Every so often there are decisions in industry that have the potential to be game changers, and the question here is whether the pallet change decision by IKEA can be potentially classified as one of them. Decisions made about pallets and transport packaging by major players certainly can influence the market in a significant way.
Most recently the Costco block pallet push comes to mind. This of course was the catalyst that really got the PluSolutions initiative into full gear. No doubt it played a part in the PECO Pallet expansion into Mexico and Canada.
Other game changers that come to mind include the WalMart decision championed several years ago by Bruce Peterson, vice president of WalMart perishable at that time, to embrace reusable plastic containers for transport packaging. Peterson was a champion for RPCs, but more recently WalMart has been sending mixed signals, even as the technology is more fully embraced by Kroger, Loblaw and other leading retailers.
I recall one potential “game changer” I covered several years ago, the Home Depot slipsheet initiative to take pallets out of inbound transportation. Slipsheet remains an important approach to unitization for many goods, but it never really seemed to get off the ground at Home Depot to the extent anticipated. The need for specialized forklift attachments not only at supplier and retail locations, as well as at intermediate handling points translated into too big of a challenge, according to Home Depot people I conversed with in the years that followed.
So here we are with IKEA. Is this the first of a trend or a one-off? One major constraint is the need to upgrade facility racking throughout the supply chain in order to use the lighter unit load base, which suggests that it will remain a specialized solution, rather than a major trend. Having said that, IKEA is a major retailer, and can impact the market. In the IKEA pallet conversion interview, Ewe Schmidt talks about almost 650,000 pallet storage locations in Europe. If these are being turned 15 or 20 times per year, that seems like a nice piece of business for paper pallet and Optiledge sales. It is also welcomed I assume by racking suppliers involved in the facility upgrades.
What do you think – game changer or one off? Please “Speak Your Mind” below.