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A paper Klondike trove for smart logisticians, continued!
Mr. V.A.Elin, PhD in Technical Science, Chairman of the Board of Directors of "SMART LOGISTIC GROUP" CJSC; Mr. E.V.FEDOSEEV, CEO of "SMART LOGISTIC GROUP-OPERATING" CJSC.
Cost saving has always been at the top of the priority list of every business, while at the time of crisis it can easily make a difference between to be or not to be. It is hard to find a company nowadays that doesn't save or goes through some form of restructuring or other, ranging from wage cuts to stricter rules for the corporate phone use or - the most successful by far - a more effective use of the highly valuable and very prestigious square meters of their own office space. The very first thing that comes to mind of those trying make savings on office space is to get rid of all that is not essential. It could be, for instance, the heavy and cumbersome office files and records that may contain just about anything: from private libraries of the business owner, whose country house is under repair, to 10-year-old bank postings relating to the purchase of a dinner-service for the company's top achiever. On a more serious note, those files tend to contain the documents, which, according to the National Law "On Archive Keeping" of 22.10.2004, No. 125-F3, as well as No. 129-FZ, No. 208-FZ, No. 14-FZ, must be kept by every business or specialized storage companies for 3, 5, 7 or more years, depending on the nature of those documents. In this instance, the freed from the files and records space is subleased at market prices and begins to lay its own "golden eggs" for the company!
So you can, after all, save money on storage, can't you?
It is a commonplace practice for companies, banks, etc. to store their records inside their own offices, making them easy targets for the tax, fire and other authorities. But, will these regulatory agencies really appreciate your promptness? Unlikely, after all they always have at least 3-5 days to deal with a request. And it means only one thing: the rented space of your office becomes a prey to the ever-growing appetite of our files. It's been calculated that the difference between keeping records in an office and with a professional storage company is measured not so much in percentage points as in folds. A rough estimate puts the difference at 15 times! Let's take a close look at the things that make such a stunning economic effect possible.
Of course, this kind of economic effect is not so easy to achieve. It requires special conditions allowing for compact storage along with modern processing and accounting systems. This is how it works.
We use a single "A" category storage unit as the basis for our calculations. The average height of such unit is 12 m and more. This is achieved through the use of a specific structure design consisting of laced and arched ceilings, high-rise concrete towers and a fortified foundation. It is very important in this kind of warehouse to have a big load on the floor structure, no less than 6 tons per square meter, to cope with the weight of the multi-tier racking system containing paper stacks, which, incidentally, are not the lightest of materials for pallet storage on high shelves. A low turnover nature of paper records is best suited for a compact type of storage with narrow aisle racking systems and 2.02 - 2.4 pallets per 1 sq.m of a category "A" warehouse. It is possible, of course, to achieve higher storage efficiency, but this will involve filling the entire warehouse with special mezzanine-rack structures. In this case, the storage efficiency will be equivalent to 4.0 pallets per square meter of a category "A" warehouse.
Such compactness of storage in a specialized warehouse coupled with a lower cost per square meter contributes to a greater economic advantage compared to office storage.
For instance, the cost of renting one square meter of office space with an average height of 3 m is about $700 per year. The average storage potential of such space is 0.5 pallets of records, with allowance for rack aisles, etc. The cost of 1 m of storage space (enough for 2 pallets) in a warehouse with an operating height of up to 12 meters and a multi-tier racking system with narrow 1.9 m wide isles is only $150 per year. When we add up the numbers, we will see that the annual cost of storing one pallet in an office is $1,400, and $75 in a warehouse. The difference of 18.6 times!
However, the difference will be somewhat less, given that the cost of storage includes the expenses related to file processing, which is made up of removal of records, formation of storage and accounting files, placement of records into special boxes, transportation and their placement into storage sells. Electronic recording and identification of each individual file with a barcode is by far the most important part of the entire storage process, allowing for error free retrieval of the required file from a huge volume of materials. The retrieved document can be returned to the storage at any time by contacting the storage company and ordering a courier puck-up, or by simply depositing the document in a specialized receptacle installed in companies handling large volumes of documents.
A specialized tracking system is used to follow the movement of every document along the entire length of its journey from a customer's office to the storage facility, with extra emphasis on the handover points. Only vehicles equipped with location tracking sensors are used for transportation of documents.
Keeping the entire system operational round the clock requires the efforts of storage experts, logisticians, transportation and security personnel, along, of course, with experienced managers who operate the entire process.
Nowadays, success of a company making money on storage depends on considerable investment, latest technologies, experience and market reputation. A combination of different factors, including accounting and secure transfer of records, enable documents to be stored at prices 12-15 times lower than in office.
Decide for yourself if you need such savings or not!
If you do, then "SMART LOGISTIC GROUP" CJSC and "IRON MOUNTAIN" are waiting for you on the territory of "Severnoye Domodedovo" ILC, Bld. 14.
A paper Klondike1 trove for smart logisticians.
Mr. V.A.Elin, PhD in Technical Science, Chairman of the Board of Directors of SMART LOGISTIC GROUP CJSC.
When the world's economy was still in the midst of the global financial crisis, we were paid a visit by an employee of EURASIA LOGISTIC, Russia's largest developer and the owner of "Severnoe Domodedovo" ILC, who came with an offer to work with not a very agile but still a highly respected storage customer. Having only half of our "A" category warehouse occupied at the time, we decided to give it a go. It was only when the negotiations started that we found out that storage customer was - IRON MOUNTAIN, the world leader in providing storage solutions. This company's countless warehouses are the home to 7.5 million cubic meters of precious documents and data from around the world. Its operating system handles 72 million storage transactions from more than 100,000 of the company's client businesses annually. However, we are no dummies here either and decided to seize the bull by its horns and have a go at this novel to us business of information storage.
Obviously, there is a huge difference between viewing a business from the sidelines and being involved in it up to one's gills. It took us one and a half years of complete dedication to explore every nook and cranny of its structure. At first, it struck us as being very straightforward. After all, what is so sophisticated about storing things? Nothing can be easier: you take a standard size box, preferably with a logo on it, identify it with a barcode sticker and fill it up with a dozen of "CRONA"-type folders containing all kinds of documents. That's it, you almost have a complete single unit of storage ready. Next, you stack a few dozens of such boxes on a pallet, secure the stack with a stretch film and - you are a pro. Hey, not so fast, never believe in first impressions. The storage business, as it turned out, is full of nuances: the storage structure with its own accounting system, data base formation approaches, to name but a few. Safety of the stored information and its transfer from a customer to the keeper and back is one of the business's top priorities. So is the access hierarchy. The total and absolute control over the information at all stages of the transfer chain that begins with a customer and goes all the way trough a forwarder, recorder, and storekeeper to a cell at a computerized warehouse with its own video monitoring and access systems. And all of that is just the tip of the highly intelligent and highly sophisticated iceberg of data storage and management that can be seen with a naked eye. In modern Russia, potential customers store data in their work offices, banks, government organizations and business parks. Even at the time of crisis, the rent prices for these facilities were anything but low: from $500 to $1000 per 1 sq. meter a year, plus operational and maintenance costs, expensive security and qualified storage personnel. Incidentally, the room height of most of the facilities used for storage is 3-3.2 m at the very best, meaning that storage efficiency of an "A" category warehouse with a room height of 12 m is many times higher than that of office storage. Now, if we translate all these ideas into easily understandable mathematical equations, it will become clear that the cost of storing one pallet of paper records is 15 times lower in an "A" category warehouse than the cost of storing the same pallet in an office located within Moscow's third transport ring or in any Russian city with a population over one million.
Some may question the ability of a logistics operator to derive any benefit from such immovable and low-turnover items. Well, see for yourself. Firstly, the owners of the biggest data volumes in the country are also the top players in the Russian business league. Kind of "blue chips" in the portfolio of a logistics operator. Wealthy and reliable payers of his company bills. Secondly, stored data is not a perishable type of commodity and not the one vulnerable to financial or political upheaval. Once you get yourself involved in the storage business, you are guaranteed to always have cash in your pockets as long as you have a sound logistics structure. Thirdly, contrary to Bill Gates's assertion that the 21st century will be the century free of paper, the regulatory authorities of every country, i.e. tax and customs authorities along with the judiciary and prosecution, still desire to see a physical evidence of our business activities rather than virtual one; that is the good old-fashioned paper records.
So, can anyone who has read the above honestly say that this is not a paper Klondike1 trove?
April 16, 2010
SLG Press service
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