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In today’s dynamic business environment, efficient and fast handling of goods is one of the key aspects in industries such as Foods and Beverages, Consumer Goods, Pharmaceuticals, etc. With the increasing proliferation of SKUs by manufacturers, companies must find a way to address these challenges along with labor shortages, space constraints, and safety issues to improve profitability and competitiveness.

What is Palletization?

Palletization is integral to the process of handling goods, starting from the planning of pallets to the shipping of these pallets. Palletization refers to the placing of goods on a pallet. The process involves stacking large quantities of identical/mixed items onto a pallet for shipping. Based on their weight and dimensions, the items are stacked in a pattern that promotes stability, stackability, and product safety. Therefore, palletization becomes even more important as it helps to ensure the safe and efficient transportation of goods from manufacturers to retailers and ultimately to consumers.

 

                         
Pallet Side Loading on a Truck

The below image depicts the palletization process and the various pallet configurations. The key input to the planning process is the number of items/cases, configurations, and rules, and the output will be the number of pallets required to be shipped in a truck with the details of each pallet – items, the number of items, and the orientation of items. After the pallets are built, they are loaded onto the trucks in various orientations in order to increase truck utilization.

 Evolution of Palletization Planning

The usage of pallets and palletization has evolved for businesses. From primarily being used for warehouse storage to being an essential aspect of transport, palletization has now become an integral part of the distribution process.

A decade ago, pallet planning was primarily the responsibility of the warehouse planners, who based their plan on customer orders and warehouse constraints and did not account for the transport constraints. The below flow shows the warehouse pallet planning and transport planning.

The above process flow diagram shows that Transport Planning and Warehouse Planning are two disjoint sets. It often leads to infeasible loading in the truck and adds to supply chain costs.

As Supply Chain Pallet Planning has evolved, the focus of pallet planning has shifted from the Warehouse Team to Transport Planning Team. Nowadays, palletization planning happens at the Transport Planning stage based on factors like vehicle availability, truck capacity, and truck size. It considers warehouse constraints such as handling equipment compatibility , SKU stacking limits, weight and space limitations, and product characteristics.

This approach allows accurate planning of pallets and reduces discrepancies in the palletization process. Once the planning is complete, the warehouse management team takes over the processing. This team builds the pallets as per the planning. By aligning pallet planning with transport constraints, companies can improve truck utilization and enhance the overall efficiency of their supply chain operations.

Complexities in Palletization Planning

There are various rules and constraints along with a large number of SKUs. In this scenario, manual planning to build pallets is a complex activity. Some of the factors contributing to pallet complexity and then shipping on a truck are:

1. Pallet Stability: 

   While transporting a pallet, it is important that the stability of the pallet remains intact, thus, reducing the chances of breakage. Pallet stability also ensures that the space utilized within a pallet is optimal. The weight distribution should be even so that the pallet does not wobble and break.

2. Pallet Building with Constraints:

   Pallet configurations define the number of items in a case, the number of cases in a layer, and the number of layers in a pallet for each type of SKU. Planning for all the SKUs together with all these constraints makes it a daunting task.

3. Mixed Palletization:

   One of the most common complexities is building the pallet with more than one item. Palletization with more than one item is called Mixed Palletization, which if planned manually consumes a lot of time. There are SKUs that cannot be mixed with other SKUs in the same pallet. So, combining the compatible SKUs only in the pallet adds another dimension to the pallet building complexity. Constraint is required to place the limit on the maximum number of items that can be combined within a pallet.

4. SKU Loading:

   Another constraint is on the orientation allowed for each SKU due to the SKU characteristics e.g., the Length of the SKU case should only be placed along the length of the truck. The key consideration is to optimally utilize the truck space while addressing this constraint for each SKU since one of the key objectives for planners is to efficiently plan truck space and reduce transportation costs.

5. Multi-Pallet Configuration:

   There are various pallet configurations available, and a company might deal with more than one type of pallet configuration and dimension. Planning of pallets with different types of pallet configurations is a herculean task. The pallet configuration selection can be different based on customers, SKU specific or compliance.

6.  Truck Selection:

   Pallet building depends on the selection of a truck, as the maximum pallet height is decided based on the truck’s height. A holistic transportation planning is required to address the right truck selection and building of pallets together.

7. Palletization based on Routes:

   Planning pallet configuration based on the factors such as shipping routes and the customers’ requirements can also increase the complexity.

8. Visualization:

   becomes the key factor in Palletization Planning to attain a balance between efficient space utilization and safe handling of products.

Business Challenges Due to Manual Palletization Planning

The complexities of palletization are further compounded by the current business practices like:

1. Manual planning needs a larger number of planners to manage and execute palletization which leads to time-consuming manual handling, and inadequate space utilization, ultimately causing reduced productivity and increased labor cost. Moreover, incorrect planning increases the overall supply chain costs due to increased injuries, insurance costs, etc.

2. Higher dependence on the planners’ experience is a challenge in these times of supply chain talent shortage.

3. Disjoint transportation planning with planning separately done for truck routing, selection of trucks, scheduling, and palletization increases errors in planning.

4. Inefficient palletization methods increase the costs due to damaged goods. Underutilized pallet configuration and wastage of truck space reduces customer satisfaction.

5. Improper pallet planning and methods will also cause non-compliance with industry standards, customers’ requirements, and regulations, further causing penalties.

Tackling it with Transport Management System (TMS)

TMS can play a vital role in tackling the complexities and business challenges associated with palletization. Transportation Manager Solutions (TMS) enable automation by providing a centralized system for managing palletization planning. Planning in TMS can do an integrated planning of trucks, routes, and pallets with 3D modeling and visualization of the pallet plan in a shorter time frame while considering a large number of constraints, and business rules which are otherwise complex to plan manually.

The system enables these benefits:

1. Consistency:

   The system will ensure the constraints are followed and consistent pallet plans are produced every time which reduces the risk of product damage.

2. Faster Time to Plan:

   More SKUs are planned in less amount of time compared to manual planning and planners can invest their time in productive tasks.

3. Flexibility:

   Systems can deal with different sizes and shapes of products, ensuring that all product lines can be palletized.

4. Cost Saving:

   Higher efficiency in planning, reduction in product damage, and more effective utilization of trucks will lead to cost savings.

5. Visualization:

   With 3D modeling and visualization warehouse operators can stimulate complex and detailed palletization plans. This will also enable better communication and collaboration to provide a detailed visual representation of the pallet built to all the stakeholders which also minimizes the risk of errors caused.

We at Smartlinks are helping our customers to effectively plan their trucks and pallets.