Hi there, you may recall from an earlier post that we have managed to cancel out any storage increases to SCS customers for four years due to an initiative we have launched to convert 60% of the 11 Timberly facility to VNA (Very Narrow Aisle) racking, supporting this we have secured two very large turret trucks from the US through Crown, these cost 160k each. This project has allowed us to mitigate a storage increase through optimising our footprint and as such the next increase is not due for discussion until late 2017. This is great news as the market is particularly hot at the moment, e.g. Goodman is at 100% occupancy, rental rates, like house pricing, is shooting up, we’re even hearing of landlords now charging for yard space (traditioanlly we pay for warehosue canopy and office).

The re-racking project is huge, we are transferring around 7000 pallet position over a 24 day period, well over 10,000 sku will be involved across 30 odd clients. For the most part it is going brilliantly and we only have 10 related inventory misplacement issues currently, we are operating 24/7 and doing most of the transfer work at night so as to not disrupt the flow of operations during the day. It is a complex project integrating the transfer team with the racking team, with the line driver team (they install wires in the concrete for the hoists to run on) with the day shift and everything is literally timed to the hour.

Whilst most clients will not know this is happening it has not been without its challenges, notably the racking installation guys made a reasonably large error and did not follow the dimension instructions for the first four aisles and we have ended up 136mm short in these 4 rows which is bad, this technology has very fine tolerances and this exceeds our thresholds, the flow on effect of this is that it immediately slowed down our project timeline, this caused the transfer team to rush in order to keep up with the day shift and this rushing has caused some inventory misplacements .

The good news is that we have adopted a plan B on the fly by throwing two more senior staff at it, the inventory misplacements were up over 30 on Friday but are now around 10 and things are essentially back on track with the original timeline.

I’d like to appologise to clients who have experienced interruption based on any inventory miss-locations, ten does not sound like a lot but it is, one miss-location can cause enormous grief, as you know we pride ourselves on the highest inventory accuracy in our industry and we know the flow on effects that not placing our hands quickly on stock as required can create for you. The main project is due for completion on the 24th of this month and at that stage we will be fully operational however the 4 incorrectly installed rows are slowing us down, we’ll fix that issue within the following 4 weeks after the 24th. As the main re-racking project completes any miss-placement issues not solved by the 24th will be handed over to a dedicated inventory team I’m building to mop up any stragglers.

So appologies if you are the recipient of a miss-location, we’re onto it and things will be back on track in a couple of weeks. If you have any concerns please feel free to contact me directly

Cheers

Brad