Five years ago, Toronto-based Apotex Inc. faced the classic growth challenge, if such a thing can be said to exist. Already one of Canada's largest pharmaceutical manufacturers, the company, which makes generic, prescription and private-label over-the-counter drugs, began to experience an unexpected surge in sales. The cause quickly became apparent. It wasn't an outbreak of some northern strain of bird flu or an escalation in hypothermia cases; rather it was skyrocketing demand from consumers across the border in the United States. Fed up with the high cost of home-grown drugs, increasing numbers of U.S. consumers had begun importing lower-priced medications from Canada.

Since that time, there's been no letup in demand. Output at the company's Etobicoke, Ontario, manufacturing facility has increased fivefold during the past five years, with 70 percent of the dosages manufactured at the site bound for the United States. And although the financial people probably aren't complaining, the boom has had some side-effects. The growth has created a space crunch in the manufacturing plant as well as the R&D lab located on site. It has also put a severe strain on the warehouse, which stores raw materials and work in process for the adjacent manufacturing plant.

Though Apotex was in desperate need of space, building an addition at the site wasn't an option. The Etobicoke facility is surrounded by major roads on all four sides. And in any event, any extra space that could be found would be immediately commandeered by the manufacturing plant, which itself was feeling the squeeze.

Clearly, the only place the warehouse could grow was up. In the end, Apotex altered its sights from the horizontal to the vertical. To free up floor space for production and research, the company came up with a high bay, very-narrow-aisle design for the storage area, a design that called for 65-foot ceilings in one section and 80-foot ceilings in another as opposed to the traditional 30-foot ceilings. And to make it all work, the storage area would be equipped with automated storage and retrieval systems.

Retrieval made easy
Today, Apotex operates two separate storage and retrieval systems in the Etobicoke facility. A semi-automated system handles the storage of raw materials and a small volume of finished goods, while a fully automated system supports work in process. Together, the two systems, which both use equipment supplied by FKI Logistex, provide Apotex with the warehouse space it needs to meet its expanding output.

Not only have the high-rise systems eased the storage space crunch; they've also improved inventory control at the site. Because the systems keep close tabs on inventory, the company can respond immediately to demand for a specific ingredient or medication. Once the item is located, a crane can be easily dispatched to retrieve it from its storage location within the system. Products can also be removed from storage in a specific sequence to accommodate just-in-time manufacturing.

The semi-automated system that houses the facility's raw materials consists of seven aisles with a footprint of some 50,000 square feet. The aisles are 300 feet long and 65 feet high. Aisles 1 through 6 are used for materials, while Aisle 7 holds some finished goods until they are ready to ship to a distribution center in Indianapolis.

Two man-operated cranes patrol the 10,500 pallet locations within the storage area. The cranes are designed to change aisles easily, guided by rails at the floor and ceiling. Using only two units to cover seven aisles reduced overall system costs while also providing flexibility. If repairs are needed on one unit, the other unit can quickly retrieve needed items from any aisle. As volumes increase, the company has the option of adding cranes and/or aisles.

The raw materials, contained in drums, cartons and bags, are held in the storage locations on plastic pallets. Plastic was chosen over wood for a variety of reasons, such as the reduced risk of contamination from split wood, wood dust and debris; long-term cost-effectiveness; and longer life expectancy. The plastic pallets are used only within the closed loop of the facility, however, not for outbound shipments.

To retrieve items from storage, operators manning the cranes can either drive the cranes to the assigned locations or program the units for semi-automatic mode, which at the push of a button, whisks them to rack slots where the ingredients needed next for production are stored. Each of the cranes features twin loaders to hold two pallets at a time.

After the pallets have been gathered, they're driven to drop-off stations. There, a combination of conveyors, vertical lifts and automated guided vehicles transport the materials through the various processes of the adjacent manufacturing plant.

Just what the doctor ordered
The second storage and retrieval system, installed just last year, houses work in process: big gray totes containing medications in tablet or capsule form that are awaiting further processing, such as tablet coating or special packaging. This AS/RS consists of one 80-foot-tall aisle manned by a fully automated crane. The crane is designed to make about 20 to 25 moves an hour, sliding the totes in and out of 1,800 double-deep locations.

While the system is predominately used for holding the work in process, a number of the storage locations are devoted to empty totes. Some of these empties are waiting to go to washer units for cleaning, while others have already been washed and are being held there temporarily until needed. All totes are moved to and from the automated system using automatic guided vehicles.

To track the medications as they move through the facility, Apotex is using radio-frequency identification (RFID). "All work in process has RFID tags, which [allows us to] track the weight of the tote and then write that to the tag," explains Fred Grafe, the company's director of global logistics. He adds that the information on the tags is automatically read and updated each time the materials enter and exit the automated storage systems, resulting in very little manual intervention with the totes.

The lack of human intervention both minimizes the risk of contamination and provides greater security for the medications, which is important in assuring the safety of the consumer drug supply. The reduction in handling also has reduced product damage and picking errors. Warehouse accuracy at the facility has now improved to well over 99 percent. For Apotex, at least, it appears that the AS/RS storage units have proved to be a miracle cure.