2024 05 16

Enhancing our business resilience and capacity with a new logistics centre

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As we outlined in our strategy 2024-27, one cornerstone of our growth over the next 4 years will be taking on larger, more complex projects. In order to deliver these projects, we are investing in a new logistics centre with much greater capacity. There are other benefits this move will bring as well, including improved processes for our stakeholders and our team.

We sat down with Ignas Stasiukonis, Staticus’ COO, to talk about this new facility. Along with sharing details on what is changing, Ignas shed light on the improvements in efficiency, quality control, transparency, and employee well-being this move will bring.

Tell us a bit about the new facility, and how it is an improvement on what we currently have.

We will be moving all of our logistics activities to a new facility close to our HQ in Vilnius, Lithuania. It is a modern facility (built in 2017) and is located on a 2.9-hectare plot. We will have 10,958 m2 of indoor storage space and 10,700 m2 of outside storage space.

This facility will be used for a wide range of logistics activities, including:

  • material storage,
  • assembly tasks and preparation of materials for production,
  • preparation of profiles,
  • some packing operations, especially for materials that will go directly to the site,
  • quality control,
  • and storage of finished products.

This new facility will give us much greater capacity, and will also centralise all of our logistics activities. As we have grown as a company, we have been adding more and more warehousing space around our factory. At present, we have 3 locations for our logistics, and naturally, this is not efficient or cost-effective.

So, we have been exploring the market for almost 6 months to find a solution. We looked into various rental options and some greenfield opportunities. The rental option we have selected is the best fit for meeting the goals defined in our new strategy.

How does this logistics upgrade align with Staticus’ long-term strategic goals?

We have looked towards the future with this decision.

In fact, securing it represents a huge step towards achieving our planned growth, as defined in our 4-year strategy. We are aiming to enter new markets, secure larger and more complex projects, and hit €250 million in annual turnover. To achieve this growth, more capacity for our logistics operations is a must.

We are committed to ensuring our business’s resilience while we grow. This informed our decision to choose a rental option for our new logistics centre. This provides us with more flexibility and represents a more secure option in terms of our long-term resilience, as no capital investment is required.

This new facility will also help us hit a key Must Win Battle (MWB) in our strategy — Smarter Work. This MWB includes initiatives to increase automation and boost our efficiency. Consolidating our distributed operations into one place, having larger and better-equipped premises, and being able to store materials according to each project — all of these factors will increase our day-to-day efficiency.

How will this upgrade address the needs and concerns of partners and clients?

The short answer is in many different ways.

Until now, warehousing has been something of a grey area as it crosses over into multiple departments like design and manufacturing. Having it centralised will have a direct impact on our logistics processes. This is an area you have to invest in, and that is what we are doing.

For our clients, this facility will give us the ability to store production more effectively and mitigate deviations from original schedules. Essentially, we will have a better cushion, which will make our logistics operations smoother. We will also be able to accept invoices for materials and tools faster, and we will be quicker at detecting any quality issues with everything centralised.

Partners will also benefit from smoother production vesting. There will now be one area where all the production for a specific project is stored. In time, we plan to incorporate cameras into our facility so that pictures and videos of the logistics operations for a project can be shared via our XD reporting tool — that’s the vision. Additionally, because we will have much more indoor warehousing space than we have at the moment, we will expose fewer materials to outside environmental impact.

And finally, I would also mention sustainability overall. Our sustainability strategy includes a specific focus on business resilience, and this move will certainly help us in this respect. We will be able to optimise our use of machinery like loaders, and we will cut out trips between different facilities. Naturally, this will help us to be more efficient and profitable, supporting the resilience of our operations.

How do you expect this upgrade to contribute to the company’s overall financial and technical performance?

In the short-term, this is an investment. We are renting these facilities, and there will be expenses in terms of reorganising everything in our new location.

We have signed a contract for 5 years (an initial 3 years, plus an additional 2). And we have calculated that over this period we will make an operational return through higher efficiency and better utilisation of loading machinery. We can also expect better accuracy in inventory accounting through an inventory management system. Here, all of the tagging, scanning, and task management is integrated with our ERP system.

And in the long term, having all of our logistics operations in one place opens up new opportunities for optimisation in terms of routing and the positioning of goods. For this, we will be looking into AI systems.

Are there any specific measures being implemented to ensure the well-being of warehouse staff during and after the upgrade process?

We understand that our resilience and success come from our people, and this move will improve conditions for our team.

They will be working in a modern environment, equipped with smart technology. And they will no longer need to move around 3 different premises in their everyday work. Overall, this change will be a big improvement for our team, that is one of the main reasons we are investing in it. Our new facility will offer better conditions and will feature conference rooms with video conferencing, showers, and kitchens.

One potential inconvenience for our team is the new location, which is 21km from our HQ. We are providing options for our team so that they can choose a setup that works best for them. If a team member wishes to stay at our current location, we will try to find positions for them within our production team. For those who are happy to move to our new facility, we will provide free daily bus transport from our HQ to the new facility.

After the upgrade is completed, how will you measure the success of the project in terms of business growth, resilience, and excellence?

We have a well-defined business case for this change, and that includes specific efficiencies in our warehousing and logistics operations.

We expect a 7% increase in labour efficiency as a result of this move. Furthermore, we anticipate that our logistics efficiency will increase by 35%.

We believe that achieving these will be straightforward. More generally, we want our new centre to contribute to better and more accurate inventory, creating more transparency both internally and externally.

Overall, along with the specific goals we have for this centre, it will play a crucial role in our ongoing growth and development over the coming 4 years.

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