Supply Chain Now Episode 285
For Episode 285, Scott and Greg welcomed Tyson Steffens with the Pallet Alliance to the Supply Chain Now Studio in Atlanta, Georgia.
[00:00:05] It’s time for Supply Chain Now Radio. Broadcasting live from Supply chain capital of the country. Atlanta, Georgia. Supply Chain Now Radio spotlights the best in all things supply chain the people. The technology’s the best practices and the critical issues of the day. And now here are your hosts.
[00:00:29] Hey, good morning. Scott Luton here with you, Liveline Supply chain. Now, welcome back to the show. Today Show. We’re going to be speaking with an innovative business leader that is leading intriguing initiatives in a very established aspect of the supply chain world. So if you think you know all about palates, stay tuned, cause you don’t. And we’re gonna be talking Pallot 4.0 on a very quick programing note. Like all of our series on Supply chain. Now you can find a replays where ever you get your podcast from. So we would just ask you to subscribe so you don’t miss a single thing. Okay, so we’re gonna dove right in today. Lu. Welcome and my fearless co-host on today’s show once again, the esteemed Greg White Serial Supply chain tech entrepreneur, chronic disruptor and trusted advisor. Greg, how you doing? I’m doing pretty good, very timidly.
[00:01:18] Fair to middling today. Yeah, Vegas makes me sick.
[00:01:23] Well, and we’re on the heels of a great reverse Logistics association show. Yeah, that was really good. We did more work than play for sure. And I think we’re despite my best intentions, we’re gonna be, what, 14 podcast episodes we’ll be releasing with with a wide variety of leaders from really across the Supply chain space, right?
[00:01:44] Yeah. Some great insights on reverse Logistics I think ties into what we’re gonna talk a little bit about today. And it is true. Palates can be interesting.
[00:01:57] Well, you know, and this finding one for our trip to Vegas. What’s interesting, what you tell Tyson about that. We don’t want to tell ourselves.
[00:02:05] But, you know, I think Palance is one of those things that that a lot of folks believe they’re working on, assumptions that have been around, you know, for generations or or years at least. And, you know, as with all other aspects of supply chain, the PAL industry is innovating and disrupting itself in many ways. We’re gonna talk about that today with Tyson Stefan’s principal of the Pilot Alliance. And Tyson is really involved in three main our areas, the business PELLANT Operations, Customer Program, Development and strategy. So good morning, Tyson. How you doing? I’m doing pretty well so far. Thanks. We are so glad you’re here in studio with us. We were looking at making a a remote interview here, but we love people being right here in West Atlanta with us. Now, you got some traveled the rest of week, too. I do. Mm hmm. Yeah, it’s great to be down here. Thanks. All right. So let’s before we dove into the pilot alliance and then before we talk about some of the really cool things, including the intel apparent development that I find intriguing. Let’s get to know Tyson better first. So so just like we were talking preshow, tell us more about where you grew up and give us the goods on your own. Some aspects of your upbringing.
[00:03:18] I grew up in a little town in Ohio called Newton Falls, about 5000 people really close to Youngstown. And, you know, a lot of my childhood was just spent playing sports, riding dirt bikes, running through the woods. What was your favorite sport? My favorite sport was football. And that’s good, because if you live in northeastern Ohio and it’s not football. No doubt. Yeah, you are punished for that.
[00:03:42] What position did you play? I was a defensive end and a outside linebacker. Okay. I can totally see that. I can’t. You can almost tell by his attitude that he is defensive. We’re going to ask him, do a sack dance after the show today. We’ll try to. Captain, I have a few of those, but I can’t believe you would want to see one.
[00:04:05] But, you know, I think a lot of my childhood that kind of led to where I am today as Israeli that we you know, we never hired anybody to fix anything. Right. So, yeah, we needed a pull bar. And so my dad just decided he was gonna build one. We had a pool. So all my friends were like, wow, you guys got a pool? You guys must have some money. And I’m like, did you see how it got built? Yeah. My dad paid a guy with the backhoe to dig the hole. And then me and my sister went in with hammers to kind of smooth it out according to his guidelines. And then we basically installed our own pool. Wow. So, yeah, this that was. Yeah. I didn’t know that that was unusual though. I thought as like a cool. Yeah. Gates is what you do if you want to pool build one. That’s right. And you know when I would drive uptown and lock my keys in the car, which I was prone to at about 17 and I would call home. They’d say, well I mean we only. A mile away, once you just walk home and get them. Then you’ll remember not to do that anymore. Hmm. How many times do you have to walk home? About three. Really? You’re a fast learner.
[00:05:13] So clearly we’re picking up on own, independent, self-sustaining. You know, don’t depend on others. Do it yourself. Is this kind of core values?
[00:05:24] Yeah, kind of. Be prepared to take care of yourself. And you know, it’s never been pretty. So it’s like it’s not like I’m I’m great at anything, but I’m I’m not really afraid to fail. Like the, you know, part of my mind, it thinks, okay, what’s the worst that can possibly happen? Okay. I can survive that. Let’s give this a shot like it.
[00:05:45] All right. So before we want to move into your professional journey. Right. OK. But before we do that, I’m curious, what is one restaurant or food item that as you grew up that you you couldn’t get enough of or you miss not getting now that that’s got to be chili dogs and chili cheese fries from the hot dog shop in downtown Warren.
[00:06:09] Okay. Yeah. He knew that. And every year I got the quarter as soon as you even just started to say it. I just pictured it. I was ready to roll. I will have. We’ll have that for lunch. All right. So let’s. It’s a long drive. Greg, we always enjoy kind of get to know the professional during a year or so. Let us talk about that. Yeah, well, first of all, I just I have to say this.
[00:06:32] I feel like palates are the base of everything in the supply chain. Mm hmm.
[00:06:38] Yes. Thank you. True. It’s true, isn’t it? I mean, if you think about all the palate have you received that didn’t touch a palate? Right. Very few items and all the palate. Guys loved to say that, you know, the world moves on palate. So. Yeah. Mm hmm.
[00:06:52] There you go. Well, so look, at some point you decided quit riding dirt bikes. Yes. And discovered that you were not six foot seven. So you couldn’t be a defensive end. Yes. Right. So. So tell us about your professional journey. When did you decide to get a J-O-B?
[00:07:09] You know, after college. Right. So where’d you go to school? I went to school at the University of Akron for chemical engineering. Yeah. So that’s, you know, Zipes pretty dry. Yeah. The most feared, Mascha. That’s right. The Zen college sport and the most feared major chemical in. Yes. Holy cow. Yeah. You’re your math is well above my pay grade. Yeah.
[00:07:31] And it’s funny because I always tell people and they’re like whoa you probably good at math aren’t Sheer.
[00:07:36] And I say, well compared to you probably, but compared to a really good chemical engineer, I’m I’m almost math illiterate. I started, you know, like I reached I reached my potential. Let’s say that. Yeah, that’s positive. I reached my potential chemical engineering school.
[00:07:53] So you graduated with a undergrad in chemical engineering and then.
[00:07:57] And then I went to work for United States Gypsum Company as a process engineer. And that was great. I went to work in southern Indiana. Not a lot different than northern Ohio in many aspects or any of the spots in between the two or in between. You know, very different in others. But it was a it was a great place to kind of have a very broad general engineering experience interacting with a lot of people that are on the production floor. So I’m not. Yeah. I can a a room with a 10 other engineers. My job is basically to provide technical backup and help to a production crew on a production line. So a lot of different everything from the guy that’s been working there for one week, an operator, one to somebody who’s got 35 years experience. That’s the general foreman and really knows how everything works. Right. And that was a great experience from the standpoint that I think one of the things that helped me learn is to appreciate what somebody does bring to the table. Don’t look down on them for what they don’t. Yeah. So some of the general foreman that I worked with to make the process better, I was shocked at how many things they didn’t know about the process. So from a science standpoint, they didn’t necessarily understand how the line actually worked. And when I would explain it to them, it was like their hair was just blown back. But once they understood that, they went out and they did new things. Wow. And improve the process that I could never do because I knew a lot about how it worked. But I didn’t I didn’t have those intricate intricacies nailed down internally to know where to go apply change. Yeah. So that was a great experience for me in that aspect.
[00:09:57] I think that dynamic is really, really valuable. The company is the people who know the practical aspects. Getting insights from the scientists and engineers and whatnot and vise versa. That interaction is really absolutely valuable. Yeah, that’s I mean, that’s game changing for a lot of companies. I mean, I bet you learned a lot about the practical aspects life.
[00:10:17] Well, yeah, I I learned a ton. It was I loved it.
[00:10:21] Well, there’s a reason why go into it again. BBA is such a thing, you know, because that’s the folks that know it best. Right. And I like how you appreciate that. I think, look, in my time, manufacturing, unfortunately, we’ve all been in operations where the folks make it happen and are the best experts within the four walls often get overlooked for what they bring to the table. So that’s very refreshing perspective you have. And really, that’s where we should be today in 2020. And not managing like sometimes can be the case like it’s 1982 and folks are just they’re underappreciated and taken for granted. Sure. OK. So let’s move on past that was that process. What was your role there? Chips.
[00:11:05] It was basically a as a process engineer. And then I actually got promoted, although it was great. And I went to California as an operations manager. Free night states gypsum, which was complete culture shock. If you grew up in northeastern Ohio, why don’t you go to southern California? What’s where’d you go? L.A. or. Yeah, we were down. Plant was in Torrance, California, south L.A.. Okay. So, you know, when you kind of compare those two. I was shocked that I didn’t need a passport, you know, to make the trip. But again, that was great because it opened my eyes to a completely different world of of people and outlooks and more responsibility. Weather. Weather. Yeah, that was that was a great big glowing orb in the sky. It’s called the sun. Yeah. No more of that dish. Pan Sky and northern Ohio. Right. I just wonder when another dish is gonna come down through the clouds, too. So. So you know that that was great. And I think one of the the biggest things that working out there taught me is a better connection to the employees. Many of the ploys. Let’s just not say many. None of the employees have the same background. I did. Yeah. And, you know, once they got to know you, you know, they would tell you a lot about how they grew up or where they grew up. And then they got interested where I grew up. And one of the guys said, hey, do you have any pictures of where you grew up? And I said, Woolshlager.
[00:12:36] So I brought him in some pictures that I had taken riding a dirt bike in central Pennsylvania. And he immediately goes, oh, my gosh. I said, What? He goes, look at all those trees. Right. Yeah. You know, but there. Yeah. The reality is that, you know, he’s he’s never really traveled past the the southwest. Right. He’s he’s never seen that many trees or to me it’s just like, well I mean what else would be there. Lili’s, you know. Right. It’s Cheesman ex-Beatle. So so that was that was something that I looking back on that I really enjoyed about hanging out there. What was that timespan? So from from getting out of college, I probably worked in southern Indiana for about two years. And then southern I’m sorry, southern Indiana two years and then southern California about three years. And then I just kind of decided that I wanted to not have to move around all the time. I think I finally got old enough to realize that I liked to travel and do things, but I need roots. Yeah, like I need a place that I can hunker down. And so at the time, I was living with my girlfriend and then in my fiancee and we decided that we’d like to move back east so that we could be closer to family and everything.
[00:14:00] Entries, yeah. Entries, all those trees. And so what kind of came up is the the previous owner of the powder lines was rolling out a pilot program for U.S. gypsum and he needed some things done. And I kind of told him I’m probably going to leave pretty soon. If there’s anything you need done, let me know now. So I try to do it. And so he said, well, if you’re gonna leave anyway, here’s what I need done. And d-, do you think you might want to come try this pallet gig out? And knowing what he did. You know, I was I was I was intrigued. And it just kind of shocked me that that was. Enough of a thing that you could actually hire people to do it with you. And that’s what most of my questions are around, like, is it really that much work here? Isn’t it fascinating? What kind of businesses there? Yes, right. Yes. I was shocked. And so I went, you know, and I visited him in North Carolina. And, you know, we talked about what needed to be done and what were the next steps. And I thought, wow, this this could be a nice fit. How do you take the pilot business to the next level? I mean, were you having those kind of discussion? But yeah, in you way, one is amazing. Yeah. One thing I really give you know to Paul is.
[00:15:18] You know, Paul Paul was very good at. Taking whatever he was doing at the time and saying there’s a lot of stuff going on, but this is where my life is right now and I’m I’m going to jump in and I’m going to do the best I can. Whether that’s pallets, whether it’s playing music, whatever it was. So, oh, we would have a long, long, complicated conversations about pallets. And, you know, what could happen for big box stores if they looked at pounds this way instead of that way and manufacturers. And what if they did this and that and, you know, six, seven o’clock at night? You got to give me an example. Yea, I mean, what excites me about the depth of well, it’s about big box store on one of the big things that we we had always talked about is, you know, you have this natural flow palettes where you build a pallet, it goes to a manufacturer, it goes to a retailer. Now the retailers trying to figure out how to get rid of it. What do I do with it? Right. You have a recycling stream and you get a place like maybe if you I don’t know if you carry, like, building products. They come on odd sized pallets. You get brand new 18 year olds trying to work a forklift. So you get a you got to teach him how to get it.
[00:16:30] You get into the gym, how to handle all these different. Let the record show that Greg just raises spoke with operate you, you know, and they’re trying to figure out how to do this safely.
[00:16:39] While a natural thing would be to have the retailer establish a pilot program for them, send the pallets that they want to handle, that they know we’re safe out to the manufacturers and let those come back to them, because that is the natural flow. They’re going to come back. Right. And, you know, of course, you know, if you if you knew somebody like myself, I could take care all that for you. Yeah.
[00:17:04] So what what I’m hearing you say and correct me if I’m wrong, is rather than a reactive, it’ll fiddle that type of approach to palletized and using pallets in your operation. We’re talking about a smarter, holistic, proactive strategy when it comes to moving stuff effectively and yes, without damage. And in a way that makes operators it easier for new operators and even established seasoned operators, forklift operators and an otherwise to move stuff, right?
[00:17:34] Yes. And when you think about it, that happens a lot in other aspects of the supply chain, people sharing informational platforms and whatnot. But when it comes to pallets, we’re still kind of handling buying pallets like we did in the 1950s. Love it. Okay. So now that’s a great segue way and I want to cut you off again.
[00:17:54] Okay. Sorry, I got to ask this. I know this is not a natural topic to have curiosity about, but I have a feeling our listeners are going to appreciate this.
[00:18:01] So how many sizes of pallets are there? Just ballpark. Oh, gee. I mean, you can build custom pallets. So up into the thousands. I don’t know. Now, most of your pallets are one standard size of 48 40. Okay. And then there are a lot that are seen very often 48 squares, 42 squares, 36 squares and other sizes. But, you know, we literally have some customers that they’re making products per order that are custom and they’ll call us. And there’s just measurements written down. And everyone, you know, then goes through this process to be designed and shipped out. And in their product list, we probably have 200 different sizes just for them.
[00:18:46] Measure twice, cut once. All your customers. We tried to do it in that order. All right. So let’s talk about the power lines. Okay.
[00:18:54] So first off, tell us about what the organization does and kind of what the problems that you and your team are helping solve.
[00:19:03] So as an organization, what the power alliance is doing is we basically help companies by completely managing their pallet spend. So you have a purchaser, a purchasing team that looks around and they come to the realization that they may spend $25 million on packaging, but oh my gosh, we’re spending $15 million on pallet. Right. And they realize that although at least one of them is very adept at all of the things they buy. Nobody knows anything about pallets. And they get caught in a trap of quoting pallets to manage the spend. But what happens is somebody undercuts the price to get the business and then they slip in margin and then they quote it out again and they think everything’s going well. And the tip off to me is when somebody says, you know, I I don’t really think you guys could help us because I quote these out every, you know, two or three years, I say 5 percent every time I’m like, oh, wait, let me let me do the math, because eventually you get to zero.
[00:20:12] If you say so.
[00:20:13] You’re telling me you’re paying 17 cents a pallet like good job, fantastic. You should win some sort of purchasing award. So. You know, that’s that’s not the best way long term to do it. And so what we try to help people get to is to start at the beginning. What most people in our space would do is ask you, well, what do you use? And then they just go quote it out and try to find it cheaper. Size wise, you mean. Yeah. Yeah. Somebody’s up for. How is it designed? How is it, Bill? We’ll try to duplicate it at a cheaper price. So the first thing we’re going to do is say, why are you using that? And we’re going to start at the beginning to make sure, you know, are you using the right kind of pilot? Is it designed properly for your load and your equipment? Do you have any product damage? Do you have any problems you wants to take care of while we’re in this process? So what we’re not we’re not really concerned so much about the actual price of the pallet. We’re concerned with the overall cost. The palletized. So once that pallet is on your loading dock and it’s prepared to leave, how much does it cost you to get to that point? Because there’s often times where we can spend a little bit more on the pallet itself, but streamline the process, streamline SKUs or changeovers that employees have to make that we can still reduce the overall cost, the palletized.
[00:21:42] So it goes well beyond just how much you paying for that pallet that you’re looking at the operation. You’re looking at something much more broader. Not put words in your mouth, but it is part of things you’re measuring when you’re kind of assessing operation. You know, some of the pallets it may have been using for years may not be working as well as you think. And it may be leading to too damages or. Yes, mishandling and whatnot.
[00:22:07] Right. Yeah. In in kind of going back to the comment about purchasing pallets in the 50s is that if you ask them why are you using this pallet? You usually get a shoulder shrug and we call it the old Joe design and they’re like well old Joe in the back told us this is what we should do. And in a works usually, but it’s usually overbuilt and you could pull a lot of wood fiber out, which is the main cost of a pallet anyway. So that’s really what we’re kind of helping them do. You know, some of our customers, what we help them do is extend that supply chain to their vendor. So, you know, for somebody like United States gypsum, we have a a set design for them to meet safety requirements that they want to meet. Well, what we’ll do is we’ll provide that exact pallet, that spec manufactured under our supervision to their vendors so their vendors can ship in on it. So now instead of pulling the product off of the pallet and putting the pallet in the scrap heap. Now that pallet gets logged into inventory and we’ll get used, goes back to another vendor or whatever.
[00:23:13] So you’re telling me. You’re doing engineering of pallets.
[00:23:20] I mean, if you’re taking out wood-fired in and assuring safety to me, that tells me you’re doing some sort of analysis and engineering to say that is a sufficiently safe and structurally sound pallet with less wood fiber and cost involved.
[00:23:34] Yes. And you know, the pallet engineering. I know. It’s scary, right? Wait, wait. We have a guy. Amazing. We have a guy, Joe. You know, Liegghio or. No, no. This is young Joe. Joe. Yeah, he’s younger than me, which means he’s getting up there, but he’s still younger than me. And, you know, people, they love it when we’ll go visit somebody and they’re like, well, what you know, what do you really do, Joe? And he’s like, just think of me as a palate scientist. And they’re like, whoa, you know, it’s there has got to be a t shirt for that.
[00:24:06] True. But I think we’re gonna make. Well, I think he should.
[00:24:09] I want you know, I think part of the reason is I’m understanding what you all do is, is if Joe gets hit by a bus, there’s a comprehensive solution and process behind what he or or Jane or whomever beyond their tribal knowledge of accumulated. Yes. Years, right?
[00:24:27] Yeah. And that’s right. And you, Neal, and part of that package is not just making sure that what you’re doing is correct and making sure that you’re getting the best price you can. Is that we’re going to create a paper trail and you’re going to have a reasons behind what you’ve done. So one of our customers, they they had a problem. And what their problem was, is they felt like they saw a lot of problems happening with injuries and in big box stores. And they said, you know, that’s a lot of exposure and we realize all of our pallets. Are of different designs, even though they’re carrying the same product and their general counsels like that screams either negligence or simply don’t care because you haven’t figured out which ones, right. So what we did is we standardized the design. There’s a paper trail of why it’s that design, why that design is right in wherever that design varies. There’s a reason why it varies. So if they ever should have an accident, they could call us up and say, hey, can you explain to these people why we did what we did? Wow.
[00:25:42] And you. You mentioned in in the warm up analytics. So you use a lot of analytics. Do your customers get a feel for how much you’ve saved them in reducing product damage or limiting liability or anything like that?
[00:25:59] Yeah, they do. And that’s that’s one of the aspects of our programs is that we get very close to the customer and we say, OK, not now that we’re now that we’re doing business together, let’s get all the information out there. And they basically treat us like an internal purchaser. So, you know, if if you hire Linda to be a purchaser, give give us all the information you would have given Linda. And we’re gonna sit down and where we’re going to map out all the costs and we’re gonna see where we’re doing better, maybe where there’s not as much improvement. Should we focus there as the Phase 2, should we not? But yeah, they comprehensively they they get a full report on how much they’ve saved because even though people tend to want to do things the right way when they have the ability. Right. Almost nobody signs up if they’re not going to save money. Right. Yeah. Right.
[00:26:53] So you can only manage what you measure. That’s right.
[00:26:56] So we promised to talk about Pallet 4.0 and you’re speaking to a lot of that now. But let’s talk about this exciting new development and tell a pallet, which is when we first met, you were the parent alliance was was launching that into the marketplace and touting the benefits. Tell us more about what the intel a pallet is all about.
[00:27:19] The intel, a pallet really is the ability to integrate the IO t connected supply chain into the wooden pallet infrastructure. So up until this point, there are people that have tracking solutions and they work. I mean, you go into you go into the tech sector. Almost any tech person can track something. I mean, they they that’s easy for them. Right. So but if you wanted to actually track at the pallet level, you were really restricted to plastic pallets. And you know, where a wooden pallet may cost $12, a plastic pallet may cost sixty five. And you may have material handling issues because there’s a different coefficient of friction on the deck of the pallet. Right. Plastic pallets are great pallets and they’re strong, but they’re strong in a different way than wood. So you may have to modify some of your material handling equipment. Yeah. Also, so about 95 percent of the pallet market is wood and that’s arguable. People say 98. Some people say 90. But a whole bunch of it is wood over.
[00:28:34] I think it’s safe to say 90 percent or more. Yes. Nine out of 10. And nine out of 10 pallets agree. They would love to be in and a pallet to say, I haven’t actually verify that. But, you know, so.
[00:28:48] So what our goal was, is that boy, wouldn’t it be great if you could have an iota connected pallet but not have to change all these things associated with going to plastic? Yeah. And so that’s kind of what we set out to do. And what we’ve been doing is we’ve conducted field trials with various connection technologies that have that have all been been great. And some of those field trials have actually aged out of being able to be called a field trial. And now we’re actually using the data for our own purposes to help us ascertain, well, how many how many trips does a pallet make in a year. And is there a lot of variation in how long that takes and what’s what is the life of a pallet in this particular program of sort and repair? So, you know, the next step, though, is to have that connection and that information available to actually the consumer of the pallet and even beyond that, maybe to everybody that comes in contact with it.
[00:29:56] So, you know, we kind of think of the holy grail of this would be, all right, we have this huge supply base that uses wooden pallets. They don’t want to change because that would be super costly. Right. But all of a sudden now they could use the same wooden pallet they have today. But now it’s Internet connected. So at their place, they are going to electronically combine what they’re placing on the pallet to the unique code of that individual pallet. That pallet can then leave its its custody connection of the manufacturing plant and then custody connect with the truck. So you can you can kind of follow it on the truck and learn from the truck to the distribution center.
[00:30:41] From distribution center to read. Tail, so and all the while it’s it’s recording what’s on it? It’s. Yeah. It has a record of what’s on it. And it can be recording various things. It can be it can be as simple as it’s simply checking in and out to let you know that you have custody, a custody of me. And these are the handoffs that have taken place. Right. If you’re looking for loss prevention, I’m sure a pallet of bourbon goes missing every once in a while. Exactly what I was thinking and I was I would like to know where it’s at.
[00:31:11] So I tell you where one is. All right. So let’s talk about Karl.
[00:31:19] Amp has been y’all’s partner, right? Yes. In the Intel, a pallet rollout and just just some background context for our listeners. This was new to me. This is the industry’s first turnkey I.T. enabled platform in Supply chain managed service. That’s in TEG integrated with wooden pallets. Yes. We’re talking about millennia. Feels like of using pallets. Is the first time all this has come together. It’s big news.
[00:31:50] Yeah. Yeah, we like it. Well, this I mean, look what you’re doing. Chain of custody, provenance, all of those. Those are two of my favorite terms dangling. I mean, you know, we keep talking about what is a valid use for blockchain. This enables the ability to to tie this into the blockchain, to create that that immutable record of the chain of custody of that product.
[00:32:18] Right. Yeah. And we one of the markets we we see for it making things easier as like cold chain farm, a trust dip, you know, items like that where you really you have a need to know it’s not something you would like to have. Right.
[00:32:33] Something you need to absolutely have to have. Right. Medical device, medical supply, all of that. Yeah.
[00:32:38] Absolutely. Yeah. And the other thing that I’ve gleaned from some of our pre-show conversations is, is this can apply to current wooden pilot programs. This is not they don’t have to overhaul everything they’re currently using, right? That that’s right.
[00:32:53] And you know, that that’s one of the things that has allowed us to. I feel like move quickly here and get field trials and going. Is that. The special thing about us, I think in the in the tracking world is that we’re part of the Pallot world. So we’ve talked to tracking guys before that have tracked pilots and they they take them and they you know, they take them on to the side and they get knocked off and pulled off and thrown away. And these people, they know what they’re doing. And but when they come in contact with the pilot world, it just falls apart. Yeah. And but we are part of the pilot world. And we understand the people in the pilot world. And we we know what they need to know to be able to pull this off.
[00:33:41] And that’s where working with so many manufacturers on so many projects, we could roll something out at scale pretty easily. If instead of a person in the tech area having to introduce themselves to 200 different pallet manufacturers, establish that relationship and figure out what they need to tell that person to be able to integrate the technology with the pallet manufacturer, that that’s a tall bill. I know a lot of a lot of folks in the pallet industry and I really enjoy. Because you want to talk about a whole bunch of different people.
[00:34:22] It’s the same car we got him as you being the production engineer and old Joe or whoever. Right. Knowing the detail of of how the production process works, it’s that same.
[00:34:35] So. Yeah. Yeah. What you’re using. Yeah. It’s it’s really similar and you know the the pallet industry. But you know, just because of the way I think it’s grown up, it it’s very fragmented. So some people estimate that there might be thirty five hundred. You have an say splintered. Yes you shouldn’t.
[00:34:53] I can tell by the look on both of your faces that you should not say that.
[00:34:57] So very fragmented. A lot of different approaches.
[00:35:02] Some smart approaches. Some different approaches. All points in between it. So Intel, apparently a big news is going to change in many ways how companies have been using pilots and their lack and their visibility of the Logistics and transportation and overall in Supply chain. Can we shift gears? Sure. We were talking preshow about, you know, you’ve been in so many you and the team Ryder in and out, in and out of a lot of different operations across different sectors, I believe. Sheer, is there one or two things that you might could share with our audience when it comes to, you know, the folks that I’m sure cause that we all know folks are listening probably in our family that believe they know everything about power. But, you know, I know you value yourself kind of as a as a value added consultant, whether folks are working with power alliance or not. That’s right. What’s one or two things that that you see regularly that might surprise folks?
[00:36:00] You know, I think the thing that we see the most that surprise purchasers are that the pallets that are outside in their parking lot do not match their spec that so they’re not actually getting what they think they’re getting. And I think a lot of times they don’t understand that it’s not as easy as going out and measuring one or two pallets because, you know, it’s a natural product. There’s a lot of variation in it. And if you if you invite me to your place and you say, hey, can you go out and see if this pallet matches the spec, I’m going to take various measurements on. Fifty a hundred, maybe a hundred and fifty pallets, because there’s no pallet maker that can get every board right. So what you’re really looking for is by knowing what cuts are supposed to be used and how those cuts are achieved is I’m going to look at the various measurements and ask myself, is it clear to me that this pallet maker is aiming for this cut? Are they trying to build the pallet that’s depicted here or it becomes clear that they are not so happenstance? Yeah, happiness, whatever. Yeah, exactly. And that, too, is sometimes it’s sloppy. It’s it’s a large variance in the size of the components. Sometimes it’s there’s no intent to make the right pallet. And I think that’s one of the I I feel that that’s one of the reasons. And boy, that funds a price that ringing now. Right. Is that a lot of pallet makers like working with us because we know what is supposed to be supplied and we will stand up for that. So if you your.
[00:37:42] Are you saying that there are companies out there that quote you, we’re going to build a pallet this way?
[00:37:46] And what you actually get is something different, something not less, right? Yes, something less than what was anticipated. You don’t have to say that, but I will. So they’re basically cheating these companies by quoting this and then delivering. Yeah. Of lesser quality. Right.
[00:38:00] Yeah. And that and that’s that’s not an un-. I think a lot of people in the power industry would say that that’s not an uncommon practice. So what happens is that’s why you have a lot of the really good mills have long relationships with customers because they find a customer that values not having to look over their shoulder all the time. Right. And they build that relationship and then they that’s intact for a long, long time. And and that’s that’s really kind of how we we go about things, too. We we’ll we always go visit a mill before we use them to supply a customer because we really want to see.
[00:38:39] Do you have the equipment that’s required to do this correctly? What do all of your other pallets look like? You know, generally of everything on your lot is just a train wreck. That’s probably what you’re gonna build me to, you know. But, um, sometimes we’re surprised. We’ve been places where things look crappy. And we will ask him to say, hey, this doesn’t actually look that great. Right. And they’re like, people never asked me to do a good job. They’ve asked me to a cheap job. If you want a good job, I’ll do it.
[00:39:06] I can do that, too. Yeah. And sometimes and sometimes they do. So, Scott, why do I imagine that there are people sitting out there going? I had no idea that pallet technology was this complex. I mean, this is it’s really interesting. But if you think about it. Yeah, I mean, it is it’s it’s. Yeah. Complex business.
[00:39:25] There’s just you know, there’s there’s nobody at the other end that has ever been instructed on how to properly go about buying a pallet, maintaining a spec and adjusting that spec when needed.
[00:39:41] There’s never been an alliance for pallets. That’s right. Until now. That’s right. We’re here. Well, you know, I I’m guilty as charged. I can tell you, despite our recent efforts, trying to find a pilot to pack up our mobile studio and get it out to Vegas. There are some things that I just took for granted in many ways. A big shout out to Allison Giddens for for saving my rear end. Well, and that adventure. But, you know, guilty as charged. Yeah, a bit of having been in manufacturing. I know for a fact I’ve taken for granted exactly some of things you’re sharing. And gosh, if you’re a facility that uses, you know, pallets in the order of dozens or hundreds and you constantly things are out of spec, no wonder the operation is struggling. The one two things are getting shipped places and getting damaged. No wonder. And pallets are coming unraveled because they’re not is. Yeah. You’re not getting what you think you’re getting.
[00:40:37] Yeah, exactly. And it really sabotages everything that comes after that because if the spec you have on hand is really a $13 pallet, but what you receive is a $10 pallet and you pay $10 for it every time you put it out to quote, the prices are coming back as $13 and you’re looking at your pallet guy going, man, this guy really takes care of me. Yeah. And he is. He’s taken care of you. Yeah, but not in the way you think. Yeah.
[00:41:01] So on that note, I think that’s universal. Appreciate your willingness to kind of go outside of the scope a bit and and offer feedback that any supply chain practitioner I think can benefit from. So continuing down that vein, let’s kind of go broader. I’m looking forward at the intel, a pallet and kind of seeing where that goes. And everyone’s hungry for visibility and supply chain right now. Right. Consumers are demanding it. Supply chain leaders are are are not just demanding it, but they’re it. They’re playing with the hand. They’ve been dealt with. Right. They’ve got to have it. Fronts on these these challenges in this global supply chain global business age we live in. So being shown can see wordly until a pilot goes. Let’s go broader. Let’s not talk about that global Indian Supply chain industry ecosystem. What trend are to our development or innovation? What what’s on your radar more than others right now?
[00:41:59] I think I have two things that I’m keeping an eye on right now that I didn’t really worry about several years ago. I think one of them is lumber. Back in 2008, the U.S. used to use a lot more grade lumber than Industrial lumber in the Industrial lumber that hits the pallet world is the downfall of the great lumber industry. So contrary to popular belief, it’s almost nonexistent that somebody goes out in to the woods to cut down a tree, to make a pallet, and they’re cutting it down to sell grade lumber at twelve hundred dollars a board foot. And then they sell off the Industrial grade at 350 broadfoot back in the day. Now a lot of places that’s 550 aboard foot because that that use curve inverted. You know, the United States doesn’t make furniture like they used to make. Right. It’s become, you know, trendy even in a high end homes to not have solid wood case goods. So now you get the, you know, eight hundred thousand dollar homes that go up that don’t have solid wood cabinets. Right. Those cabinets are considered actually better in some instances than solid wood. So there is no need for that grade lumber. If that doesn’t change, you know, I think the price of the Industrial what is going to continue to rise. So something fundamentally has to change to take the pressure off that Industrial grade lumber.
[00:43:36] One of the pressures that that drove it up also was China used to consume a lot of grade lumber. One of the changes they made those they just started taking the whole log. So if you think about it, we cut the grade lumber off here and put it in a container to go to China. But that downfall material is left here. And that’s good for the Industrial markets for rail ties. Crane mats, pallets. But when they started taking the whole log, there’s nothing left. There’s there’s not us Froome. There’s nothing left for us. So when people say, hey, it’s great, China’s going to buy more lumber, I kind of shrink my shoulders and say, well, does that matter if they’re going to take the whole log? And somebody else would be like, hey, China’s going to buy less lumber. That’s great. And like, well, if they’re going to buy the whole log is a great novel. What we need them to buy is just buy the real nice boards off the outside. Yeah, just leave the crap for us.
[00:44:29] We know one of the things that I’ve all also have observed and this may have hit your radar is you’ve got companies buying more and more forest land here in the states, which I assume takes a lot of that lumber off the public market and lumber market because they’re using it for their own purposes.
[00:44:48] Yeah. And a lot of that I think is is paper mills and, you know, the bane of every palli guys, a paper mill, because the pallet is anywhere from 60 to 75 percent of the cost of the pallet. But it’s only from what I understand about 5 or 10 percent of the cost of the paper. So, you know, and they can use almost anything they want. And in terms of, you know, I can’t build a pallet out of a tree that’s 6 inches around unless it’s a really tiny pallet and really tiny like for your coffee cup. And they have those. We we do.
[00:45:23] I will make sure you are the proud owner of one saying the Ieremia. I will put it right here. Excellent. Excellent. UPS solve all of our palate issues as also my first product placement. That’s right.
[00:45:36] And so so lumber the lumber market is certainly one of the things that you’re tracking. And I can imagine I mean, because it directly impacts not just your business, but your customers. What else out there is intriguing to you?
[00:45:49] I think the other thing that’s intriguing to me is just the fragmentation of the pallet market and the IOC supply chain. Coming together and how that’s going to work, because, you know, the way I the way I kind of look at it is as there was a, you know, technology revolution for Supply chain, all of the people that were taking part in that. For the most part, they are basically speaking the same language. They work in the same industry. Somebody says, hey, I’m I’m great at interface. And some guy says, hey, I’m great a back end, let’s work together. Right. And they don’t even live in the same country. Right. Right. And they work together everyday. And in the pallette world, everything is it’s kind of the old guard. It’s physical. It’s big. It’s covered with grease. And you have to weld on it. And what I’m thinking about, especially with our position in the industry, is how how do you help all of these thirty five hundred. And let’s you know, we’re gonna cut that down. There’s thirty five hundred. That may be right. There’s not quite. Thirty five hundred that are really going to have a chance to participate in this because some of those are real small. But there’s still a large number. Let’s say maybe over a thousand. How how are we as an industry going to help those thousand people come together and cooperate so that they can roll out IO T enhanced products for their customers the same way that maybe some coders would get together? Like, how are they going to do that? They’re they’re going to need some bridge between themselves.
[00:47:38] Somebody or some organization to provide that that guidance and direction to to have the project, to have the initiative and then show them how they can participate and become a partner in that. And so that’s one of the things that we’ve been thinking about a lot, is how do you help the industry kind of get their arms around it? Because I think it’s a big opportunity where the pallet industry is really competitive. It is cutthroat. And I was talking to. I’ll just call them a manufacturer. Well respected. I really respect their opinion. And I was talking about an idea that would require three or four pallet shops in the state to kind of work together and cooperate so that they could lower their operational costs together. And he smiled at me the way a father may smile at a son that they’re proud of, but just doesn’t get it right. And he said, you do know you’re in the building industry, don’t you? And that’s kind of one of the things that we use in the office. You know, still today, somebody comes up with an idea. Really? You know, you’re about industry, don’t you? And it and it’s I think it’s the case that they can, but it’s just not going to be in a traditional way.
[00:48:57] Well, look, in any sort of change here, the consumer, whoever uses the pallet, whoever buys the power, that’s the person with the power. Yes. Who that a. And are you proposing that you all would be sort of this conduit between these companies? Is that your intent?
[00:49:14] I think that we I think that we could play a big role in that. And I think that given our history in managing these pilot programs for big manufacturers, where we’re helping them decide on a plan and then helping all of the participants understand what that plan is and participate in it, we’re kind of already set ourself up to be that aggregator of effort. And I think one of the things that we’ve done pretty well over the past that will help us continue in this vein is that I feel like the people that we work with work with us because they they trust us and they value what we do not because they’re forced to. Yeah. And I think this effort, it will take a lot of trust because you’re going to you’re going to be asking people to do something that is completely foreign to them that they’ve never done before. And humans have a hard time with that.
[00:50:09] Chances are good. It’s going to take both. Yeah, both trust and force more harshly if you think about it.
[00:50:16] I think back on my days as a retailer and vendor managed inventory. This is not unlike that problem. Getting your vendors to get together right. Getting your vendors to submit to a standard. The way that we did it was we said, if you want to do business with us, you’re gonna do it this way and this is your conduit. So you do have to sort of mandate a a means of doing business. Mandate one or or multiple conduits that are acceptable to that person who’s making the spend and enforce it.
[00:50:52] Yeah. And I think when and I think when we get there, I think this will surprise a lot of people is that I think the pallet industry will come around pretty quickly because. It’s full of a lot of really resourceful, tough folks. And, you know, I don’t think it’s so much that they’ll resist the idea itself. But they’ll they’ll need somebody to show them how to how to do it. That at least understands enough about what they do like. You know, I’m not a pallet manufacturing guru, but I understand enough that I could go to a pallet manufacture and say, listen, this is what needs to come out the door at the other end. I think the best way to do it might be like this. What do you say? And they’ll try and they’ll go, well, that stunk. Yeah, but I’ve got an idea now. Yeah. And they’ll have they’ll have the right answer.
[00:51:44] So I love that. We’ve got to make sure we we let our audience know how to get in touch with you and get in touch with the lines before we get there. We’ve gotten two quick notes from Malcolm who leads our research team here. Okay. Two clarifications. Number one, the PELLANT Alliance is not new. You’ve been around since 1995, 20 years. Yes. So Malcolm, one Sheer was chiding me on how our position that, number two, he might go way back. He mentioned that our global audience may not know what a sack dance is, talking about your football prowess. And so just about half a sack is when alarming or linebacker, which is what Tyson played, tackles a quarterback behind the line and they celebrate. Yes. And we’ll have video footage of that after today’s show.
[00:52:28] So Google Derrick Thomas. Yeah. You want to see. That’s right. So now we move. We move is another one that people need to know about. So thank you for keeping me on my toes. OK. So, Tyson, shifting gears, as we start to wind down the interview here, we’re gonna talk about medics and just a second before we get there. How can folks learn more about the Pallot alliance and the Intel, a pilot program and connect with you?
[00:52:52] I think probably the best and easiest way, if you like to read about and understand before you have to talk to somebody would be to go to the web and w w w dot TPA by dot com. And that’ll tell you a little bit more about the company and what we’re about and how we go about things. If you would rather talk to somebody directly, you can go to that Web site and then get our phone number. Right. Give us a call or you can hit us on the email at solutions, at TPA dot com. And then the whole kind of tech group will get that and we will give you a call. Perfect. And see see what you’re dealing with.
[00:53:38] T-p a dot com is the yahel there and you’ll be the team be at mutex booth number 44, 76. That’s right. Have you been. So I’ve only been to Maddox’s 35000 people all come into Atlanta, the sister event to pro-Mitt, which is just as big, I guess. Yeah. Coggins smidge bigger. You’ll be there talking solutions and talking about. I’m sure the intel, a pallet, Menil things, right?
[00:54:07] That’s that’s right. We’ll be we’ll be man in the booth will be bright eyed and bushy tailed and waiting for everybody to come talk to us.
[00:54:14] So we’re gonna bring. We’re going to be there. So yeah, we’ll be livestreaming and whatnot. From from there we bring us that intel pilot to our booth.
[00:54:24] You think you could sneak one over his left? Let me see if I can arrange that. Yeah. Yes.
[00:54:29] Because what I intend to do is move it around the building and see if you can follow us.
[00:54:35] All right. Good old fashioned jalla. A kid you throw down the gantlet. Yeah. As as I’m pointing at Greg, that you’re in the power industry, right? Yeah, I am now. That’s right. All right.
[00:54:47] Well, we’ve been talking with Tyson Steffen’s principal over at the Pallot Alliance. Again, I think I think hopefully after this conversation, folks will kind of see what we’re talking about. When we were saying, hey, you think you know pilots. Mm hmm. You probably don’t. So I really appreciate your expertise and what you’re what you shared with our audience and some of the really neat, neat next generation stuff that you’re doing at the Pallot Alliance, you know? Yeah, great. Appreciate you having us. You bet. T.P., a dot com. Good stuff, Greg.
[00:55:18] It is. The value of a pallet is a lot more than what you pay for it.
[00:55:22] Yes, absolutely. Okay. That’s gonna that’s gonna be a wrap for today’s episode of Supply chain now. Again, we will have show notes on how to get in touch with Tyson and the team over at the Pilot Alliance in the episode page. You know, beyond Moto X Gray, we’ve got a plethora of events coming up. I think we’ve we’ve just closed on three or four new events with some new and some old partners, valued partners.
[00:55:47] And our audience can find that that information where they can find it at our events page at supply chain. Now radio dot com. Fantastic. Okay. And one of the quick, quick note. Yes.
[00:56:01] We’re gonna push the stand up and sound. You have global forum. Yeah. So, Tyson, you might appreciate this.
[00:56:09] You better be there. Yes. Tyson, you got to be there. So, you know, and Tyson.
[00:56:15] So no pun intended, you know, but webinars have been around forever and online presentations and podcast all this, the online digital communcation been around. This is going to be a twist on that. So rather than folks signing up to hear Gregg not picking on you, but here, a subject matter expert pontificate. Right. That one sided communication we’re flipping the tables on are flipping the script on that script. Alex Greene, like you in the audience will be driving the conversation. So we’re going to pick two topics and we’ll be communicating those out to everyone that registers probably a week or two out. Mm hmm. And Greg and I are just gonna play host and facilitator. And whether you’re in Ghana or whether you’re in Brazil or if you’re in Ohio to timbuctoo or Switzerland, our newest country. That’s right.
[00:57:05] You are going to be you better take a position if you’re in Switzerland. Yes. Right. No neutral, no neutral positions on this thing. Very nice. But yeah, that’s it.
[00:57:15] That that expertise, net perspective and insights from the audience, from wherever they are, that’s what’s going to drive the whole conversation. So we’re really looking forward to this. You can find more information at webinars on the webinar tab at Supply Chain Now Radio dot com for more information on the events on the events tab magin that Supply Chain Now Radio dot com. Find us wherever you get your podcast from. Tyson Steffans, a pleasure to have you here in town. Thank you. Next time, we’ll look forward to having Mike in with you and your colleagues here. And looking forward to y’all being back in just, what, three weeks from from this week, right? Yeah, that sounds about right. Yep. All right. Tyson Steffen’s PAL Alliance on behalf of Greg White my Coast here. Be sure to check out other upcoming events, replays, rare interviews, other resources at Supply Chain Now Radio dot com. You can find it’s where we get your podcast, including Apple podcast, SoundCloud and YouTube. Thank you very much. On behalf of the entire team here right now. That’s it. Hope you have a wonderful week ahead. And we will see you next time on supply chain. Now thinks about.
Tyson Steffens graduated from the University of Akron with a BS in Chemical Engineering and a Certificate from the school of Polymer Science. Upon graduation he worked as a process engineer for United States Gypsum (USG) in Shoals, IN. Two years later Tyson was promoted to an Operations Manager position in Torrance, CA that encompassed Production, Quality, and Shipping responsibilities. In January of 2003 Tyson switched industries and took a job with Pallet Alliance, Inc. currently located in Carrboro, NC. After 16 creating pallet programs for corporate customers he purchased Pallet Alliance, along with two others. In his current ownership role, Tyson is responsible for pallet operations including pallet design, sourcing, and constructing customers’ pallet programs. He also helps drive the strategic direction and innovations such as Intellipallet.
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