Recently, China purchased large quantities of pine. There is now a stranglehold on that product. Prices are going to go up and deliveries of pine are going to be few and far between.
So what should you do to keep your prices low as the price of wood continues to rise? There are three ways to achieve this goal:
- Communicate with your pallet vendor
- Optimize stock levels
- Review your production line
Contacting your pallet representative to review your current packaging may allow you to find new materials that could improve your finished product or save you money during the rise of wood costs. Some cost savings solutions are:
- Other species of wood available for less cost
- Deals on panel products that some companies may value as waste items. Sometimes companies that cut plywood and OSB to size are left with a “drop” or remainder of the panel. This drop may be purchased and pieced together at a lower cost than a full panel sheet.
- Improving the design of the pallet or crate to reduce the amount of raw material used in its design
Maintain an optimum stock level
Allowing your vendor to maintain an optimum stock level of material or product ready to be delivered to you is another way of reducing costs. If your vendor produces material on longer production runs, savings can be passed down the production line. Working with your vendor on production levels is a great way of building a partnership with them as well as reducing costs.
Routinely review your production line
- Can any wooden material be removed from your current packaging?
- Could solid wood be substituted for an alternative packaging item such as plastic or paper?
Often small changes such as a rack or warehouse system can open large savings for someone purchasing thousands of pallets. One of the easiest ways to review your production lines is to bring in a packaging specialist, like John Clarke or Kent Longardner from the Nelson Technical Center, and let them look over your facility. They will work with you and come up with options that could save you money.
How are the rising costs of wood affecting your business? Let us know by commenting below.
Post by: Jonathan Haynes, Nelson Sale Representative