As our acquisition strategy developed, it became apparent that our clear focus on fluid power would enable us to consolidate some of our core business functions in purchasing and logistics and create a centralised service from which all Group members and their customers could benefit.
All businesses within the Group are renowned for exceptional service and it is important for us to protect and enhance this service externally to customers and internally to each other. We have a clear strategy to develop our existing logistics facility, leveraging off the unrivalled service levels that we deliver to the fluid power market at present, for use by all our internal operations.
The last two years have seen the transformation of the FTUK distribution centre into a new office complex and much improved logistics centre with increased capacity which will service and add value to our existing customers but also expand across the whole fluid power market, delivering to our own businesses and to OEMs across the UK and Europe.
A shift towards centralised purchasing of common products across the Group enables us to benefit from economies of scale. Strategic bulk purchasing of these product lines required additional space in quickly accessible stock locations to service all members of the Group and in some cases direct shipments to their customers.
Working with Kardex, the supplier of our vertical product storage and retrieval lift systems, we installed three new lifts, creating a total of 16 lifts. Each lift has a footprint of 4.5 sqm, 3,000 product storage locations across one hundred shelves, each shelf able to hold up to 500kg, meaning across the three new lifts we have created an additional 133 tonnes of product storage, increasing our capacity by 35% and consolidating stock into one picking zone. It was also important to increase our capacities in other areas; to that extent we increased our bulk storage capacity by over 2,000 new pallet locations (25%), which will enable us to further consolidate our purchasing and accommodate bulky items for the Group.
Important consideration was given to the existing warehouse layout and resultant changes have enabled logistics operational efficiencies to be improved without the need to employ additional employees. Moving the despatch team 50 metres, immediately next to the lift systems, where 80% of products are picked has improved the speed at which tasks are done, allowing us to cope with extra demand from other Group companies without any additional resource.
Goods-in has relocated to a more user-friendly area and investment in mobile booking in terminals with tablets, handheld scanners and printers has created a more flexible area and reduced equipment costs. The onsite collection point has moved to the front of building with tablet browse and ordering technology for increased customer convenience.
We needed to create seamless links from our order processing to service, pick, pack and despatch and to this extent we work closely with Kardex and our own IT support teams, to develop systems which link directly through our standard picking routines. The new Kardex machines include a double tray configuration which presents the operator with two trays simultaneously, and holds a third in the background, decreasing the waiting time by 30 seconds per transaction across 4,500 transactions per day. The picking time window has narrowed which frees the department to concentrate on other tasks and has enabled us to maintain our high operational efficiencies and achieve over 99.5% fulfil rates.
As a result of these changes, the logistics centre has increased output by 10% over the year, using the same number of employees and no additional overtime.
Safeguarding for the future
Our growth strategy includes a strong acquisition pipeline. Width of product set is critical to our growth. In such an evolving business we have to make provision for future expansion to ensure we remain the market leader in our field. We have the capacity to install additional lifts, and this ensures we can expand our current operation to support our companies, our customers and industry as a whole.