When TorPham was planning to build a new warehouse, the Toronto, Ontario-based pharmaceutical manufacturer set its sights high—on a high-bay facility, that is.

An FDA-approved manufacturer of generic drugs, TorPharm wanted to make stronger inroads into the U.S. market. To expand its presence, it needed more manufacturing and storage space, but its existing facility simply wasn't what the doctor ordered. "That facility wasn't able to provide the capacity we were looking for," says Fred Grafe, director of logistics at Apotex, TorPharm's parent company. "In order to meet [the demands of] the U.S. market, we knew we had to increase our manufacturing space, so one of our first projects was to increase our warehouse space for raw material."

TorPharm decided to build a new warehouse. Because real estate values per square foot were very expensive in the Toronto area, it made sense to minimize the facility's "footprint" and build up rather than out, Grafe says.

The 67-foot-high warehouse the company designed required special equipment to handle storage in such a tall and narrow space. By choosing its equipment wisely, TorPharm not only saved big on real estate costs, it also managed to triple its warehouse throughput.

While the high-bay facility was in the works, Grafe and his colleagues shopped for vertical storage solutions. After looking at products from several manufacturers, they settled on semi-automatic aisle-changing cranes from FKI Logistex Cleco Systems. (See photo at left.) "These cranes are locked at the top and bottom of the aisle," Grafe says. "They can travel at high speed and they can also lift and lower within the 67 feet [height of the warehouse]. With a conventional truck you couldn't go that high."

The high-rise trucks can run either automatically or with an operator on board. The machines handle palletized products that have been presorted by putaway location. "When we're putting product away, we generate a bar code from the dock that says where it needs to go," Grafe explains. "Through our conveyor control system, we direct the pallet to one of seven aisles. When the pallet gets to a pickup and drop-off location, we bring the pallet onto the truck." The operator then scans the bar code and transmits information about the putaway location to the truck. On the outbound side, the equipment can receive an order, pick it, and deliver it to the staging location in less than 15 minutes.

Since the facility opened in November 2002, Grafe estimates, his company has tripled its throughput. "Because the trucks are semi-automatic and we're storing more product per square foot, we cover more real estate in a shorter travel distance," he says. "Because of the speed of the trucks and the overall efficiency of the system, our capabilities have tripled." He notes that the old warehouse could handle fewer than 2,200 pallets; the new one stores close to 10,000.

The new facility figures into TorPham's plans for 500-percent growth. Grafe says the company is looking to ramp up its manufacturing from 1 billion to 5 billion tablets per year, and a faster storage-and-retrieval system will help make that possible. "Part of the process is being able to support manufacturing in order to make the tablets that we need," he says. "If I can't get the raw materials to manufacturing, it's a moot point. In the new facility, we can run a 24/7, three-shift operation with staff to support the inbound and outbound processes of receiving materials, sampling, and issuing to production."

With its new warehouse up and running, TorPharm has begun to move into the second phase of its growth plan, which involves increasing its manufacturing capabilities. Once that phase has been completed, Grafe says, he'll go back and look at how to better match warehouse operations to manufacturing's needs. "We probably need to look at our warehouse control software and how we manage the storage of our products," he admits. "I think the conveyor systems and the trucks are doing what they need to do, but we probably need to revisit our process based on velocity and where we store our products."