U.S. logistics firm beefs up Canadian operation

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A U.S. -based automated material handling firm is consolidating operations in Canada in the hopes of cornering the local market on integrated logistics service.

FKI Logistex, headquartered in St. Louis, Miss. said it will merge three existing Canadian divisions – airport, post and parcel; warehouse and distribution; and manufacturing systems – to “create a single, go-to-market entity” in the country.

“Canada represents a real opportunity to further spread our product and service offerings,” said Steve McElweenie, a Toronto native, who was appointed vice president and general manager of FKI Logistex Canada Ltd.

The company’s three divisions formerly targeted customers specific to their areas of expertise. However, McElweenie said consolidation will bring these divisions under one central organization.

The divisions can also benefit from each other’s collective experience in their fields. “Things we learn in one market can now be easily applied to another sector of the business,” according to McElweenie.

“With this strengthened organization, FKI Logistex is further committed to supporting Canadian companies and organization with their material handling automation needs,” said Steve Ackerman, president, FKI Logistex North America.

FKI provides integrated products and services such as high-speed material sorting, baggage handling and warehouse control systems, automated storage and retrieval systems (AS/RS), radio frequency ID (RFID) tagging, and explosives detection systems (EDS).

Among the company’s Canadian clients are the Ottawa International Airport, Canadian Tire Corp., and drug manufacturer Apotex Inc.

FKI helped draw up plans to increase efficiency and accuracy of pallet handling at the 400,000/sq-ft TorPharm warehouse in Etobicoke, Ont. TorPharm is one of four pharmaceutical firms in the Apotex group.

“In the old environment, we had inventory accuracies from 60 to 70 per cent in terms of having pallets in the right places and at the right quantity. But a class A MRP (manufacturing resource planning) environment needs to have perfect accuracy,” said John Sebben, vice-president, operations, TorPharm.

One of the areas that FKI improved efficiency in the warehouse was in the order picking process.

Traditionally, orders forms for materials were merely printed documents generated by the MRP system. The forms, which contained the pallet number and location, were handed to a crane operator who then searches for the pallet.

A radio frequency (RF) system integrated to the TorPharm MRP now handles the requests. Once an order is created in the MRP system, it is transmitted by the RF system to an RF-enabled handheld unit that crane operators have.

The crane operators can also print out an RF label from an onboard printer and attach this label to the pallet they just picked up. The label enables the automated tracking of the pallet as it goes through the distribution channel.

Sebben said TorPharm was able to achieve 99.99 per cent location accuracy and 99 per cent quantity accuracy.

Automated material is prevalent in large enterprise corporation but is increasingly trickling down to mid-sized companies, according to a Canadian analyst.

“Adoption is being driven by public health and safety regulation compliance and efficiency needs,” said George Goodall, research analyst, Info-Tech Research Group Inc. in London, Ont.

For instance, RFID tagging is being used by a Prince Edward Island-based abattoirto meet rigorous traceability requirements.

However, with the growing number of technology and vendors in the market, most companies planning to deploy an automated material handling system are having a hard time, he said.

There are some pure play vendors but a majority of the new ones originate from various industries, Goodall said.

Most customers, he said, are looking for systems that will streamline order picking and automate the management and tracking of material.

Warehouse management systems can cost a medium scale business anywhere from $100,000 to $250,000 while systems aimed at enterprise organization can cost $1 million or more, Goodall said.

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