DC Velocity - April 2014

At best, its analysis showed, by taking on an adjacent site at one of the facilities and installing a bulk automated storage and retrieval system (AS/RS), the existing operations could provide just under 30,000 pallet positions—far short of expected requirements. Further, adapting the existing facilities would not provide the flexible order picking systems needed. That led to the decision to explore construction of a greenfield facility—and building the business case to persuade UTi’s board that the investment made sense.

As for how big the new facility would be, the initial design concept indicated that a 50,000-square-me- ter (538,195-square-foot) building would meet UTi’s needs. In late 2009, the company began soliciting proposals from construction firms for the building and proposals from three major material handling equipment manufacturers it had worked with in the past for the equipment.

Van Rensburg emphasizes that UTi left it up
to the equipment manufacturers to suggest what
specific technology would work best. The initial
design proposals came back in April 2010. Those propos-
als provided UTi with options that varied from a very-
narrow-aisle operation to a wide-aisle concept to an AS/
RS-centric operation. The AS/RS proposal had the lowest
staff requirements of the three, would limit access to stock
(important for security reasons), could be operated with
the lights out in much of the building, and was overall, the
lowest-cost solution, and that’s what the company
selected. The final design included a large bulk AS/
RS, a cross-belt sorter, and other technologies.
The property developer broke ground in May
2011, and the facility began operations in October
2012. The old facilities were completely closed by
February 2013. One key requirement in the process
of shifting operations was to minimize disruption
to daily activities. “That was quite interesting and
quite stressful,” van Rensburg says. “We distribute
around 55 percent of all pharmaceuticals in South
Africa. We could not disrupt the market.” But in
the end, the process worked. While there were some
disruptions, he says, they were not significant.
Construction delays, though, did lead to one
problem that in retrospect, the managers would
have handled differently. Adrienne Youell, one of
the UTi managers who led the project, explains
that the original plan provided for three months of testing
before opening the facility. But the construction delays cut
into that time. And failure to vacate the facilities the com-
pany was leaving would have been costly. That forced UTi

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