kings, standardized specifications ensure you can quickly pivot between different sourcing options without compatibility issues.
Advanced Emergency Sourcing Tactics
Beyond basic supplier diversification, manufacturers should consider several advanced strategies. In the future, we expect more businesses will formalize their pallet contingency plans – such as maintaining a strategic reserve of pallets or qualifying multiple sources (recycled and new, multiple vendors) to avoid disruptions.
Group sourcing — which involves collaboration with other businesses, industry partners, or purchasing teams to make bulk purchases from pallet suppliers — is a great strategy since the increased volume through group purchasing gives businesses better leverage in the market. In addition, businesses gain access to a vetted list of suppliers. Unlike sourcing each individual supplier yourself, experienced partners will have extensive networks that enable you to compare pricing from a variety of suppliers.
Technology and Tracking Solutions
Modern emergency sourcing relies heavily on visibility and rapid response capabilities. It’s all about getting what you need, when you need it, where you need it. This requires comprehensive solutions, nationwide logistics, and a highly responsive team. Advanced pallet management systems can provide real-time inventory tracking and automated alerts when supplies run low.
In simple terms, pallet management involves the sourcing, maintenance, storage, tracking, and recycling of pallets used by a business. It ensures you always have the pallets you need, in good condition, where and when you need them.
Cost Considerations During Emergencies
Emergency sourcing often comes with premium pricing, but smart strategies can minimize costs. When demand for pallets is spread across many locations, factors like lead time (the first effort to acquire a good or service to the time of its arrival) significantly impact which suppliers can be competitive. It’s possible to attract better bids from suppliers by consolidating demand.
Consider flexibility in specifications during emergencies. To achieve that, first do a detailed specifications analysis. Is it possible to switch to used pallets? How about reducing heat treatment or moisture content requirements? While this may not suit all industries, options to modify specifications can maximize savings opportunities.
Preparing for the Next Crisis
The key to successful emergency pallet sourcing lies in preparation before crisis strikes. Take time to mitigate the risk of your pallet supply by incorporating strategies to be more resilient and agile. This will often lead to pallet savings too. Develop relationships with multiple suppliers, maintain strategic reserves, standardize specifications across facilities, and invest in visibility systems that provide early warning of potential shortages.
As the pallet buyer, are you ready for all of this? You haven’t been purchasing solely based on price, but rather on agility and resiliency, right? You have a backup plan in place, right? If you can’t confidently answer yes to these questions, it’s time to develop your emergency pallet sourcing strategy before the next disruption hits your manufacturing operations.