To: Courtney, Owner
From: Kevin Taggar, Operations Manager
Date: October 11, 2012
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Subject: Proposal to switch pallets from wood to plastic

We would like to switch from wooden to plastic pallets due to the on-going problems and excessive costs incurred with the use of wooden pallets.
Problem & Solution
We have noticed exorbitant costs involved in the production, repairing, cleaning, and re-use of the wooden pallets. The overall downtime due to these facts has progressively increased. The production statistics and records show the loss of hours and costs incurred for repairs. As a result, we would like to propose the use of a new plastic pallet.

Recyclable, Re-usable, Durable
One of the numerous benefits in switching to the use of plastic pallets is that it can make 200-250 trips before being recycled by grounding it into resin and reformed back into a pallet. Due to the increase in the number of trips plastic pallets can provide it will lower our production and landfill costs substantially which would lead to greater profits. With the plastic pallet there is more durability, it maintains shape and can hold up to 2,800 pounds. Since it retains its shape, it will reduce jams in the palletizer and lead to more equipment up time and improved line speed. Additionally, with the added strength of each pallet we will be able to load more bottles of juice on each one.

Lighter, Safer and Faster
The plastic pallet is 30% lighter than wooden ones and by using plastic we would significantly reduce our transportation and fuel costs as it is easier to transport lighter pallets. Furthermore, we would reduce vehicle emissions and trips to the landfill. This makes plastic pallets considerably more environmentally friendly than plastic ones. From a safety point of view, the average plastic pallet is 25 pounds lighter than the wooden one and there is no breakage or debris falling onto the plant floor. This provides a safer work environment for our employees, thus reduces injuries, and significantly lowers labor costs. Currently, our cross-border shipments undergo rigorous certification and bureaucratic paperwork because the pallets are made from wood. Switching to plastic pallets eliminates much of this paperwork and speeds up our delivery time which could increase customer satisfaction and save us money.

Sanitary
Plastic pallets are considered more sanitary and easier to clean than wood. They require a simple wash down with soap and water through the washing-station and are ready for reuse. Conversely, much higher costs are incurred in fumigating and heat treating the wooden pallets. Wood is much difficult to wash and is prone to insects