There was reason to celebrate when Unique Party Favors, the Mississauga, Ontario-based subsidiary of Unique Industries, finished moving its entire warehouse with just hours remaining on its 10-year lease.

"It was close," says Harry Chadjiantoniou, vice president of the party-supply company. "I actually handed the keys off while the last skid was moving out."

If Unique Party Favors hadn't left before the Feb. 28, 2003, deadline, it would have been forced to pay a hefty penalty: an additional 50 percent on its monthly rent. The threat of that extra charge, coupled with pressure from a new tenant that was slated to move in, made time a valuable commodity.

Although the move itself came down to the wire, Unique Party Favors had actually been shopping for a new facility for about a year beforehand. By that time, the company was handling about 5,000 SKUs (stock-keeping units) and shipping about three tractor-trailer loads a day to 2,500 customers located from Newfoundland to British Columbia. In recent years, it had been experiencing annual sales growth averaging 10 to 15 percent.

The company had been in its old warehouse since 1991, when the original building measured a modest 3,000 square feet. Numerous expansions had increased the square footage to 100,000, but the warehouse was still congested. With eight of the 18 shipping doors non-functional, moreover, the facility was showing its age. "There was no way that facility was going to last," Chadjiantoniou says.

Although Unique Party Favors was under pressure to leave the old facility, company managers wanted to take the time to find the right location for both its business and for its employees. Two months before its lease expired, the company secured a 10-year lease for a new warehouse about 15 miles away from its original location.

Once the lease was firmed up, Unique Party Favors had a new obstacle to overcome: How do you move out of one warehouse and into another without shutting down operations or inconveniencing the customer? "That was pretty tricky," Chadjiantoniou says. "Everything had to be seamless to the customer."

The company responded by creating a dual inventory system, where the old and new facilities mirrored each other. Over eight weeks, inventory was shuttled to the new facility together with the existing racking. It took more than 250 tractor-trailer loads and about 150 trips with a five-ton truck, all while maintaining a delicate balance between sending ample inventory to the new facility and keeping sufficient inventory at the old warehouse.

By the fifth week, this "mirror image" had been attained, and the company began shipping out of both locations. Once 80 percent of the inventory was in place in the new warehouse, the staff began shifting more fulfillment activity to that facility. By March 1, 2003—the day after the lease ended—all operations were up and running in the new warehouse.

No move is without its growing pains, of course. Some employees chose to leave the company due to new policies and procedures, such as stricter security and performance requirements, that were instituted at the time of the move. But the new, 163,000 square-foot facility, with an interior height of 30 feet and 27 shipping doors, is a better fit for the company, its customers, and its employees. The new warehouse also has enough capacity to handle up to 20,000 SKUs and provides employees with a better overall working environment, with improved lighting and a cleaner facility.

The lack of congestion allows Unique Party Favors to have a better idea of what is going on in its warehouse, says Chadjiantoniou. "In the new facility there are no excuses," he observes. "Productivity can be measured, and if there are any problems, they can be addressed."