• Ingredients/materials/packaging from suppliers are shipped into a production facility on wood pallets
• The goods are removed from the pallets to enter the manufacturing process, often being placed on plastic or metal pallets as they become packaged products
• The packaged products are then loaded back onto wood pallets
• The wood pallets are shipped out never to be seen again

The awkwardness of this process seems obvious. Changing from wood to plastic or metal back to wood adds time, labor and expense. Plus, the manufacturer has to invest in two separate assets: wood pallets and plastic or metal pallets. One asset — the one-way wood pallets the finished products ship on — is an unrecoverable expense with questionable utility. Current good manufacturing practice (cGMP) states that the use of wood — especially chemically treated wood — should be minimized or eliminated inside a pharmaceutical manufacturing facility. 

Plastic pallet rental
Within the past few years, an alternative model has become available to take steps out of the process, make it safer and enable predictive cost-control of pallets within the supply chain. By using rented pallets via a plastic pallet pooling network, the expenses of purchasing, maintaining and replacing pallets is eliminated. The pallet pooling model allows pharmaceutical companies to utilize a plastic pallet throughout their supply chain, not only eliminating the costs and inefficiencies detailed above, but reducing the many risks associated with wood.

Here’s how it works:
     
• Clean plastic pallets are dropped off at the pharmaceutical manufacturing facility
• The pallets migrate downstream through the company’s internal network
• The same pallets carry the finished product to the final customer
• Once the pallets have been emptied, they are picked up by the pooling company

The pharmaceutical manufacturer relinquishes all responsibility for the pallet upon shipment to authorized customers. The company only pays for the time the pallet is within its possession. The pooling company works with the pharmaceutical company’s end customers to recover the pallets.

This type of program allows the pharmaceutical customer to utilize a plastic pallet and all its benefits for a price competitive with its current pallet spend. The rental program alleviates the headaches of pallet management: managing an internal pool of cGMP compliant pallets and constantly purchasing one-way wood pallets.

Health and safety
Perhaps the most important benefit of plastic pooled pallets is removing potential product contamination. Wood is often treated with toxic chemicals to repel pests and fungus that will nest in untreated wood. Wood containing these chemicals has found its way into wood pallets. In addition, wood is inherently absorptive, and liquids can easily seep in, leading to the growth of pathogens such as Salmonella, E. coli and Listeria.

Plastic pallets require no treatment for pests or fungus, they are non-absorptive and there are no cross-border shipping issues with plastic pallets as there are with wood.

Track and trace + temperature monitoring = safe, secure product
Radio Frequency Identification (RFID) technology has made tracking product shipments much more effective and reliable.  Pallets carry a unique serial number that can be read in various ways. To maximize the efficiency of the rental program described above, these electronically tagged pallets are integrated into the customer’s warehouse management system.

The product “license plate” can then be tied with the pallet’s unique identification number, creating a unitized load. This establishes a framework for tracking and tracing loads throughout the supply chain. The tracking technology enables companies to reduce lost loads, theft and enables swift and accurate recalls when necessary. There can be complete accountability throughout the chain.

For perishable items, tracking inventory and managing handling throughout the cold chain is critical. There is now temperature monitoring technology available that can be integrated with track and trace. It provides pallet-level temperature monitoring of perishables in-transit with on-demand information for real-time decision-making. This breakthrough enables FEFO (First Expired, First Out) inventory management to reduce shrink and optimize the shelf-life of perishables.
Pallet technologies have taken a big leap forward in the past several years allowing pharmaceutical companies to deliver a safer product to consumers.

ABOUT THE AUTHOR

Rex Lowe is president of iGPS. A relentless innovator in the field of shipping and logistics, Rex has made a profound impact on how goods and services move in the modern economy through technological innovation and operational breakthroughs in the field. For more information, contact Mr. Lowe at This email address is being protected from spambots. You need JavaScript enabled to view it. .