A piece of news at the beginning of the year made me sit up and take notice: “German companies are running out of wooden pallets! Pallets for the transportation of goods are becoming scarce in Germany. Delivery times for wooden and chemical pallets are increasing to several weeks.” The high demand for transportation is cited as the cause. Logically, the economy is booming and, in addition, many buyers are scheduling goods for the beginning of January at the end of the year. Hence the high demand for pallets. But that would also mean that the capacity of the means of transportation could be increased at will, which I very much doubt. As you probably know, the average dwell time in the warehouse is significantly longer than the actual transportation time. It is therefore not only the transportation volume that can be considered the cause, but rather the storage of the goods themselves.
And that worries me a little. This is because increased stocks are readily accepted in strong economic times, as they ensure good availability despite increasingly tight capacities. Due to high sales, you can afford it. But if the economy declines even slightly, but sales planning does not recognize this, stocks rise and warehouses fill up! And this naturally also has an impact on pallet requirements. I don’t want to be too pessimistic, but in 2008 there were also early indicators of recession that were not taken seriously at the time. We should avoid this next time. It is therefore important to prepare for bad times, especially in good times. In particular, this includes keeping an eye on inventories and consumption to avoid having to watch hard-earned liquidity being locked up in inventories during a downturn. It is time to review processes, question planning optimism and look at degression scenarios.
If you need support from an experienced consultancy, we will be happy to assist you. We have been running successful projects in the field of inventory management and supply chain management for 25 years now. We are proud of that! However, this is no reason to rest on our laurels. On the contrary, it is our incentive to further optimize our own procedures and methods.
I wish you every success and good luck!
