Lean Operations, People-First Culture and Industry Networking Helps California Pallet Company Overcome COVID-19 Surge

Overcoming COVID-19: California pallet company weathers pandemic thanks to strong industry relationships. It has grown through lean operational practices and appropriate automation, such as a new repair line from Smetco and a new Pallet Hawg dismantler from Wood-Mizer.

By Rick LeBlanc
Date Posted: 10/1/2020

Oxnard Pallet Overcomes COVID-19 Challenges
California pallet company uses lean people-first principles to face pandemic.

In early July 2020, Oxnard Pallet found itself struck by 13 cases of COVID-19 among its more than 40 company employees, including owners Elias and Beatrice Vasquez.

The company quickly scrambled to fill orders while operating with just a skeleton crew. For a company that prides itself on quality and on-time deliveries, it was a tough spot.

 “It was the biggest challenge we have ever faced with our business,” recalled Beatrice Vasquez, corporate secretary and CFO of Oxnard Pallet Company.

 “It started with one person,” Beatrice continued. “When we’re here,” she stressed, “there is social distancing. We were checking everybody’s temperatures, disinfecting, and doing everything over and above the call of duty, and yet it still happened.”

Critical factors in the company’s successful rebound were engaged employees who rose to the occasion to fill in for missing team members, as well as industry collaboration, allowing Oxnard Pallet to fill orders even as its own operations had been temporarily disrupted.

“We had the majority (of cases) at the same time,” Beatrice stated. “We had a span of fourteen days that we were just the minimal skeleton crew.” The company was forced to close its doors for three days. It would not have been able to meet deliveries except through the support of other pallet companies, who stepped up with pallets to help Oxnard meet its commitments.

Luckily, Oxnard’s company truck drivers had not been impacted by the coronavirus and were able to pick up pallets from the other pallet companies for delivery. Beatrice attributed the goodwill to relationships that Oxnard Pallet has formed through various pallet associations.

“We were really fortunate,” Beatrice said, referring to both the industry support as well as regarding health outcomes, noting that none of their team members had required hospitalization. “They were very sick, but everybody was able to stay home, and get well,” she added.

A Lean Approach, Preparing for What’s Next

In Oxnard Pallet’s 27-year history, the company has felt its share of major business disruptions, including September 11, 2001, the economic downturn of 2008, and most recently, the COVID-19 pandemic. The company attributes its enduring success to its ability to run lean, so it has the financial strength to get through such hard times.

“My husband Elias has always been really good at running the business as lean as possible,” Beatrice stated. During the coronavirus outbreak, she pointed out that the company was able to weather a temporary but severe drop in business by just marginally cutting employee hours.

Oxnard Pallet has always had an eye to the future. The vision for a pallet business came to Elias when he was an owner-operator truck driver in the early 1990s. One of his routes was to pick up ice in the Oxnard area and deliver it to fresh produce companies. He discovered that some companies were in desperate need of pallets, while other companies were urgently trying to get rid of surplus stock. “He noticed that there weren’t many pallet companies. There were just small guys here and there,” Beatrice said.

Elias started off as a pallet broker while still also driving for a living. He would deliver produce to Los Angeles, and then find pallets to bring back to Oxnard. After a time, he pitched his idea of starting a permanent pallet business to Beatrice.

At the time, Beatrice was vice president of human resources for a bank. “I was at that place and time where you have your small family and wanting to be home a little bit, but yet I wanted to work and was trying to find that balance in life,” she said. The idea of starting a new company struck a chord.

The fledgling operation rented a two-acre yard and bought a used forklift. It put a sign out front and started advertising. At first, the operation consisted of just Elias, Beatrice, and another employee. Beatrice had her desk set up in an old delivery trailer. It had no windows, but she said she didn’t care. It was an exciting time. The company quickly grew. “You just never know what’s going to happen, and the business just took off naturally,” she said. “It’s like we were in the right place at the right time.”

“We were very dedicated and disciplined for the young ages that we were at that time,” she added.

Then in 2007, Oxnard Pallet purchased its present location, a 10-acre site with an existing building, a historic lima bean processing plant that had been built in 1948. The structure has three tunnels that run the length of the building helping facilitate material flow.

The Company Continues to Grow and Invest in Equipment

Oxnard Pallet has benefitted from the gradual introduction of automation. Several years ago, the company picked up two used Viking Champions from an Oregon pallet company to enhance its new and combo pallet capability. “We still have those, and they’re still running very well,” Beatrice said of the Champions.

Over the last two years, Oxnard Pallet has taken delivery of a new Wood-Mizer dismantler as well as new Smetco sorting and repair systems, and they have been delighted with the results. The Wood-Mizer Pallet Hawg® PD200 pallet dismantler was purchased in 2020 in addition to two other dismantlers already in operation. It features a 60″ opening. In particular, Elias likes the convenience of the quick-adjust, pneumatic-table-height feature, as well as the substantial band life before replacement. All of the dismantlers are run with two employees. Elias commented that Wood-Mizer customer service is excellent and their service team is friendly. Specifically, Wood-Mizer’s pallet specialist, Brad Kirkaldy, has been the key contact and support person for Elias and his team. Oxnard has been so pleased with the performance of the PD200 dismantler that the company has another Pallet Hawg on order.

In 2019, the company took delivery of Smetco semi-automated sort and repair lines. They have both been welcome additions, and have helped to make work less physically demanding for employees. The company has enjoyed a reduction in workers comp claims related to these activities. Two operators can sort about 800 pallets per shift on the Smetco sorting line versus what would have taken four employees to do manually prior to the installation of the line. As its workforce ages, the introduction of automation is a welcome addition.

“It is a much safer practice,” Beatrice said, noting that the company’s workers comp claims had diminished as a result of the practice. As for the Smetco repair line, she said that she cannot understate what it has meant to their operation, allowing the company to enjoy a 20-30% increase in repair productivity, depending upon the repairs being done. Elias emphasized that the line helps provide a more organized and spacious work space for each repairer.

The next project in the works for Oxnard Pallet is to create a pond reservoir on the property to have available for fire suppression. Because the company is on well water, it has been working with Ventura County and local fire officials to come up with a plan to ensure its water supply in case of fire. While the pond will result in losing about ¾ of an acre of farmland that they currently rent out, the solution will be substantially cheaper than the other approved option of installing water tanks.

The Importance of Employees and Industry Collaboration

Oxnard Pallet benefits from its strong employee retention. “They’ve been very dedicated and loyal employees, and we’ve been very fortunate,” Beatrice said. She taps into her expertise as a former human resources executive in recognizing the importance of employee recognition. She stresses the importance of delivering extra perks, whether it is the recognition of a birthday, or simply acknowledging the little things that people might think don’t matter, yet are crucial to business success.

Elias and Beatrice have been joined in the company by Vannessa Vasquez, their daughter. The parents were thrilled when Vannessa decided to change gears from a career in clothing design to start working with Oxnard Pallet. She now serves as vice president of business development. Elias lll, their son, also worked briefly in the business before pursuing a successful career in the arts.

Industry association membership has also played a strong role in the growth of Oxnard Pallet. The company joined the National Wooden Pallet & Container Association (NWPCA) many years ago, after reading about it in a trade magazine. Attendees at an NWPCA event convinced Elias and Beatrice to also join the Western Pallet Association (WPA). Beatrice, the current WPA president, said she was hooked by the friendliness of the group, leading to the creation of enduring relationships. Some of those relationships proved fortuitous when the company was slammed by COVID-19 this July and needed to source pallets to fill orders.

Oxnard Pallet is also actively involved with the North American Pallet Association (NAPA), a grassroots pallet association begun by predominantly Hispanic pallet companies in California in the wake of arson attacks and subsequent pressure from local zoning and fire protection authorities.

Beatrice noted that a lot of NAPA members don’t belong to other associations, whether because of a language barrier or because they are actively working in their business and can’t pull away to attend an association meeting. Some companies, she noted, prefer to operate under the radar, while others are looking to actively grow.

“There’s all sorts of things going on within NAPA, but what’s really interesting is the members really help everybody,” she said. That helpful spirit helped Oxnard Pallet over the hump when it was clobbered by COVID-19. “We were interacting with a lot of different NAPA companies, and it was really, really amazing,” she said. “There were a couple of people that helped us with our COVID crisis as a result of us having good rapport with them. You know, we would do the same for them in a heartbeat if needed.”

Oxnard Pallet has weathered its fair share of external challenges during its 27-year history. The company has relied on its lean operating practices to keep it ready for the next potential downturn. Elias and Beatrice look forward to future growth through emphasis on lean operations and resilience. Oxnard Pallet continues to evaluate further automation while working to maintain its strong connections to other companies in the pallet industry.

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