The Importance of Calculating Per-Pallet Cost

The Importance of Calculating Per-Pallet Cost

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Cost Per Pallet

Cost Per Pallet

Any successful pallet business must keep a careful eye on the bottom line, calculating a per-pallet cost to remain competitive. Kamps is no exception. Our company continues to identify key performance indicators and measure precise costs in economies with rapidly fluctuating prices, including the costs of:

  • Labor
  • Supervision
  • Lumber
  • Fuel
  • Equipment
  • Machine costs
  • Rent and upkeep of facilities
  • Taxes

In addition to calculating raw costs, Kamps also measures on-time deliveries and scrutinizes the quality of our pallets (in terms of defects per million). This allows our sales professionals to provide quantifiable proof of Kamps’s superior products and service. It also allows our plant managers to recognize sales and cost trends and make adjustments in real time, on the floor. As Kamps has facilities in a number of states throughout the Midwest, and costs vary in each region, the more specific the data, the better their decision making can be.

This same data allows management to scrutinize all of Kamps’s processes: building pallets, repairing and dismantling pallets, delivering pallets, and collecting them as well. It is difficult to improve efficiency until the weaknesses and lag times within the system are apparent. The collected data assists Kamps in standardizing our best practices throughout all of our plants for better performance.

Surveys of pallet companies have often revealed areas for improvement. For instance, recycling of pallet wood has not always been a primary concern, but pallet manufacturers operating in the current wood-scarce environment learn to modify pallet composition, search of new sources of wood, and eliminate any type of waste. Additionally, rising energy prices and labor costs and increased regulation act as a motivator. These past few years have been interesting, to be sure.

While it is perhaps cliche to say that “Knowledge is power,” it is, nonetheless, true that the more information Kamps has about our own workers and our own facilities, as well as what challenges all pallet companies face in the current economy, the better it is for our business. And the end result of better decision making is less expensive processes and better service – which we can then pass on to our customers. So everyone wins.

By: Mitchell Kamps

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