Future Electronics Inc. last week celebrated the fifth anniversary of its ultra-modern distribution center in Germany serving Europe, the Middle East and Africa (EMEA). The 40 million euro facility in Leipzig, opposite a vast BMW industrial park in the German state of Saxony, is one of Future’s three global distribution centers from which it supports suppliers and customers with a range of services, including export and quality controls in addition to traditional components distribution.
Montreal-based Future Electronics has been investing heavily in its distribution facilities and other services. In the last ten years the company has reorganized and consolidated distribution facilities in its key market regions. The strategy it unveiled at the beginning of the last decade was to build new distribution warehouses in key hubs close to logistics partners and where it could take advantage of government incentives and favorable labor.
In addition to the facilities already built in Memphis, USA, and the one in Leipzig, Germany, Future Electronics is also reviewing plans to build a modern one in Singapore to replace the one it currently has. The company hasn’t taken a final decision on this, however, according to Lindsley Ruth, executive vice president in an interview.
“We see a greater proliferation of electronics in all industries and we want to be prepared for the continued expansion of the market,” Ruth said.
The first facility Future built from scratch is the Greater Memphis Distribution Center based just outside Memphis, Tenn., though located in Mississippi. The Memphis plant was completed in 2004 and the Leipzig facility five years later. (See: Future Plans $10M Expansion of Memphis Distribution Center.)
Though both facilities are fairly similar Future’s Leipzig plant benefitted during the planning and construction phases from lessons learned while the company was working on the Memphis warehouse, according to company executives. Both facilities are equipped with extensive automation lines and large “dark warehouses” where robotic cranes operate in total darkness picking and storing components received from suppliers or headed to OEM and EMS customers. The Leipzig “dark warehouse” is about 18 meters high and approximately 100 meters long.
The automation of the two facilities dramatically increased the accuracy of the activities conducted at the locations. The robots in the dark warehouses operate with perfect accuracy and further help to reduce operating costs through the reduction of lighting requirements. The higher accuracy of operation means Future can fulfill its goals of ensuring components are delivered on schedule but also to the right locations and customers, according to company executives.
“Our goal is security of supply and the new distribution centers allow us to assure the customer they’ll get the components on time,” said Bernard Betts, vice president of worldwide distribution operations at Future Electronics during an interview in Leipzig. “Each of the distribution facilities has extensive redundancies built in to ensure there’s a backup for everything we need, further reducing the likelihood of delays.”
One of the key services provided by Future at all the distribution centers is compliance with export and other regulatory requirements, said Sean Duncan, director, distribution operations, EMEA, at Future. The company has at each facility resources to ensure each shipment complies fully with regulatory requirements, an important service for a center like Leipzig that services numerous countries with varying rules and regulations.
“We are in the reliability business and compliance is a big part of this,” Duncan said. “Compliance is where something can go wrong if the customer doesn’t have the required documentation. We provide this service to the customer as an integral part of what we offer. There are no extra costs to the customer. It’s just another service we provide because customers require it.”
A tour of the Leipzig distribution center recently indicated the company wants to ensure it has room for expansion whenever necessary. The facility occupies a space of approximately 15,000 square meters and has capacity for additional expansion. Betts said the company decided to establish its newest distribution center in Leipzig because the city also hosts the European hub of DHL, one of Future’s key logistics partners and also because of the extensive network of roads and other infrastructural facilities in the area.
As part of the celebrations marking the fifth anniversary of the Leipzig facility, Future gave awards to some employees, including those who had worked at the plant since it became operational. One of those employees was Lothar Hüther, manager of maintenance and IT, who shepherded the construction of the facility and was the first employee to be hired at the branch.
In an interview Hüther emphasized the Leipzig facility was built to assure uninterrupted service at every phase of component delivery. Every critical equipment and even the automated systems have redundancies built in to ensure the company can quickly recover if any of them were to go down due to any problems. “We have replacements for everything, including for me,” he joked.
With more than 45 years of experience in the construction and project management business, Hüther, who is preparing for retirement in 2015, said the excess capacity added to the Leipzig facility would ensure continuous service at the location for a long time. “I am convinced we have what we need for the foreseeable future,” Hüther said. “One-third of our space is spare capacity and we are not even fully manned for what we have even though we now employ more people here than we initially promised the government of Saxony.”