How you organise your throughput matters more than size Ð K&N

WHEN IT comes to warehouses, it's not the size that counts but how you organise your throughput, says Kuehne & Nagel South Africa's general manager Ð logistics Dirk-Henning Stuhr. Warehouses are no longer facilities for the retention of cargo but integrated key elements of the supply chain, with commodity types dictating the number of stock turns necessary. "Whereas in the past you may have had a stock turn twice a year and all commodities were treated equally, today it's a vastly different scenario," says Stuhr. "Every industry has its own demands. For the automotive industry, for example, just in time is very important and that's why we have a stock turn every three days. Five years ago it might have been twice a month. Now it's 7-8 stock turns a month and up to 100 a year." The function of the warehouse has also changed in terms of the general philosophy of logistics. Whereas in the past you were only looking at your production on the supply side, today it's the opposite - it's a pull system with the consignee calling the tune. "You're looking more to the end market rather than the supply side." In order to ensure stock availability, however, you need sophisticated systems which tell you just how much stock to build up. "A lot of industries expect a reaction time of next day which makes warehousing much more important. Not only do you need a strategic centralised location from which you can supply but you need the IT capability to match, and this is where Kuehne & Nagel comes on strong. "We have a corporate warehouse management system which means all systems are connected to each other offering the customer visibility from the moment his goods move into our warehouse. The next stage, which is due for completion by the end of the year, is to have the connectivity of all warehouses worldwide with the global shipment track and trace system. "This will provide full visibility via the internet." Annually the company spends 50 million euros on IT, part of which involves its warehousing management systems. "Every industry and every customer has its own demands," says Stuhr. "We make sure that our systems are built around the clients' needs." Kuehne & Nagel's Jet Park-based warehouses comprise a 2 200 square metre multi-purpose facility as well as 5 800 square metres dedicated to one customer only. Plans are afoot to build an additional 6 000 square metre facility. In Cape Town the company has 2 900 square metres at the airport. "By the end of the year we could be operating around 15 000 square metres distributed over different levels." Prime target markets are the automotive, in-flight catering materials, hi-tech and pharmaceutical industries. Security is high priority, says Stuhr. Apart from 24-hour surveillance, a staff incentive scheme ensures that pilferage is kept at zero level.