New technology has much to offer warehousing in terms of raising the supply chain game. But beware of quick fixes, reports Rick Pendrous
Warburtons' new £45M bakery near Bristol is symbolic of today's changing priorities.
It has been constructed by warehouse and logistics provider Gazeley, which has made great play of its green credentials. Gazeley even suggests a time not far off when energy efficient polycarbonate and grass roofing could become the norm.
Last year Gazeley, a subsidiary of Wal-Mart, committed to make more than one-third of all its new developments carbon positive by 2010.
The Warburtons bakery has two plants on a 12-acre site at Western Approach Distribution Park at Severn Beach capable of producing 1.5M products a week. It includes a despatch and production warehouse, space for offices and supporting facilities and has a number of sustainable technologies, including rain water harvesting and recycling, energy efficient lighting and low water use appliances. This is the second deal between Gazeley and Warburtons and follows the delivery of Warburtons' bakery at Enfield in 2003.
Elsewhere, Buckingham Group has been appointed as principal contractor to build the new Domino's Pizza Commissary at West Ashlands, Milton Keynes. The £20M project involves the design and build of a new production facility and distribution warehouse extending to approximately 7,432m2 with ancillary staff and office accommodation.
The Group has also been awarded a £12M contract to build an energy efficient flagship depot for foodservice wholesale distributor 3663. The 12,077m2 building, which includes 4,459m2 chilled and frozen areas and 2,044m2 of office space, is being built using the latest sustainable construction methods, and is due for completion in August 2009. Buckingham also recently completed the sustainable £40M Pineham regional distribution centre (RDC) for Sainsbury and has undertaken a range of projects for other food distribution specialists such as GIST, which handles logistics operations for Marks & Spencer among others.
But it's not just the warehouse sheds themselves that developers and operators are seeking to make more environmentally friendly, they also want the operations within them to be more efficient. So, whether it's better storage or the use of more energy efficient forklifts - there are ways to cut costs.
Technology has much to offer warehousing. It's just important to remember that ultimately it's all about providing on-shelf availability - not the latest technological fix.
Swisslog's new software warehouse manager system (WMS), for example, was installed at Wincanton's Britvic distribution centre in Lutterworth. The WMS improves efficiency by automating key processes from inbound goods arrival to fulfilling outbound shipping orders. At Britvic, it provides a interface between an SAP enterprise resource planning system and the local movement control system for the existing automation on site.
Thorntons reduced energy consumption at its chocolate factory in Derbyshire through the installation of EnerSys Hawker LifeTech chargers for its 100 fork lift trucks. The decision to adopt high frequency chargers was taken a couple of years back when Thorntons appointed Linde Material Handling UK as its new lift truck supplier. "This is part of a wider programme to reduce our carbon footprint," says Thorntons' facilities manager Dan Crow. "We wanted to reduce our materials handling energy bills and lift truck downtime and the EnerSys chargers have helped us do this."
The first batch of 30 trucks supplied by Linde on contract hire included narrow aisle combination stackers/pickers, low level order pickers, reach trucks, electric counterbalance trucks and powered pallet transporters. All 100 trucks on site are now using EnerSys chargers.
"We ended up projecting a £14,000 saving on a £7,000 investment, says Crow. "For the wider business this is a relatively small figure but it roughly equates to the cost of renting two lift trucks a year, so in the materials handling context it's significant. The initial cost of the truck is only around 10% of the whole life cost so operational savings are important."
High density storage
Racking specialist Dexion Planned Storage Systems (Dexion-PSS) says many firms are now using high density storage to maximise space.
Dexion-PSS sales consultant Gordon Cossar says that, traditionally, it has often been impossible to access individual pallets with high density storage, so it has been restricted to operations with very few stock keeping units (SKUs). To improve flexibility, Dexion-PSS has developed a relatively simple, low-cost system called Satellite for automating high density racking jobs. It promises first-in-first-out (FIFO) stock control but at a fraction of the cost of dedicated dynamic FIFO systems.
"If you take a full dynamic FIFO system you are probably talking about a cost of between £180 and £200 a pallet," says Cossar. "With a Satellite system it would be between £100 and £120 a pallet. But that in itself is not it; if you can't increase your throughput and increase your occupancy rate, I would honestly be surprised." The Satellite system is designed for applications handling an intermediate number of SKUs (typically 15 SKUs per 1,000 pallets). Cossar claims it is ideal for frozen food storage because its laser positioning device guarantees sufficient gaps between loads to ensure that potential "hot spots" are avoided.
Despite the economic gloom, warehouse operators in the food and drink sector appear to be holding up better than most. Roger Williams, chairman of the UK Warehousing Association, which counts many food and drink firms among its members, is upbeat. "The food sector is quite buoyant for us," he remarks.
Jonathan Baker, commercial director of cold storage and distribution specialist Yearsley Group, says: "There is pressure on space at the majority of our sites due to increased demand for frozen foods, as consumers look for value during the credit crunch."
He also notes that the haulage side is struggling to make money due to high costs of fuel, etc, and the difficulty of passing these on to customers.
However, Baker adds: "There is more focus from our customer base on environmental issues and carbon footprint."
Last year, frozen food distribution business Reed Boardall extended its operation at Boroughbridge in North Yorkshire with a £7M cold store expansion, which increased its capacity by 24% to 112,000 pallet spaces.
Group md Keith Boardall says: "We expect volumes to continue at the current levels although - as price cuts and demand for lower value goods kick in - the mix of products within that volume will undoubtedly change."
Clearly consumers switching to frozen rather than chilled foods is altering the dynamics to some degree for third-party logistics providers (3PLs). But, despite this, some chilled 3PLs, such as NFT, remain fairly optimistic. NFT has just secured a new two-year primary distribution contract with chilled pizza manufacturer Stateside Food.
Under the deal, using its 75-strong shared user distribution network, NFT will collect over 4,800 pallets a month and deliver them to retailer-owned RDCs. NFT chief executive, David Frankish, says: "The latest contract has contributed towards substantial growth in demand for the network over the last year."
Stateside purchasing manager, Graham Thompson, adds: "The transport solution is extremely efficient and competitive, helping us minimise our environmental impact through increased load fill and efficient planning."
There you have it: it's not just the sheds that are going green, but the kit in them and the networks that shift stuff between them. FM
Buckingham Group 01280 823355
Dexion-PSS 01793 694071
EnerSys Motive Power 0161 727 3800
Gazeley 01908 838100
NFT 01773 523523
Reed Boardall 01423 321322
Swisslog 01527 551600
Wincanton 01249 710000
Yearsley 01706 694605