A Quantitative Study of the U . S . Wood Pallet Industry Based on Supply Chain Management Practices

Pallets play an important role in the movement of goods from place to place. They are not only used in warehouses or distribution centers, but also in all those activities that require an efficient and effective method of transportation. To better understand business practices and external factors that impacts supply chain management (SCM), a survey of 1,500 U.S. wood pallet manufacturers was conducted. Main results focus on the identification of critical aspects affecting purchasing decisions, supplier relationships, internal business practices, customer satisfaction levels, and external uncertainties. INTRODUCTION O of the major business developments of the last decade is the emergence of supply chain management [1], [2], and [3]. A supply chain is a system constituted by materials, suppliers, facilities, and customers, connected by the flow of materials and information [4]. Globalization, advances in transportation of goods, information technology, and increasing sophistication of customers are all drivers of supply chain management, as companies no longer compete as individual entities but as part of complex networks [4]. Successful companies realize the need to work in close relationship with their suppliers and customers, pursuing the same objective: customer satisfaction [5]. Research has demonstrated that collaboration between supply chain members provides a significant competitive advantage [3]. Typical benefits from supply chain management practices are shortened lead time, reduced costs, improved design, and overall im*Author to whom correspondence should be addressed. Email: quesada@vt.edu Journal of Applied Packaging Research, Vol. 6, No. 1—January 2012 1557-7244/12/01 001-26 © 2012 DEStech Publications, Inc. R E S E A R C H H. QUESADA-PINEDA, S. SANCHEZ-GOMEZ and P. ARAMAN 2 proved customer satisfaction [5]. Researchers found that an efficient supply chain begins with customer and supplier collaboration and information sharing, and with the use of advanced technology such as Electronic Data Interchange (EDI), where the appropriate information can improve companies’ operations. The U.S. wood pallet industry faces several challenges to its competitiveness; among these, the competition for wood fiber with other users [6]; competition from substitute products such as plastic and steel pallets [7]; lobby from competitors to limit their use for food safety reasons [8]; downturn in the economy, which reduces the demand for goods transported on pallets; and the fragmented nature of the industry. The industry could benefit from adopting better supply chain management practices in their strategic planning and operations, both to ensure supply of raw materials and ensure better service to customers [4]. Goal and Objectives The goal of this paper is to identify and understand current business practices affecting the US wood pallet industry. Specific objectives are: • Understand the main demographics characteristics of the U.S. wood pallet industry. • Identify what factors affect purchasing decision of raw materials. • Compare perceptions of the U.S. wood pallet industry regarding customer service activities. • Identify what business management practices are being used today in the U.S. wood pallet industry. • Define the most important external uncertainties that U.S. wood pallet firms face today.