While it may have taken less than a year to go from ground-breaking ceremony to hitting the ground running, for the full story behind Kuehne + Nagel Canada’s recently opened pharmaceutical/healthcare logistics facility in Mississauga’s Pill Hill, you have to go back a little further.
As one of the world’s leading logistics providers, Kuehne + Nagel focuses on industry specific solutions. “Several years ago, in close cooperation with customers, we developed KN PharmaChain to set new standards in logistics,” says Murray Gascoyne, vice president, contract logistics for Kuehne + Nagel Canada.
“We already had a mature and established pharma/healthcare offering in airfreight in Canada, so it was a matter of expanding our contract logistics network up to meeting our customers’ warehousing and distribution needs,” he told Canadian Shipper, during an exclusive interview and tour of the facility. “In 2012, Kuehne + Nagel Canada undertook its first investment in the vertical and converted 80,000 square feet of an existing site, on what we call the Millcreek Campus, into our first pharmaceutical-grade building,” says Gascoyne.
After promptly outgrowing that facility, “we couldn’t take on more volume from customers,” says Gascoyne, “so we needed to leverage the next phase.” The newly built KN PharmaChain GxP distribution centre is a 208,000 square-foot, multi-client facility equipped with state-of-the-art technology for storing temperature-sensitive healthcare products. “Our investment underlines the importance of our strategy to further grow our healthcare activities in Canada and we are grateful to our loyal customers for their confidence in our services,” says Gascoyne.
It offers advanced warehousing, co-packing services, full end-to-end capabilities from inbound to final mile, and cross-docking for time-critical products. In addition, says Gascoyne, Kuehne + Nagel’s standardized warehouse and transportation management system provides total supply chain inventory visibility.
According to Gary Boettger, Kuehne + Nagel’s manager, national procurement, the warehouse was designed to capture innovations within the industry while keeping an eye on environmental impacts. The facility is temperature and humidity controlled, as well as licensed and qualified to Health Canada standards, including:
Ambient storage – between 15° C to 25° C
Less than 60 per cent relative humidity
10,000 square-foot 2° C to 8° C cooler fully racked with 30-foot clear height
Live temperature and humidity monitoring systems
CCTV and other security features
Motion sensor LED lighting
Digitally controlled HVAC system
Grey-water landscaping irrigation system
“One of our goals with this building is to raise the bar when it comes to GMP-compliant facilities,” says Boettger. “So, that when customers come in and see our facility and compare it to other facilities, it stands out in the market.”
Nothing was too small to escape design scrutiny in setting up the warehouse to store goods securely and in optimum condition. “It’s not your typical warehouse design,” says Boettger. “We worked with the engineers to eliminate as many horizontal and cross beams to avoid places where dust could collect.” The surrounding fields even include bio-swales for water retention, rather than rainwater going directly into the sewer system.
Inside, from an operations point of view, flow was a key consideration, says distribution manager Jason Farrell. “What is good about this facility is you have natural pressure and choke points within an operation that if you haven’t designed enough space flow around it, become an artificial bottleneck.
“When you design you have to look at areas such as packing, shipping, receiving, and picking and identify how goods and people are going to move safely and efficiently in that area.”
“The new facility allows Kuehne + Nagel to meet two important strategic goals—good design to make us more efficient and effective—and set the stage for continued growth,” says Gascoyne. “We’ve been managing the process pretty tightly and have some target customers lined up and we believe that optimistically the opportunities will come towards the back end of next year and at that point that’s when the future expansion will kick in.
“In the 3PL industry, you’re talking about a 12 to 18-month lead time, so the reality is we’re opening up conversations with customers to pre-build the extension.”
Foresight was also taken in regards to being able to add features to the facility as needed. “In the future, we will add a narcotics vault and an Order-to-Cash, system feature for automated sales order creation,” says Gascoyne. Being in the centre of Canada’s second-largest life sciences cluster, with nearly 400 companies employing 25,000 people, is key to ensuring the company’s long term future.
“The area is a logistics hub,” adds Matt Harris, director of operations, contract logistics for Kuehne + Nagel Canada.
“From a logistics standpoint we’re within thirty minutes of two intermodal hubs and within twenty minutes of Pearson airport and most truckyards are within that same radius.”
In a market filled with complexity due to strict regulations and compliances to meet, Kuehne + Nagel’s pharma/healthcare logistics facility puts the company right where it wants to be.
“We like complexity,” says Gascoyne. “With our proven KN PharmaChain solutions and our team of local experts, we manage our customers’ logistics challenges and offer a wealth of value to their businesses.”