The Dexion approach to building design
The Dexion approach to building design
Keywords: Building design, Supply chain management, Competitive advantage
Traditionally, most new warehouses are built before equipment suppliers, who will install the operational structure of the unit, ever get a look in. This seems to make some logistical sense, since the developer needs to put up a building in order to attract tenants, and the tenants themselves need to then decide on the equipment to be fitted. The problem with this approach is that it is fundamentally flawed, however, and does not deliver the best results to the tenant or, ultimately, to his customers.
In the age of supply chain management, the warehouse is no longer just a store space, it is the heart of the entire holistic business system which is focused on improving customer service, leading naturally to improved sales and profits.
The investment in a new or re-organised warehouse is increasingly justified in terms of a business rather than a building cost, with financial and performance concepts taken into account. These will need to show how the warehouse will contribute to company objectives concerning competitive advantage, cost reduction, improved speed of service, reduced customer complaints, improved satisfaction, and the management of product variety –and how it can do all of this with a reduction in inventory and distribution costs. This is a far cry from the days when the warehouse was just an "out-of-town shed".
Architects need to understand these concepts so they can give their cliems a building which most effectively meets their business needs, while corporate planners and project managers also need to appreciate that better returns come from looking first at performance parameters instead of building aesthetics. The alternative is to design a structure which looks wonderful and reflects the corporate image of the company perfectly – but loses thousands of pounds in revenue year after year until it is retrofitted or redesigned. The first approach is the route to client satisfaction and repeat business, the latter will ensure that the architect never works in that town again!
The big "If only's" of building design
At Dexion, we often find ourselves in an "If only" position with our customers, where we are faced with a fait accompli in the shape of the empty shed of an already-built warehouse which now needs to be fitted in the optimum way. Invariably, the customer's objective is the most effective layout of storage and handling equipment to meet their defined business strategy, or that of their client if our contact is an architect – and a building which was not put up with the same target in mind!
Even something as simple as the layout of lighting and sprinkler systems can have a major impact on warehouse performance and on the bottom line. Imagine,for example, that your own company took tenancy of a new building in which standard lighting has been installed and a sprinkler system fitted. You will be paying for this work in the cost of your tenancy or purchase of the freehold– but what are the chances of these installations being exactly sited to meet your precise operating needs, especially if you are stacking thousands of pallets of goods in a racking and storage system?
The answer is slim, to say the least. More likely, the lights will be exactly where you don't want them, meaning you are unable to go as high as you need to with the racking in order to meet your storage, throughput and delivery targets. Sprinklers will also probably be in the wrong place – directed right over the area where your most costly and water-perishable stock is held, so in a fire(or even tests), thousands of pounds worth of goods could be damaged, entirely unnecessarily.
There is an alternative: you can remove the lighting and the sprinkler system– at your cost – and then pay to have new systems fitted. Of course,if you had been able to have a say in the planning of the warehouse itself, all of this cost would have been wholly avoidable. We sometimes see, for example,new warehouses being built which do not even need lighting or heating since they are designed as fully automated robot-driven units, and machines do not need lights or heat. Even installing lighting in a building like this is a waste of time, money and resource, which could be better spent elsewhere.
A very frequent occurrence, when we are asked to install our equipment at newly-built warehouse units, is that for the want of a mere additional 30 centimetres or so in building length, an entire extra line of racking must be denied to the client. This is a lost business opportunity which goes far beyond building aesthetics to the very heart of financial performance, and could have made all the difference to the customer. Another "If only".
If only this missing 30 centimetres had been available, the extra row fitted,at, say, 12 metres height, might have accounted for 5 per cent more productivity. Where financial success is measured in terms of profit-per-pallet,this is no laughing matter. The very tight margins under which supermarkets operate, for example, means that 5 per cent – or even 0.5 per cent –additional productivity might well be a godsend. If you assume a 7 per cent margin on a turnover of £l million (£70,000), for example, then an increase in turnover of 5 per cent represents an additional income of £3,500. Given the turnover figures that supermarkets actually talk in, that missing extra row probably represents an annual cost of hundreds of thousands of pounds.
The reverse is also true, of course, and so the lower capacity of our too-short warehouse might actually now have a measurably detrimental impact on product availability from stock, throughput and speed of response – all crucial aspects of warehouse operation for supermarkets and retail convenience stores, and for customer satisfaction.
The cost of an additional 30 centimetres on a typical 75,000 square feet warehouse is minimal at the blueprint stage but is probably not financially feasible as a recovery or damage limitation exercise.
A number of other common problems stem from not looking at the whole business need and area of operations. Architects need to bear in mind, for example, that 50 per cent of the site space will immediately be lost to the needs of vehicle marshalling and staff car parking, and a further 20 per cent of warehouse space will probably be devoted to the unloading and assembly of loads. Thus, when a client briefs the architect on his throughput and storage needs from the building, it needs to be borne in mind that what he is actually talking about is achieving these needs on a site which is really only 30 per cent of the total area.
The problem with floors
The building infrastructure also needs to be considered alongside the objectives for the supply chain management system. The typical loading for warehouse floors, for example, is 50kn per square metre (1,000lbs a square foot). But point loads from racking columns and forklift trucks can be much higher than this, which could cause floor damage in the long term. This is another reason why it is so important to understand fully the usage and functioning of the building.
The same can be said for floor level – a few millimetres variance from true at ground level can translate into several centimetres difference at a height of 12 metres, which can affect stability and also narrow aisles and gangways to make crane and forklift operation much more difficult.
Curing time is also important. In a cold store, for example, pressures to complete the building might mean that inadequate time is given to curing and the floor is then frozen at, say, 75 per cent hardness. Over time, of course, and especially if the cold store is turned off, this will have a major impact on floor effectiveness. When the system is turned off, the floor returns to 75 per cent of its desirable hardness, which can mean problems of durability.
Other issues to look out for with floors are:
Dust. A lot will be thrown up in the process of laying a floor. One company,anxious to start using their warehouse, moved in stock at one end of the building while the floor was still being laid at the other. This company made packaged foods and sandwiches and had just won a prestigious contract with a very well known and respected high street store, which is why they needed to move in so quickly. When the sandwiches were delivered, however, they were covered with dust. Their contract lasted a week.
Chemical and spill resistance will also be important in some industry sectors.
Finally - and especially, again, if there is pressure from the owners to use the building while work on floors (and other areas) is being completed –bear in mind that dust and dirt will also be thrown out all over installed equipment. Whose job is it then to have this cleaned prior to official hand-over– and who pays? A warehouse space of several thousand square feet, fitted with rows of high bay racking many metres high is not an insignificant clean-up job and will cost a lot of money if done professionally.
There is a better alternative to the "If only" scenario, one which Dexion has pioneered over the last several years. That is to begin working with architects and project consultants as soon as they are appointed by a corporate client, or by a developer who has a potential tenant for the site. This allows the project team to build the warehouse from the inside out, thereby ensuring that it will meet all of its future occupier's needs.
Such needs are not only structural, but go to the heart of their business relationship with customers.
Inside-out development
To be truly effective, any design must take into account the nature of that company's business, its products, the expectations of customers, and the logistics of the distribution system in terms of necessary throughput and required speed of delivery. In fact, every aspect of supply chain management must be allowed for since all will influence the flow of product through the warehouse.
A few years ago, we were approached by an enlightened architect – with a problem. His client had given his firm a very detailed description of their needs and asked him to design a warehouse for them in order to meet these. He had done so and produced a very elegant solution to the challenges set for him. His problem now was that his client could not actually afford the building he had designed and he could not see a way to reduce the cost and still meet their specifications.
By re-designing a solution from the inside out, however – beginning with the storage and handling equipment the client would need – and then developing the building around this, we were together able to achieve the same result in a building just 75 per cent the size of the original design. This, the client could afford.
The outcome was a delighted client who got exactly what he wanted, and a delighted architect who got the job and produced a building he could be proud of. A win-win situation which proves that everyone can gain by approaching the problem from the correct angle.
Had the architect tried to argue his position and the client resisted based on cost, no one would have won. The architect would have lost the commission and/or the client ended up with a less than effective job which, far from saving money, would have cost them more in the long run in terms of lost opportunities,warehouse running costs and product throughput inefficiencies.
The "inside-out" approach is very different from the accepted route to building design and construction and may at first seem quite radical. But the fact is that architects see the logic in it too since, when they are able to save clients money because they understand the inner working, the guts, the purpose, of the building, they are allowed, in turn, to do more on the outside to satisfy their own creativity. As one architect once remarked to us: "even gold-plated handles and a marble lobby are neither here nor there to the client now, since he is saving thousands of pounds a year through increased productivity, and meeting all the performance targets set by head office".
And, in fact, by following the inside-out approach, it may just be possible to give a client the warehouse he wants at practically no cost at all, as our experience with Wedgwood has shown us.
The secret of "free" warehousing
Josiah Wedgwood & Sons Ltd originally ran five warehouse and distribution centres in Stoke-on-Trent, which together housed some 19 million stock items.
When the company decided to replace out-dated warehouse operation systems, it began to look also at its whole approach to storage and distribution. As a consequence, Wedgwood called in Ryder Integrated Logistics who asked Dexion to create a more effective supply chain management solution, with the business aims of improved storage, faster order fulfilment, and greater customer satisfaction.
This smart strategic thinking by the management of Wedgwood would eventually empower the company to achieve significant annual savings on its warehouse operation costs by streamlining and rationalising its storage and handling functions, which meant that the new facility essentially paid for itself over a very short time frame.
Ryder's approach was to focus on the development of a new 12.5 acre global processing centre, located at Stone in Staffordshire, rather than the overhaul of the five existing warehouses.
Dexion began by planning the racking, storage and internal conveying systems for the new global centre, to ensure that it met all of Wedgwood's targets for stockholding, throughput, and timely delivery to its worldwide customers. The building was then designed by the architects around this internal structure and,finally, land was purchased in Stone to enable the construction – quite the reverse of most typical projects.
The result is an 11,600 square metres warehouse, with a further 930 square metres of office accommodation. The Dexion design includes space for 3,500 pallet positions, configured seven high across five very narrow aisles (VNAs),each 1.2 metres wide. A two-tier Dexion modular shelving system is employed,consisting of 20,000 standard shelf positions, configured for up to 80,000 individual locations, via a mezzanine floor.
A gravity roller system accommodates 3,500 totes of fast-moving product lines, with secure storage, and fast access to slower-moving, high-value products.
A total of 42 packing stations are included, 28 of them located on the mezzanine level. More than 700 metres of Dexion conveyor system services the picking and packing areas.
The facility was deliberately planned for future expansion. Its two-tier design can be easily expanded within the 11 metre high building, to create a third level, and two sacrificial walls were also included, enabling a further 25 per cent expansion to the side, and 20 per cent expansion to the rear. Internally, there is ample room for another l 4 packing stations, allowing up to 33 per cent greater capacity.
Three million pieces of ware, across some 10,000 product lines, are held in the new processing centre, with throughputs in the order of 100,000 pieces a day. Ware is received either in plastic totes from local manufacturing sites, or loose from outsourced suppliers.
The VNA racking area is used for bulk packaging materials and reserve stock of fastest-moving lines, while totes of slower-moving lines are fed to the appropriate shelving zones via the conveyor system, for decanting and loose storage ready for picking.
All picking is in totes, fed from zone to zone via conveyor. Picking for fastest-moving lines is from 500 lanes of gravity rollers, where stock is held in totes and replenished from the VNA pallet area. Totes are directed to nominated packing stations for customisation by packaging and labelling, and made ready for despatch.
All packing benches are on-line to the computerised warehouse management system, for real-time monitoring of all activity, and production of customised documentation and labels.
The total cost for this new facility, including all storage, handling and conveying equipment, was in the order of £12 million. But by implementing this design, Wedgwood was able to make huge savings from even the first year,giving a payback period for the entire new facility of just months. The net effect was a better warehouse and better supply chain management, with little to no detrimental impact on the bottom line.
"This 'inside-out' approach to warehouse design is one that we have pioneered and promoted for some time now", says Adam Buck of Dexion, who handled the project for Wedgwood. "We are always delighted when our clients see the logic of this and allow us to work in this way, as it really enables us to do our very best for them and to deliver a system which is extremely effective and very cost-efficient at the same time."
"We are delighted with the impact which Dexion has had on our company",said George Stonier, operations director for Josiah Wedgwood & Sons Ltd."The new installation, and the approach that Dexion took to its design and planning, has enabled us to reduce lead times while improving customer service and raising productivity."
Dexion is currently embarked on a number of presentations to architects'practices throughout the UK. If you would like to learn more, or to schedule a meeting with Dexion, contact Rod Webb on freephone 0800 581531.
For more details: Ross Heaven – Head of Public Relations, Blaze Business to Business, Oakley Hay, Corby, Northants, NN18 9AS. Tel: +44 (0) 1536 744515;Fax: +44 (0)1536 744115.
Rod WebbDexion
