EXCLUSIVE: Inside Ingram Micro's new $35m warehouse (+ slideshow)

EXCLUSIVE: Inside Ingram Micro's new $35m warehouse (+ slideshow)

It's twice as big as the MCG and state of the art

Ingram Micro's Michael Colagiuri and Jay Miley

Ingram Micro's Michael Colagiuri and Jay Miley

Ingram Micro has revealed its new $35 million warehouse in the Sydney suburb of Eastern Creek.

The state-of-the-art warehouse is Australia’s largest distribution centre, and sprawls over 40,000sqm. That’s twice as big as the Melbourne Cricket Ground. It has 34 docks, can hold more than 30,000 pallets, has three storeys of storage with two three-storey picking models in operation.

Ingram Micro managing director, Jay Miley, said, “We looked at what we believed our requirements would be for a 10-year horizon and essentially built and engineered the processes in the facility to support that.

“We built it so we can have some stability in the system for the next 10 years. We built it with the stated goal to essentially make us a lot more productive. And, ultimately, that productivity gets passed onto our customers in terms of better quality and better costs."

Ingram Micro director, operations and logistics, Michael Colagiuri, said in layman’s terms “we look at where we are today and where we think we’ll be in 10 years and we design and build a facility that will meet the criteria for the 10 years.”

Importantly, the warehouse can also can be expanded over the next 10 years as need dictates.

Colagiuri said the company owned the land behind the warehouse and could lift up the back wall and extend the facility back, creating a further 20,000 sqm.

He is immensely proud of it and it’s easy to see why.

Ingram expects to ship an average of 60,000 individual units a day, Colagiuri said. But the warehouse, which runs 24x7, has the capacity to shift a much larger number of units daily if required.

“What used to take 12 hours to ship at the old Matraville warehouse now takes six hours,” he said, adding the Matraville address is now closed.

What is also evident is how carefully Ingram has taken the start-up of the new warehouse. Planned with efficiency, flexibility and productivity in mind from day one, Colagiuri hasn’t had to rush into a high pressure situation and has been able to bring the facility on at a steady rate.

Development history

That mirrors its development history. Miley said IM first began thinking about, researching and investigating the possibilities for a new warehouse five years ago, and began the development process in earnest in late 2009.

“It was full steam ahead from January 2010,” Colagiuri said. “March 2011 we broke ground. As far as the build is concerned we went from nothing to finished in nine months. The first shipment was processed in the first week of February. On day one we did 9000 cartons with no worries. To be honest most of our partners didn’t know.”

In fact, some of them may still be unaware the shift has be made. The only give away is the boxes in which the goods are shipped by the distie.

Anybody familiar with distribution will know the majority of product is moved in a box – sometimes too large – sealed with tape across the top. As Colagiuri demonstrated to ARN it is a relatively insecure means of shipment as boxes can be easily accessed by anybody. It is also frustrating for clients who have to dig around in a large box for a small product.

To overcome this, IM focused a large part of the design around packaging. “It’s what people touch,” Colagiuri said. “We found the perception in the industry around the old packaging systems was terrible: ‘Big box with a little thing in it’.”

Packaging system

Miley underscored just how important the new packaging system is. Ingram’s research led to it a company called B+ Equipment in the south of France which produces an automated packaging solution, I-pack, that adjusts the box height to the content height.

“Nobody else has these boxes,” Miley said. “They are tamper proof and really rigid. You can stand on a box, jump on it; you can’t squash it.” Miley said.

“Distribution companies incur big losses through damage to products during shipping and other problems associated with the old boxes.

“With this system we know what’s going into every box [thanks to a barcode label system that is the heart of the warehouse system], we know what it should weigh because we weigh every box. As we know what everything weighs we then know whether the right product is in the box. If it doesn’t pass the weight check it is directed to quality assurance.

“So we have a high degree of confidence that what is in the box is what is supposed to be shipping and that it is tamper proof and unlikely to be damaged.”

The labelling system itself is just as stunning. All the information needed to get a bare empty box from the beginning of the process to a packed and sealed container in the back of a van is contained in the barcode. The majority of the packing process is automated and the product tracked from the moment it enters the box to the moment it is delivered.

The Eastern Creek facility is the most advanced and automated of Ingram Micro’s network of 120-plus warehouses and 11 Advanced Logistics Centres globally. It has:

  • Five kilometres of automated conveyors and high-speed sorters
  • A 650m2 “Inline” Configuration Centre that provides a wide range of Configure To Order (CTO) services. This allows customers to configure products with specific custom hardware or software configurations, have products pre-tested asset tagged before being shipped to customers
  • Automated carton assembly and sealing for efficient and damage-free shipping

The warehouse uses IM First – the warehouse software used by IM around the world.

The Advanced Materials Handling System controls all the automation and conveyors. It is used by IM in its Advanced Logistics Centres overseas but is the first deployment of its kind anywhere in Australia.

The facility is designed to meet Technology Asset Protection Association (TAPA) TAPA A security rating – the highest industry security rating globally. Certification is expected later in the year.

It's all very impressive.

"Ingram is committed to the market," Miley said. "If it wasn't we wouldn't have spent $35 million on this development. We have made a major investment in system and processes to help our partners grow their businesses in the future. Our company is all about helping our vendors, resellers and partners succeed."

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