Some pharmacies in Birmingham and the West Midlands should start receiving deliveries from AAH Pharmaceuticals's new £9m warehouse next month, AAH has revealed, with final deliveries from the company's two existing warehouses in the area being made in February next year.
Speaking to The Journal during a press visit to the almost complete warehouse on September 8, Mr Mark James (wholesale operations director, AAH) explained that the new depot, officially known as Nexus Point, would replace the former Vestric site at Kingswinford and the former Lloyds central distribution centre at Atherstone. The new depot is situated at Perry Barr, close to central Birmingham and adjacent to the M6 motorway.
Mr James said that the old depots had lacked space for expansion. A logistics company had analysed the locations of all existing and potential customers served by the two depots and pinpointed an area close to central Birmingham which would be the ideal location for the new depot. Three or four potential sites were considered before Nexus Point was chosen in October, 1998. Building work at the site started at the turn of the year, with AAH gaining access to the building for the first time in June.
During The Journal's visit, the final installation of the racking and automated picking systems was being made. Once this is completed, AAH is to purchase sufficient stock completely to fill the warehouse so that full system testing can proceed by the end of September.
The first customers, mainly Lloyds Pharmacy branches, are expected to start receiving deliveries from October 11, although Mr James said that the benefit of a new depot was that the company could hold back on opening it until it was ready. In the first phase, lasting a few weeks, only about 10 per cent of the existing customer base will be served by the new depot. By Christmas, about half the existing customers will have been transferred. This will allow excess capacity for peak demands over the extended millennium holiday period. Final closure of Atherstone is expected in the new year and Kingswinford by March at the latest. Both sites will be sold.
Mr James said that the new depot built on experience gained from AAH's depot refurbishment programme since it had been acquired by Gehe in 1995, and in particular the refurbishment of its Glasgow depot (PJ, October 17, 1998, p608).
The aim of the design of the new depot was to achieve a "straight through" flow of products, he said. Behind each automated picking line there was shelving holding outers of products and behind that racking holding whole pallets. Thus, to refill a picking channel or shelf, staff only had to look to the next level directly behind rather than having to consult the computer each time spare stock was needed.
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Final installation work being done at AAH's new Midlands depot. It will be fully stocked for testing by the end of September |
One innovation AAH has made in the new warehouse is that the conveyor system carrying the tote boxes, in which individual orders are dispatched, has been lowered into the floor where it passes under the end of the belts from the automatic picking lines. This minimises the drop the products make into the box and also allows an additional 100 boxes per hour to pass through the system. At full speed, the system is capable of handling 2,500 boxes per hour.
Mr James said that once the new depot was opened the company would be turning its attention to its depots at Ruislip and Romford. These would undergo partial refits incorporating some lessons which had been learnt from the new depot. Then it was planned to undertake a major refurbishment of the Bristol depot in the middle of 2000 and smaller investment, such as the introduction of tote boxes, at its other depots.