Building a better warehouse instead of a bigger one
As the country’s largest importer of olive oil, Rome, N.Y.-based Sovena USA has seen its business grow in recent years. The company was looking to expand its operation and had room to grow the physical space, but looked for another solution. Working with supplier Pengate Handling Systems, a Raymond Corp. supplier, Sovena was able to address this space issue without adding any more bricks or mortar. Key members of the team that put this project together talked about how to look at space in a new way.
Jeff Leclau, warehouse manager, Sovena USA: Even with an 180,000-sq-ft facility, we struggled to find a way to expand. Initially, it was challenging for our organization to determine whether to expand our facilities or to find a way to optimize our current space. While we had the capacity to expand, we were looking for the most advantageous way to accommodate additional importing and distribution needs.
In working with Pengate, we were able to optimize our current location by implementing a very narrow aisle (VNA) concept, tearing out all the existing racking and installing narrow aisle bench storage and pushback racking. We also were able to improve our material handling flow by segregating and storing like items or types together, which has allowed us to store more goods on-site and eliminate the needs for an offsite warehouse. As a result our lift truck travel time for picking and putting away orders has decreased, therefore increasing our efficiency.
Randy Belliboni, executive vice president, Pengate Handling Systems: When Sovena turned to Pengate for its restructuring needs, Pengate had the option of expanding the company’s current space or utilizing the existing warehouse more efficiently to accommodate its increased business needs. Over several months Pengate worked with Sovena to understand the product flow, lift truck velocity needs, and increased storage requirements in order to make the proper recommendation to either expand or maximize the existing building.
The new layout achieved the increased number of pallet positions needed to keep up with increased business levels. Pengate and Sovena were able to measure the ROI by monitoring the increased pallet moves, productivity, and storage capacity. The company also was able to project a return on its initial investment within 3.75 years.
Leclau: The decision to improve our current layout and operational plan was based on the input of two teams. Team A had to keep the footprint the same while doubling the space (pallet positions). Team B was given the task of designing a physical expansion that would accomplish doubling the space the same as Team A. In the end, Team A won out, especially because the bigger building would have resulted in an increase in costs, such as income taxes.
Pengate played a key role in helping us make this decision. Our goal was to be able to accommodate a growth rate of 10% to 15% over the next 4 to 5 years. In assisting our team in making this decision, Pengate conducted facility visits, guided various input sessions, and presented what it thought was the best solution for our business. From there, our team collaborated with Pengate to finalize the solution and moved forward with a reconstruction that would service about 15,000 positions.
It was Pengate’s unique understanding of our business, from finished goods and raw materials to the loading and unloading of our materials, that gave it the edge.