Pallet Standardization

Recommended Pallet Size

4-way entry, 1000mm x 1200mm pallet is the recommended standard for the grocery and fast-moving consumer goods industry. The standard pallet shall have a safe working load of minimum one tonne.

RECOMMENDED PALLET

1200mm x 1000mm 4-way entry pallet is in accordance with the ISO6780 specification.

Nominal Dimension of pallet (L or W)	Entries and openings
	L1 and W1 max.	L2 and W2 min.
1000	150	720
1200	150	770

Dimensions in MM.

    

Why 1000mm x 1200mm pallet?

• Compatible with standard ocean going containers and the majority of trucks

• Dominant size used in Asia (India, China, Hong Kong, Thailand, Malaysia, Indonesia, Philippines and Singapore)

• Conform to International Standard - ISO 6780 'General-purpose flat pallets for through transit of goods - Principal dimensions and tolerances'

• Conform to Singapore Standard - SS 334 'Specification for Timber Pallets'

• Major retailers in India have already adopted this standard

• Sufficiently wide for drive in racking.

Benefits of Pallet Standardization

Standardization of pallets provides the platform for pallet exchange. In the ideal scenario, goods can be transported from the manufacturer, through the distributor, to the retail store on the same pallet. By eliminating the need for manual transfer of goods to another pallet, productivity and work efficiency are improved. The reduction in both labour and handling of goods will reduce delivery and transfer costs. Standardization of pallet sizes will in turn allow standardization of palletisers, racking and warehouse design. This will result in economy of space and facilitate automation. Other benefits include the following:

• Reduction in multiple handling

• Reduction of damaged goods losses through minimal manual handling

• Reduction in number of transportation trips

• Minimization of the wastage of pallets

• Elimination of the need for sorting of pallets

• Reduction of unloading time for suppliers

• Reduction in warehouse storage cost

• Facilitates the concept of shared assets

• Facilitates regional trade and pallet pooling activities

The Standard Pallet Implementation Project in Singapore

The Pallet Standardization Working Group within ECR Singapore has made recommendations to adopt the 4-way 1000mm x 1200mm pallet. However, there is a need to both accelerate the pace of and widen the implementation of the standard pallet in the FMCG industry to realize the benefits of interoperability as soon as possible and transform the industry. Hesitancy amongst the various players in the FMCG supply chain creates doubts about actual operational benefits that translate into real cost savings gained from using standard pallets. This issue of achieving interoperability within the FMCG supply chain in Singapore by using a common platform cannot be realized and shown until a pilot study of the actual operational benefits is carried out.

I. Objectives and Description of Project:

The objectives of the ECR Standard Pallet Implementation Project are defined as follows:

o To implement ECR Standard Pallet.

o To evaluate the benefits of the pilot ECR Standard Pallet Implementation Project.

o To publicize the results of the pilot so as to encourage more companies to adopt the usage of the ECR  Standard pallet rental to secure maximum benefits.

The ECR Standard Pallet Implementation Project started in January 2000 in Singapore with duration of 1 year involving 4 commercial companies as follows:

1. YHS (Singapore) Pte Ltd

2. Grocery Logistics Singapore Pte Ltd, the logistics arm of NTUC Fairprice Co-operative Ltd (NTUC Fairprice Co-operative Ltd is the largest supermarket group with 72 branches and annual turnover amounting to S$917.6 million in 1998/99)

3. LHT Holdings Ltd will provide the pallets used for the pallet pool

4. Unilever Singapore Pte Limited

To ensure objectivity of the measurement, a team of 4 students with the supervision of 2 senior lecturers and 1 deputy director from Singapore Polytechnic act as an independent body in performing data collection and measurement. The 4 students from Singapore Polytechnic were sent to the participating companies to study the use of standard pallets from May to June 2000. Surveys and interviews were conducted to identify the benefits of using standard pallets. The data collected in May/June were reviewed and verified again with the companies in the November and December period by another 4 students from Singapore Polytechnic. PricewaterhouseCoopers played the role of an advisor throughout the 1-year duration of this project.

II. Benefits of Using ECR Standard Pallets:

This pilot project has shown that adopting standard pallets will increase efficiency to the supply chain by improving the productivity of the 4 participating companies' activities. The following are some benefits that were quantified through the implementation of this pilot project:

o Reduction in the cost of ownership through leasing of pallets

o Improvement of productivity in transportation by reducing the delivery trips

o Improvement in production efficiency by manufacturing a single standard size pallet

o Optimization of storage space by redesigning the warehouse racking system

o Improvement in manpower productivity in warehouse

The findings showed an average Internal Rate of Return (IRR) of 155% over 5 years on a recurrence basis. This translates to a return of 1.55 times the money invested in the project. The IRR is computed based on the cost incurred to implement this project and the benefits reaped after implementation.

The above benefits represented in pie chart can be shown as follows:

The benefits of Pallet Standardization are immense in terms of improved material handling, less damage to products and reduction in costs. 

However the challenges faced in India are:

1. Lack of proper infrastructure

2. Use of non standard sizes of transport vehicles.

However there is a growing awareness of the benefits of pallet standardization and the supply chain industry is fast adopting this change and working on these developments.