CASE STUDY No. 9618

KEY WORDS PALLETS, PLASTIC, IN-PLANT USE

Pepsi-Cola Bottling of Phoenix
4242 East Raymond Street
Phoenix, AZ 85040

Contact: Rick Kuelbs, Plant Manager. Tel: 602-437-7140.

Summary

In cooperation with one of its can suppliers, Pepsi now receives half of its deliveries of empty cans on plastic pallets instead of wooden pallets, eliminating 150 tons of wood pallet waste a year and reducing downtime and labor expense associated with wooden pallets.

Action

Since 1992, Pepsi-Cola Bottling of Phoenix has replaced half of its internal inventory of 44 x 56-inch wooden pallets with plastic pallets of the same dimension. Pepsi and the can supplier implemented the program after observing numerous problems associated with the delivery of can stock on wooden pallets. Slightly damaged or misshaped pallets sometimes splintered during automated unloading, interrupting production and causing substantial losses of new cans headed for the filling operation.

Pepsi asked its can suppliers to switch to plastic pallets, and one did. As a result, the plant manager reports: "Raw material losses resulting from pallet damage have fallen dramatically, labor to repair pallets for reuse has been reduced, and we have cut our production of wood waste by over 50%." He said the conversion from wooden to plastic pallets was easy and did not require any operational changes.

Payback

The conversion from wood to plastic cost Pepsi nothing except discussions and planning with its supplier; therefore, payback to the bottler was virtually immediate. For the can suppliers, the investment in plastic pallets was recovered in less than 3 years.

Pepsi lists the following specific savings:

  1. Labor cost to clean and repair damaged wooden pallets reduced by $3,000 a year
  2. Wood waste generation cut in half
  3. Production downtime (machine interruptions as a result of stoppage on the line stemming from defective pallets) cut from 10 hours a month to about half an hour
  4. Useful life of pallets extended to at least 3 years or at least 30 trips, at least four time the performance of wooden pallets

It's important to note that Pepsi-Cola Bottling of Phoenix is using plastic pallets only within its own bottling plant. The company studied but decided not to use plastic pallets for shipment of product outside the plant, citing a number of reasons. According to the company, plastic pallets are:

  1. Much more costly than wooden pallets
  2. Hard enough to retain and control within the internal system let alone permitting them outside
  3. Not yet in wide use outside and therefore something of a curiosity and collector's item, aggravating the problem of getting plastic pallets back.
 

 

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