Cost-cutting never goes out of style. It is typically a frontrunner among the most popular logistics strategies pursued. However, most supply chain decision-makers learn through experience that value must also be weighed in pursuit of effective decision-making.
It’s no surprise that this premise also holds for pallet rack purchases. A new white paper from Steel King, “When it comes to pallet rack systems, cheaper is definitely not better,” convincingly argues that scrimping on quality, safety, features, and warranties to save a few dollars upfront can be a costly mistake.
Pallet rack systems are integral to fulfillment operations. The right system can help you increase storage capacity, reduce labor costs, and improve inventory management and safety. Companies can efficiently store vast quantities of products in limited spaces with options like selective racking, drive-in racking, pallet-flow racking, and double-deep racking systems. However, the initial purchase price is just the tip of the iceberg when considering the total cost of ownership (TCO).
“A lot of companies treat pallet racking like a commodity and place their orders to whichever company has the cheapest price,” Raymond Weber, Eastern regional sales manager at Steel King Industries, Inc., explains in the white paper. This mindset overlooks the significant ongoing maintenance and loss-of-use costs that can accrue over the life of a pallet racking system, potentially dwarfing any initial savings.
Pallet racks have evolved from simple storage solutions to sophisticated, towering structures integral to a facility’s operation. They must be designed with specific building codes, seismic requirements, and fire safety regulations in mind. Integrating automated warehouse equipment adds another layer of complexity, requiring precision and compatibility to avoid inefficiencies or hazards.
Choosing the right pallet rack system involves deeply understanding the types and quantities of stored products. Heavy, bulky items necessitate a robust system, whereas lighter products might not. The facility’s size and layout also influence the decision, with different systems suiting narrow or expansive spaces differently.
Safety and durability should be top of mind. The consequences of opting for a cheaper, less reliable system can range from increased maintenance costs to dangerous work environments. “You may be able to save $200,000 by purchasing the lowest-cost pallet rack system, but if you’re spending $50,000 a year on repair and replacement, your 4-year return on investment (ROI) goes right out the window,” Weber points out. Moreover, damaged racking can lead to lost storage space and productivity, especially if high-turnover products are involved.
Steel King underscores the importance of considering long-term maintenance costs and safety risks over minimal upfront savings. Investing in quality pallet racking systems, reinforced with additional safety accessories like column guards and post protectors, can mitigate these risks and expenses. “A lot of companies fail to consider this because they assume rack in and of itself is invincible, but it’s not,” says Weber.
The value of the stored products also plays a crucial role in system selection. High-value items warrant more sophisticated, durable racking solutions to prevent potential loss or damage. “The more valuable your products are, the less you want to ‘go cheap’ when protecting the goods, the rack, and the equipment that will interface with it,” advises Arlin Keck, corporate R&D engineer at Steel King.
Steel King makes a compelling case for prioritizing quality, safety, and compatibility over cost when selecting pallet rack systems. Value should also be the crucial measure when selecting pallets that will optimize your pallet racking system.
After all, pallets are the indispensable interface between your product and your material handling systems – including pallet racking. To ensure you have the pallets best suited for your racking system, why not contact PalletOne and explore our Pallet Concierge service? We can make sure you get the most from your material handling system investments.
