Most people are overwhelmed by the choices available, from logistics gurus to the multitude of industry related books, courses and workshops as well as the ever-increasing technology in the warehousing arena. Questions like size, location, sophistication of warehouse management systems, choice of material handling equipment, skilled resources, and outsourcing or DIY are commonly asked questions when deciding on a capital investment that has far-reaching consequences and could, if not done correctly, cripple a business.
Value Logistics, one of the biggest local players in warehousing and distribution, has this recipe for success clearly defined with its flagship, Value City, a multi-principled mega warehouse situated at Tunney, Gauteng. Value Logistics was recently honoured for this extraordinary facility with a Gold Award at this year’s LAA for the company’s contribution to supply chain ingenuity.
Value City, built on 264 000 m2 of land with a total of 91 457 m2 warehousing, hub space, transport offices and administration offices, was conceptualised and brought to life by Value Group CEO, Steven Gottschalk. The rationale for the birth of Value City was largely influenced by the changing market, customer requirements and rising costs. With the ever volatile price of oil, inadequate road infrastructure, increase in customer product lines, added complexity in chain store deliveries and mounting cost of operating decentralised warehouses the writing was on the wall – find a solution that will provide a cost effective platform for sustainability.
In 2003, Gottschalk, a successful entrepreneur with 23 years logistics experience, knew that the success of a project of this magnitude would depend on ensuring that the basics were done right. Before embarking on the building and design of this facility, a task team was appointed to research best practice warehousing principles. The team travelled to many of the top facilities in Europe and brought back ‘best of breed’ benchmarks to incorporate into the design.
To avoid the pitfalls of silo mentality the strategic project team adopted a dynamic methodology that concentrated on combining the critical pillars of warehousing through a holistic approach which, when looking at the rising accent of Value Logistics, proved to be a winning decision.
Best use of space
Space is becoming increasingly expensive and in short supply which is why careful consideration was given to optimising the warehouse design for maximum utilisation through a combination of various racking options, maximum height exploitation and most advantageous material handling equipment. Bulk racking of up to 11,5 m high allows pallets to be racked 13 m to the eaves, which effectively provides 30 percent more space than standard warehousing norm. Various racking combinations were implemented to increase efficiencies. Shuttle racking for high volume movement combined with bulk racking has been successful in this fast-moving efficient environment.
Adding to optimal throughput are the 142 receiving and dispatch doors with a total of 111 airbag dock levelers allowing for fast and effective loading and off-loading thereby reducing bottlenecks. The care in attention to detail is again highlighted with the selection of the airbag dock levelers. In making the decision to move away from the norm of hydraulic to electric dock levelers results in avoiding oil spillages as well as making this a cost effective option in terms of the low maintenance of this equipment.
Control of stock movement
The challenge in a multi-principled warehouse of this size is flexibility to meet specific and often unique requirements of each of the principals. Robust technology and customer-specific product trained staff has played a crucial part in adding to the success of this facility. RFID scanning and barcode tracking and tracing are used throughout this facility adding to the precision within the operation.
Customer needs
With the ever-changing market, the success of service providers is dependent on listening to and acting with solution-driven flexibility on the needs of their customers.
What the customers wanted:
• A strategic partner that can provide flexible ware-housing to support their growth strategy
• A secure, world class facility that is aligned with their superior branding
• Vehicle optimisation
• Reduction in service failures
• Stock Accuracy
• Consolidation to leverage economies of scale
What Value provided:
• A centralised industry solution where economies of scale are leveraged through bulk consolidation
• Enhanced customer relationships with improved service levels and peace of mind with world-class security measures
• Increased vehicle optimisation by 38 percent
• Increased stock accuracy to 98 percent
• Increased volume of 142 percent
• Decreased pilferage to 0,0012 percent
• Flexibility to offer customers the platform for growth within the modular warehousing design
Environmental consideration
More and more focus is being given to providing solutions that are environmentally friendly. In this regard, focus was given to waste disposal, the use of natural light in the warehouses and borehole water for the facility. Ongoing consideration is given to the environment with control of carbon emissions through the deployment of a new fleet management system early in 2009.
Load consolidation
With a delivery network of 10 000 drop-points, routing and planning, as well as optimal consolidation, could prove a logistical nightmare to many companies if they aren’t geared for this. At the Value City facility, load consolidation is managed through a central planning office with the use of sophisticated software technology ensuring that economies of scale are leveraged.
Minimise movement
This facility moves on average 45 000 consignments daily, peaking up to 70 000 during high season. To facilitate the flow of this high volume movement, the three warehouses at this facility are interlinked by two tunnels reducing shuttling costs between the warehouses.
Minimum total cost
Through the centralisation of the total logistics function – warehousing, linehaul, truck rental and bulk distribution
– at Value City, economies of scale could be leveraged contributing to bottom line savings and effective supply chain efficiencies. Pooled resource and equipment, shared security costs and reduction of shuttling between the various facilities prior to Value City all contributed to a positive impact on cost reduction.
Safety and security environment
A high stock holding of the combined principles product at Value City necessitated the deployment of stringent safety and security measures. High-tech equipment and controlled access, combined with round the clock security personnel, are some of the precautionary measures put in place to safeguarding customers’ product. Added features at this facility are off-the-ground high-value security areas with restricted access.
In compliance with safety regulations, in-line racking sprinklers were installed throughout the facility ensuring that customers’ product is safeguarded in accordance with highest safety standards.
In conclusion
Value City’s achievement is ascribed to the company’s back to basics methodology by focusing on the critical pillars in warehousing.
A direct correlation can be drawn between increased productivity and revenue growth on the one hand and meticulous planning and holistic approach on the other when looking at the success of this operation. The importance of continued achievement is underscored by the ongoing monitoring, stringent measurements and improvements, where needed, in line with Value’s unremitting drive for excellence.
Value Logistics has been firmly entrenched as thought leaders in the warehousing arena with this world-class facility, a recipe that the company has started replicating in other parts of the country, which also demonstrates the sustainability of the approach.
East London being the first ‘mini’ facility based on the Value City concept is fully operational and has been awarded the prestigious SAPOA property development award in recognition of excellence for a new industrial design in the Eastern Cape region.