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MATERIAL PACKING AND HANDLING

12. Ensure Sustainable Consumption and Production Patterns

Procure wood pallets through a pallet pooling supplier

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SDG Alignment

Target Description

Level of Effort

UN SDG Target

12.5

By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse

2

Category Assessment

Assessment

Q

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(1) Conduct an internal assessment to determine the pallet requirements:
- life cycle of pallets in your business by mapping out the purchase, logistics approach, and disposal processes.
- cost per pallet including volume of purchases, disposal costs, and investigate pallet usage.
- pallet supplier contracts and certifications.
- pallet specifications (such as type of material used, weight, load capacity, % recycled or refurbished, structural design).
(2) Calculate the footprint of your wooden pallets using this EPA certified calculator.
(https://www.naturespackaging.org/en/tools/carbon-calculators/)

Related Links:
(Carrano, Andres L, Thorn, Brian K, & Woltag, Henry. (2014). Characterizing the carbon footprint of wood pallet logistics. Forest Products Journal, 64(7-8), 232-241.)
(Anil, Sebastian K, Ma, Junfeng, Kremer, Gül E, Ray, Charles David, & Shahidi, Shirin M. (2020). Life cycle assessment comparison of wooden and plastic pallets in the grocery industry. Journal of Industrial Ecology, 24(4), 871-886.)
(https://www.researchgate.net/publication/285640628_Characterizing_the_Carbon_Footprint_of_Wood_Pallet_Logistics)

Opportunity

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Business:
Pooling of pallets will work as savings by removing disposal cost, reducing stock-out risk, and optimizing the usage of pallets. Additionaly, part of the analysis should include the optimization of weight of palettes used for your product load. Consider the procurement of lower weight pallets, as this will translate into reduction in cost and carbon footprint.

Sustainability:
Use of wooden pallet pooling approach, is the most sustainable pallet procurement strategy on a large scale basis.

(Bengtsson, Jonas, & Logie, James. (2015). Life Cycle Assessment of One-way and Pooled Pallet Alternatives. Procedia CIRP, 29, 414-419.)

Strategy Build & Execution

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(1) Evaluate the market with an EOI that includes encouraging the current supplier to consider the potential of starting a local pallet pooling system with their customers and your company as the pilot initiative.
(2) Include a change management strategy in the EOI and take into account the implementation costs.
(3) Consider the cost and environmental benefits of a local pallet sharing program (decreased transportation costs and order turnover time).
(4) Award contract and track the value created.

Supplier Negotiation & Contract

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(1) Consider working with a supplier to build their capacity to create this circular economy (pallet pooling system), and leverage this business creation in exchange for a discounted rate.
(2) Agree on the quality and maintenance accountability and responsibility, quality management, turnaround time for orders, and the opportunity to sell/receive credits for contributing excess pallets to the system.
(3) Leverage connections to the market through negotiations by including a clause with discounted rate or benefit received from marketing the pallet sharing pool to other vendors.

Supplier Performance & Management

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Perform annual Supplier Relationship Review (as supplier relationship is vital for a successful closed loop system) and required for sustainability reporting in annual reviews. Maintain records of turnaround time, paper quality, purchasing and warehousing cost, average inventory level, and inventory variations.

Perform an internal review after change has been implemented to evaluate commercial impact of pooled pallet use, and environmental impact of such a pallet pool system.

Resource Links

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