Pallet Enterprise December 2016
Iowa Recycler Stays on Growth Trajectory
WestWind Logistics gets a boost from new AMS pallet sorting and repair systems.
Des Moines, IOWA — Jeff DeVries and Shane Thompson have had one goal since they became partners and acquired WestWind Logistics: grow it more.
DeVries and an equity group owned the company previously, and Thompson was a long-standing employee when the pair teamed to purchase the business at the beginning of 2014.
They immediately began reinvesting in plant infrastructure, and one of their key suppliers has been Automated Machine Systems (AMS), which provides pallet handling and recycling machinery and equipment along with complete systems for handling, sorting, and repairing pallets. AMS also developed PalMate®, a leading enterprise resource planning software for the pallet industry.
It would be a mistake, however, to regard WestWind Logistics as a pallet company. As its name suggests, it is much more than that.
“We’re not just a pallet company,” said Thompson, 44, who holds the corporate title of president and oversees sales. “We kind of bill ourselves as a supply chain facilitator.”
“We’re a new and used pallet company,” added DeVries, 51, CEO. “We’re a trucking company; we’re a Total Pallet Management (TPM) company, and we’re a warehousing company.” WestWind also provides a solid waste recycling service with roll-off containers.
Automation and Tracking Enables WestWind to Grow and Meet Customer Needs
Thompson already had a business relationship with AMS founder Kris Chayer. “I’ve known Kris for years,” he said. Nevertheless, when it came time to consider automation, Thompson and DeVries considered other suppliers, too, but they were swayed by the solution that the AMS team developed for them.
AMS has as its goal to help companies in the pallet and lumber industries to improve efficiency, streamline their plant logistics, and automate processes. The AMS team can design and supply complete systems as well as component machines, equipment and work stations. AMS manufactures and supplies pallet recycling equipment for handling, processing, repairing and recycling pallets. Its catalog includes de-stackers, tippers, stackers, conveyors and conveying systems, lead board removers, repair tables and work stations, dismantlers, equipment for eliminating nail stubble from recycled lumber, platers, and stringer splicers. It offers equipment for painting, stenciling and marking pallets, in addition to pallet washing systems as well as grinding equipment. Rounding out the AMS catalog is its suite of software solutions designed specifically for the wooden pallet and container industry.
“PalMate was a big piece for us,” said Thompson, referring to the software suite exclusively licensed by AMS. The business management software, developed and designed exclusively for pallet and lumber operations, helps businesses manage data for sales, production activities, inventory, dispatching, and much more. WestWind’s initial focus on PalMate (www.PalMateerp.com) enabled the collection and tracking of data related to its pallet recycling operations.
Improving efficiency also was a key consideration. “We wanted a way to automate and reduce touches and entry points,” said Thompson, to begin streamlining pallet recycling operations.
The AMS pallet handling and sorting system, in conjunction with PalMate, “seemed to make the most sense for our application,” said Thompson.
The sorting system at the WestWind TPM plant enables the company to process 3,500 pallets per shift. The plant receives mixed loads of pallets from a distribution center. Pallets are staged in stacks on an infeed system that goes to a de-stacker. The de-stacked pallets are conveyed to an inspection station where one worker can sort them into one of five stackers. Pallets are sorted for each pallet pooling company as well as white pallets. “It’s pretty straight up,” said Thompson, “a typical sorting system.” Thompson and DeVries plan to integrate PalMate at the TPM plant for inventory purposes.
DeVries and Thompson chose AMS to supply an automated pallet repair system for their main plant. They were pleased with the performance of the AMS sorting system, the quality, and the supplier’s support and service. They also liked the idea of doing business with one supplier for commonality of parts.
The AMS automated pallet repair line, which began operating earlier this year, has 10 stations where workers can repair or build pallets. Stacks of incoming pallets are staged on a gravity infeed system so that the work stations are automatically replenished with pallets to be processed. “It allows us to put more pallets on the line quickly,” said Thompson.
Each work station has a 25-foot infeed so that six stacks can be staged at each work station. Pneumatic nailing tools are suspended on hangers above the work area for ease of use. Workers remove individual pallets from a stack and repair them as necessary or, in the case of ready-to-go pallets, slide them onto a conveyor. They attach a barcode sticker to each pallet that identifies the pallet by grade and worker. The live roller conveyor moves finished pallets to three AMS stackers.
The pallets pass by a barcode reader integrated with PalMate to collect data on each pallet, and pallets are routed automatically to the appropriate stacker. A top tier conveyor carries away scrap wood material to the company’s grinding operations. A PalMate PlantFloor kiosk in the production area provides access to the data captured and tabulated by PalMate barcode reader. AMS also supplied air pressure controls.
From the plant floor to the back office, PalMate is used to perform a number of tasks. It currently tracks all production and makes corresponding payroll calculations. PalMate branding also tracks sales transactions as well as purchasing and receiving transactions for buying lumber and used pallets. WestWind incorporates PalMate branding into divisional dispatching and also is in the process of implementing the software system to track all inventory.
There was a learning curve for the pallet repair system, noted Thompson, and it took some time for workers to buy into it. However, the AMS automated pallet repair line has made the work easier for employees, and they are producing more pallets and earning more, according to Thompson. “It’s been a win-win.”
Previously, incoming pallets were staged by stacks at each work station, and employees had to walk around and carry them. With that arrangement, each worker recycled about 250-300 pallets per shift. Now, with the AMS system, each worker is recycling about 400-450 pallets per shift.
Aggressive Growth Strategy & Company History
WestWind has six locations in Iowa, including four operational facilities for production and warehousing; two locations are truck shops for servicing and repairing semi-tractors and trailers. The company has three facilities in Des Moines in central Iowa plus a truck shop. Its other facilities are in McClelland, about 120 miles to the west and close to Omaha, Nebraska, and also in Cedar Rapids, about 150 miles to the east. The company’s operations employ 170 people.
“We build, repair, or touch about four million pallets annually,” said DeVries.
The company’s trucking operations, with 60 semi-tractors and 700 trailers, are roughly on par with WestWind pallet operations in terms of sales. Pallets account for about 46% of revenues, and trucking makes up 41%, according to the company’s most recent figures. TPM services provide 9% of the company’s overall revenues. Other revenue streams come from warehousing services and sales of products generated from residual materials.
WestWind had its genesis in Andrew Pallet, where Thompson went to work out of college after the company tapped him to conduct a time and motion study. He described it as a “small mom and pop business.” The company enjoyed incremental growth through the years and opened a second plant in southeast Iowa.
DeVries was part of an equity group that bought the business and a trucking company and formed them into WestWind Logistics in 2004; at the time the company’s annual pallet production was about 500,000.
DeVries had no prior experience in the pallet industry but had been involved in various businesses and industries, mainly on the financial side, including manufacturing, construction, business services and the agriculture industry.
DeVries and the equity group he was affiliated with began growing the company and bought another trucking company in 2006. The company outgrew its main plant and moved to its current location in 2013.
Thompson continued to work for the business through the ownership change, and the two men decided to buy the business together in 2014. They immediately began reinvesting in plant infrastructure. They purchased a site for TPM operations and put in a pallet handling and sorting system from AMS. Earlier this year they began operating a new AMS automated pallet repair line at WestWind’s pallet plant; that enabled them to consolidate operations at another site. They also have added a mill to manufacture wood fuel pellets.
Turning Scrap into Usable Products
A Rotochopper grinder is the workhorse for processing scrap wood material. It produces grindings for mulch and grindings for feed stock for the company’s fuel pellet operations. A Vecoplan mill produces the wood fuel pellets, which are bagged and palletized and supplied to wholesale customers.
“We pride ourselves,” said DeVries, on what are essentially real time operations for processing the company’s residual material. “Most pallet companies have large piles of wood,” scrap wood material and scrap pallets. We’re feeding our grinding operation in real time and processing it as it goes…right from grinder to pellet mill.”
DeVries added, “There are no piles of waste wood material or scrap pallets. Mulch is produced the same way, conveyed directly into trailers.”
Customer Focus – Diverse Services
The company’s main pallet plant, located in Des Moines, has about 60,000 square feet for production operations plus additions space for its corporate and administrative offices.
Production of white wood pallets is about 40,000 pallets per week. The vast majority of those pallets – 75-80% – are recycled, and most recycled pallets are GMA pallets.
The 60,000-square-foot TPM facility is a block away; two-thirds of that space is devoted to TPM services and the remaining 20,000 square feet serves as a repair depot for a pallet pooling company, processing about 2,500 rental pallets daily.
WestWind sorts, stores and returns about 1.5 million pallets annually to pallet pooling businesses. The figure also includes returnable plastic containers. “That business has been increasing,” said DeVries.
Without identifying any of the three pallet pooling companies, DeVries indicated they all are customers of WestWind. “We work with all of them.”
WestWind buys mainly new pallet cut stock for building new pallets, repairing pallets, and making combination pallets of both new and recycled lumber. It buys both hardwood and softwood pre-cut stock. The company has milling operations, but they are limited. For example, it recycles some 4×4 dunnage and resaws that material into pallet deck boards. It also buys some lumber of mixed lengths from time to time and cuts it to size.
The company’s lumber recycling and remanufacturing operations are equipped with a pair of Industrial Resources bandsaw dismantlers, a pair of PRS trim saws, a Baker Products PAQ band resaw, and a couple of Heartland chop saws. The company also recently ordered a Baker Products single-head notcher.
Being in the heart of the corn belt region, Iowa supports a large agriculture industry, and WestWind does business in it. For example, the company operates a pallet repair and return program for a large seed company, and it provides a similar service to John Deere, which has a factory in Des Moines as well as others in Iowa. WestWind also serves grocery manufacturers and meat packing plants.
Having customers in the food industry has proven beneficial. WestWind was affected little by the most recent recession. “In Iowa, the food industry really isolates us from the big ups and downs of the economy,” explained DeVries. “Everybody still eats.”
“We do a good job of tying everything together” for customers, noted DeVries. They can supply a customer with pallets. They can haul freight for them. They can provide TPM services and eliminate dock space dedicated for trailers of pallets, and they can take care of a company’s waste wood, cardboard or plastic packaging.
“We’re doing the stuff that gets our hands dirty and frees up time and space for our clients,” said DeVries.
WestWind provides pallet analysis and design services using the Pallet Design System™ (PDS) software. PDS integrates with WestWind’s PalMate software package, bringing in drawings and bills of material with just a few clicks. WestWind is certified by Package Research Laboratory to provide export pallets that comply with ISPM-15.
The company is active in several trade associations. In fact, Thompson is chair-elect of the National Wood Pallet and Container Association and will step into the role in 2017. WestWind also is a member of the Iowa Motor Truck Association, the Iowa Recycling Association, the Pellet Fuel Institute, and is affiliated with the U.S. Environmental Protection Agency SmartWay program.
The co-owners definitely have an eye on the future although they have no immediate plans. “We’re always looking for opportunities, especially for handling and processing more pallets, providing pallet recycling, repair, and return programs and services,” said DeVries.
Odd-size and custom pallets are becoming a larger part of the company’s business, he added. The company also is looking for opportunities to leverage its pallet and trucking operations together.
“As a logistics company, we’ve kind of moved away from the small mom and pop pallet operation,” said DeVries. “We are a logistics company focused on the pallet industry with the ability to transport, handle, repair, warehouse pallets of any color.”