Identifying Success Factors in the Wood Pallet Supply Chain

Pallets are a critical component of logistics infrastructure. Approximately 1.9 billion pallets are used each year in the United States for transportation of goods, from raw materials to finished products. Solid wood pallets represent 90% to 95% of the pallet market. To run their operations, wood pallet companies deal with suppliers, customers, and other supply chain components. Each of the steps is important to deliver the right products, with the required quality, and in a timely fashion. However, there is little research about the industry’s supply chain practices. The objective of this research is to increase the understanding of the U.S. wood pallet manufacturing industry, its supply chain management practices, and factors affecting the supply chain management processes. To accomplish the research objectives, a nationwide mail survey of wood pallet manufacturers was carried out. In total 1,500 companies were sent questionnaires and the response rate was 14%. A model for supply chain success factors was developed based on previous research and was analyzed using the results from the survey. Results of the survey provide an up-to-date profile of the US wood pallet industry. It was found that pallet production per company was 727,229 units on average during 2009. Out of the 1500 respondents, 38.6% indicated they were medium-sized companies (20 to 99 employees) and 53.9% small companies (1 to 19 employees). Thirty five percentage of respondents indicated that their sales were less than one million dollars and 43% from one to five million dollars. Also, 45% of respondents were involved in pallet recycling or repair, and these companies indicated that, on average, 42% of the material in a recycled pallet is, in fact, new material.