Axiz has expanded its warehousing facilities at its offices in Midrand, five years prior to the company`s original plan to do so, in order to accommodate the increased volumes of stock it is distributing.
Anthony Fitzhenry, CEO of Axiz, says the company selected its current site with the company`s long-term growth in mind. "We originally designed our new premises with the intention of doubling our warehousing facilities, to accommodate our volumetric growth patterns, in our sixth year in the building. We`ve grown to such an extent that we`ve had to double our warehousing three years early."
He says the company`s growth can largely be attributed to two key events in the IT industry: the demise of SDD which saw Axiz adding HP desktops, notebooks and storage products to its range far earlier than the company had originally foreseen; and the merger between Compaq and HP, which further significantly expanded the number of product lines the distributor was carrying.
"It was at that stage that our COO, Keith Anderson, and his logistics and supply-line staff reviewed our existing warehousing facilities and we decided to roll-out the second phase of our initial plan early to accommodate the greatly increased volumes of stock we were handling," Fitzhenry explains. "We believe that our facilities now should be adequate until the end of 2004, at which stage we plan to review it again in terms of our requirements then, with a view to possibly implementing the third phase of our warehousing plans, originally scheduled for 2011."
Anderson adds: "The main reasons for accelerating the warehousing expansion was to contain the increased stock volumes, as well as to accommodate the larger volumetric sizes of products such as the Compaq servers and monitors. Monitors make up the single largest component in terms of warehouse space.
"With technology moving to flat screens, which have a considerably smaller footprint, we could find by the end of 2004, depending on the rate that the market adopts the flat-screen technology, that we may regain between one-fifth to one-third of our warehousing space, simply by stocking less of the current monitors and stocking greater quantities of flat-screen monitors."
To better illustrate the volumetric increase the distributor has experienced, Anderson offers some statistics: "We experienced a 90% increase in revenue in January 2003 versus January 2002. Overall, across the entire product range we stock, there has been a 500% increase in the number of shipments moved through our warehouse," he states.
Axiz handles logistics in-house, as opposed to outsourcing it, maintaining that it is a core competency within distribution. "If you view the entire channel as an ecosystem, each element within that ecosystem has its own unique function, which is the value that it brings to the equation. For our resellers, it is important for us to deliver the logistics, finance and management. If we outsourced our logistics, I don`t know what our value would be," states Fitzhenry.
"A warehouse, and the staff that operate it - all the logistical operations - must be scalable in order to cope with changes in the market," states Fitzhenry. The company`s warehouse operates on the traditional one-tier manner and is currently 90% manual and 10% mechanised. Anderson says they are moving towards 25% mechanisation, using gravity feeds and wireless barcode scanning of stock picking directly into the company`s invoicing system.
The company believes its volumes will continue to increase on the back of the market share gains being made by HP`s various product lines. "We see HP`s networking range making big inroads into the market and we believe HP`s other products will continue to gain market share; they have already gone from being third to being first overall," says Fitzhenry. "We believe we will get greater market share as a result of that and with our new warehousing facilities we will be able to cope with this increased demand," he concludes.
About Axiz: Axiz is a distributor of products from market leaders HP, Microsoft, Intel, Kingston, Kalliba and LG, Lexmark, Symantec and 3Com, and also carries a wide range of leading brand components and solutions. More information is available at www.axiz.com.
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