What is palletization? What are the advantages and disadvantages of palletization? How did palletization come about? This article will be discussing all you need to know about palletization and the advantages and disadvantages of palletization.
Palletization is a process of formulating and packaging goods in a pre-determined size and layout. To palletize simply means to put items on pallets. Palletizing allows for a better metering of each good and can conserve space in the warehouse. It is also a way to reduce inventory levels.
History Of Palletization
What Is Palletization?
Palletization is the logistics process consisting of placing goods together on top of a pallet to optimize the space used. Additionally, the product is loaded onto a pallet according to its weight and volume, to maximize the use of space.
This gives management control over movement methods, as well as long-term inventory storage and retrieval.
The concept of palletization has its roots in packaging, although pallets were used early on in transport. The development of the forklift allowed for stacking boxes on top of each other and moving them around with greater ease – essentially creating an assembly line for different processes within a warehouse facility.
Palletization came into full-force during World War II (1939-1945) and was used to expedite material transfers. Dotted staples were introduced in order to fasten items together, and various materials for transportation purposes were all boxed together on a pallet.
With the post-war boom, the use of palletization was adapted for consumer goods and products. The fact that goods could be easily moved and stacked on top of each other made the process highly efficient for the booming industries.
Furthermore, the U.S. Military is credited with introducing palletization to Europe in order to suit European conditions and fit into their road transportation system.
From the Second World War to the beginning of the 21st century, pallets have been established as the main element in the supply chain, expediting product movements in phases such as goods receipt, storage, and delivery.
The use of pallets became more popular in the 1960s when businesses started to demand a more efficient system for inventory management and transport logistics.
The first use of pallets in a warehouse setting was likely at the beginning of the 20th century, probably due to the use of plywood pallets. These were first popularized through railroad systems, particularly by the intercity railroads that followed standard gauge track.
Plywood was used as the base of the pallet and wooden slats were used for laying goods onto this plywood.
The problem that arose during this period was that the goods were not able to be stacked on top of each other, and the goods that were laid onto the pallet were very susceptible to movement.
In addition to facilitating transportation, the purpose of palletization is to protect the merchandise — from the start of its palletization to its destination — maintaining the product in perfect condition until it undergoes its next logistics process or reaches the end customer.
There are many ways that palletization can be implemented, but few that are fully successful. The standards surrounding palletization are that in order to be successful they must be based on three main factors:
1) Store-level ordering – This is the basis of most of the success in palletizing. The ability to have all merchandise ordered offsite keeps costs down and allows the organization easier access to their supply chain.
2) Warehouse-Level Ordering – It is important to keep in control of the inventory within the warehouse. This is done by having warehouse staff count pallets they are using on a regular basis. Reports are created and used to send orders to storage, trucking lines, etc.
3) Road freight – the primary purpose of all logistics is that it moves product from Point A to Point B. Road freight is needed to move pallets from their point of origination through the delivery process and finally stores dock for pickup by customers.
Now we have had some knowledge about the history of palletization, let’s move forward to the advantages and disadvantages of palletization.
Advantages And Disadvantages Of Palletization
Here, we will be looking into the advantages and disadvantages of palletization but firstly, we will talk about its advantages and later its disadvantages.
Advantages Of Palletization
Some of the advantages of palletization includes:
1. To Improve Efficiency And Control In The Supply Chain
Generally, palletizing provides companies greater control over supply at a particular time and place. Pallets allow for a product to be stored in one area during one process, allowing for better tracking and inventory management.
In addition to reducing costs associated with storage, palletized products allows for an increase in material density without adding additional storage space. This is beneficial because it allows businesses to decrease stock holding that they otherwise would have had to maintain on hand.
2. Reduced Shipping Freight Costs
Palletization helps businesses to package goods and vary their dimensions in order to save on shipping costs. The use of pallets allows for a reduction in the overall amount of product space required while maintaining the same amount of shipments.
This is beneficial because companies can save on shipping costs, which can be high as 10%-20% of the total cost of products and materials.
3. Improved Safety For Products And Operators
Palletization helps businesses to improve the safety of their goods. In this method, products are stacked on top of each other to provide exact dimensions for transportation. This means that the product’s exterior dimensions do not change during transport.
It also helps businesses to avoid causing injury through cross-contamination by other products while they are being handled and transported. This also prevents the product from getting damaged, which could lead to a lost sale.
4. Inventory Control
Palletization provides businesses with a way to control inventory levels by optimizing in-house storage space and at the same time decreasing the amount of material required for storage. This allows companies to avoid the need for storage expansion, which can be costly.
It also allows businesses to reduce their order quantity and therefore the number of products they have on hand at any one time.
Disadvantages Of Palletization
Some of the disadvantages of palletization includes:
1. Environmental Factor
Palletization can have a negative effect on the environment. While the building of pallets can be very efficient, the manufacturing of pallets from wood can be very environmentally unsustainable.
The amount of natural resources used to make pallets such as tree and plank for example, is higher than what would be required to make other forms of packaging. It is estimated that 10-20% of all solid waste produced in Europe is palletized materials.
Furthermore, when these materials are discarded they may end up in landfills where they present a significant threat to wildlife and contribute to greenhouse gas emissions.
Palletizing can add to the cost of a product. While it may be necessary for companies to spend more money for the more efficient packing of products, there are ways to reduce this cost.
Companies can save money by using other materials that would have been used in the manufacture of a product that is now packed on pallets. For example, cardboard packaging, Mylar film and plastic covers all have cheaper alternatives that palletizers could use as an alternative material for packaging their products.
Furthermore, companies can use less expensive products such as paper and cardboard packaging or thicker plastic covers instead of thick plastic boxes which would contribute to their reduced costs.
3. Lack Of Standardization
Palletization is not standardized. Companies use their own size pallets and each company can have a different size or shape of pallets.
This can be problematic because a company trying to transport goods from one company to another may need to make adjustments in their containers in order to ensure that the pallets will fit into their cargo hold.
Companies must therefore make sure that they are transporting goods for companies that use the same type of pallets.
Obtaining the correct equipment is also more expensive because companies must purchase equipment which will fit the size and shape of its pallet.
4. Inadequate Documentation Of Products
Palletization can cause a lack of documentation with regard to the product. For example, it is not possible to know where a pallet comes from or where it goes to.
Furthermore, there is no record of the weight and contents of each individual pallet. It can be impossible for a company receiving goods on pallets to tell whether or not there are any products missing or damaged within that shipment.
Palletizing products can be very beneficial to businesses. It reduces product storage, increases material density and helps companies to improve their inventory tracking and control.
However, this process does come with a set of disadvantages which should be taken into consideration for the sake of each company’s environment, sustainability and costs.
Businesses can also benefit by having an in-company training and education program to help them manage their time, resources and materials more efficiently.
It is important that companies pay close attention to the types of pallets they are using, as not all companies’ products will fit on the same sized pallets.
The main aim of the article is to give you a clear understanding of what palletization is all about. Palletizing methods can be advantageous as well as disadvantageous in nature.