Thursday 27th Oct 2016 - Logistics Manager

Innovation on the rack

Racking out a warehouse can appear deceptively simple, but getting it wrong might prove costly.  Malory Davies reports on how companies are making creative use of racking.

It’s not too many months ago that racking was seen as a cash purchase – very few would have considered any other method of acquisition. But as times have got tougher the need to maintain cash within the business has increased and it is no surprise that more and more companies are now looking for finance packages.

Steve Richmond, general manager of Jungheinrich’s Systems and Projects Division, says: “There are still companies that are happy to write a cheque for new racking systems, but we have noticed an increasing trend among customers to look for some form of finance agreement.”

Link 51, for example, has its RackLease product which allows users to choose either a finance or operating lease. Under the finance lease scheme assets can be shown on the balance sheet in a similar way to hire-purchase and at the end of the agreed payment term the racking becomes fully owned.

The operating lease is available for certain racking types and applications. Payments are kept low because of the built- in residual value and assets managed under an operating lease may not have to be recorded on the balance sheet.

Richmond argues that consideration must be given to the whole life costs. Systems that are robustly designed, built and installed will be resilient to damage and offer the best return on investment and the lowest costs over their lifetime. The method of financing the investment in the racking system will also have a considerable impact on its cost efficiency.

“The acquisition of all capital equipment is a major commitment and how that acquisition is funded requires careful planning. Buyers should ensure that their supplier has access to the widest range of financial options if they are to get the best value for money for their business.”

Elsewhere, Dexion-PSS has launched a new satellite storage and retrieval system which is operated remotely via an RF battery-operated control system and special channel rails. When positioned in the selected aisle and started by the operator using the RF control, the system stores or retrieves loads in handling sequences as either first-in-first-out or first-in-last-out thereby providing automatic stock rotation.

It can work up to 20 hours before it needs recharging. In auto-mode, the system can be left to stack while the forklift truck driver continues other operations with other satellites. The satellite has an indicator to show when charging is required, which prevents the unit from running out of power while in use.