30 WESTERN PALLET
•Historic lumber and core pricing.
•Shortages for major pallet poolers send ag sector scurrying for pallets.
•Severe labor shortages and skyrocketing labor rates.
•Distribution centers hold more pallet stock, release less onto open market.
•Sharp rise for pallet demand, sustained into 2022 (particularly for used pallets)
•Major consolidation trend in the recycled industry hits into high gear.
•Recyclers turn to combos and recycled lumber for material supply.
•More COVID strains and disruptions… Government Regulation Uncertainty!
•Severe nail, supply and transportation shortages.
•Historic inflation.
PECO Pallet Partners with Optilogic for Supply Chain Modeling and Optimization
PECO is leveraging Optilogic to model and optimize scenarios across its entire network, which encompasses some 90 operating depots, serves over 2,000 customers and maintains a rolling inventory of some 23 million of its wooden rental pallets.
“We are using Optilogic to help us better understand and manage the nodes and flows in our network, and how best to plan, operate and deploy our pallet inventory in the most optimal, responsive and cost-effective manner for our customers,” said Eric Sobanski, PhD, Senior Vice President of Operations at PECO.
“A large, nationwide rental pallet network such as PECO has many of the same characteristics and challenges as any complex supply chain involved in sourcing, storing, and delivering physical goods,” said Sobanski.
“Continually measuring and optimizing such networks, how and where goods flow, making sure inventory is in the right place at the right time, and identifying what risks can derail expected performance, is critical for managing cost and delivering for customers,” he noted.
Employing a strong set of modeling and analytical tools that provides fast and accurate results is necessary to effectively perform regular re-evaluation and scenario modeling of the network, identifying the impact–and risks–of many influencing factors, explained Marc Downs, Senior Director of Network Design and Supply Chain Planning at PECO. Such factors include shifts in customer mix, inventory repositioning, shortages, changes in pallet demand, or other unanticipated market disruptions.
“Importantly, these tools help us understand much more precisely how a new customer impacts our network, and how we can plan and optimize to incorporate and operate that customer’s business most efficiently,” Downs said. Previously, PECO’s operations analytics team used other software to run a single model at a time, in a very heavy manual-data-entry process, Downs noted. With Optilogic, the team can batch run multiple model scenarios, with results in minutes instead of hours.