White Exchange Pallets
Three significant problems facing FMCG companies that use white exchange pallets in Poland include quality inconsistencies, high cost of maintenance and storage, unreliable management and recovery, and sustainability.
1. QUALITY INCONSISTENCIES
- Some fast-moving consumer goods (FMCG) companies in Poland that make use of white exchange pallets, as well as one that leases them, reported unreliability in the white wood pallet system.
- Poland's leading domestic producer of high-quality spring water Polska Woda reported that the transportation and distribution of white wood pallets often left them in a poor state. As such, their business partners frequently complained about its usage, citing it as problematic due to the frequency of having damaged or missing pallets.
- Refresco also reported inconsistencies in the quality of white pallets.
- Poor quality white pallets often lead to equipment failures and incurring extra expenses to replace the damaged pallets. It also reduces delivery precision and time management, which could impact customer satisfaction rates.
- According to Polska Woda, not responding effectively to the seasonal and market demand for bottled water due to the quality inconsistencies of white pallets put its business at risk, as the demand for its product is prone to market fluctuations.
2. HIGH COST OF MAINTENANCE AND STORAGE
- The inconsistencies in the quality of white wood pallets often affect its maintenance and storage.
- Refresco in 2012 reported that the use of white pallets in its beverage company led to high maintenance and storage costs.
- Goliard, a pasta and sauce producer in Poland while highlighting the problems of the white pallet management system, mentioned a continual need to replace broken pallets. This note suggests that white exchange pallets would require a lot to maintain, as they can quickly get damaged.
- The use of white wood pallets increases the overall cost of operation.
3. UNRELIABLE MANAGEMENT AND RECOVERY
- Managing one's white pallet inventory is complicated, according to Refresco.
- Goliard also mentioned that FMCG companies in Poland face a common problem of unreliable pallet management, and when it tried to outsource its white pallet management, the pallets were still damaged frequently, while some were diverted to the black market.
- Nutricia noted that even with a complex supply chain that comprised of two factories and logistics service providers (LSP) managing its external warehouse, they found it challenging to reduce pallet balance disputes and ensure high-quality white pallets.
- Also, thousands of Nutricia's white pallets went missing annually due to poor management.
- According to "Kinga Di Salvo, CHEP's Country General Manager for Poland and the Baltics," the white pallet system is responsible for the loss of thousands of zlotys per month by Polish companies. In the white pallet system, there is the problem of improper classification of the pallets that sometimes leads the pallet management of Polish companies to purchase damaged/faulty pallets that were classified as new ones.
- After tasking one of its staff to oversee the management of its white exchange pallets, to ensure that they were all recovered in good condition, Polska Woda still had to "use bonus packages to persuade its supply chain partners to return equipment."
- The unreliable management and recovery that is characteristic of the white pallet system could lead to strained relationships between FMCG companies (their LSPs) and their distributors, thus negatively impacting the supply chain and leading to time wastage.
We began our search for some major problems facing FMCG companies in Poland when using white exchange pallets, by looking for articles regarding the same from Pallet Enterprise, Small Business, The Economist, Europages, and Cabinet Magazine, among others. We hoped to find any reports regarding the white exchange pallet issues faced by the FMCG companies in the country since these sites regularly post business/industry-related articles. However, we found data for pallet suppliers globally, problems that the white wood pallets are facing in the US, the top three pallet rentals and providers in the US, and a few companies that make use of pallets in the US. There was no information regarding the problems and implications faced by FMCG companies in Poland when using white exchange pallets.
From the results of the first strategy, we concluded that there was no way to identify the problems facing FMCG companies in Poland without first knowing the companies operating in that space within the country. As such, our next course of research was to identify the top FMCG companies in Poland. We searched from the same from the market from sites such as Food From Poland, Statista, and Euromonitor International, as these sites usually provide market reports and/or statistics that mention the key players in several industries. However, we were only able to obtain a summary of the Polish FMCG market and the share of the FMCG market sold by supermarkets and hypermarkets, which did not provide any useful information for our research.
Since there was no available report listing the key FMCG companies in Poland, we extended our search to Europe and obtained a list of the top ten key players in the industry. We pursued this strategy further by seeking problems regarding their use of white exchange pallets in Poland to enable us to establish the problems that are common to the major FMCG companies there. During our research, we found a case study by CHEP (a pallet supplier and maintenance company), which provided some useful information for issues faced by an FMCG company in Poland. We then analyzed other CHEP case studies of similar companies to provide the issues faced by FMCG companies in Poland. We were only able to identify three significant issues arising from the usage of white pallets from the case studies, as our findings were limited.
Lastly, we utilized a source that is beyond Wonder's standard two-year timeframe. However, we did this because the available information is limited, and as the document reported case studies, we used it to provide supportive findings of examples to back our findings.