[00:00:00.000] Hello, everyone. I’m Jeremy Shiff. I’m a project manager out of LIDD Consulting’s Toronto office. Specialty is warehouse design, process optimization, and network studies. I’m joined here today by Waleed Usman and Ryan Barrett from North American Steel. And the topic we’re going to be discussing is successful project setups. So when you’re building a new facility or designing a new facility, how do you set up the project so that it goes smoothly and that you don’t have any unnecessary hiccups? Waleed, if you want to introduce yourself.

[00:00:39.030] Thank you so much, Jeremiah. I am Waleed Usman. I’ve been with the company North American Steel for about seven years right now, and I have been working as a director of projects at my position in Woodby, which is the head office for North American Steel. We have three in Eastern Canada and three plants in Western Canada, and we do tend to travel frequently. So in my part, the portfolio is I have to manage a large, medium, and even small-scale project at most of the times for the and help of customers Coast to Coast in Canada as well as in the United States as well.

[00:01:23.010] Great. Eugen, Ryan.

[00:01:25.000] Good afternoon, gentlemen. Ryan Barrett. I’ve been with North American Storage, and that’s what we call our partnership out West here with North American Steel, where Waleed is. And I’ve been with the company for 15 years. I’ve been in the racking industry for 20 plus years, so a lot of experience going around there. I’ve done in sales, currently the branch manager here in Calgary, where we carry the finished goods and products that we like to ship out. Whereas we have our plant in Niscu, and where Waleed is out in Wipee, and also in Coldwell, and where more of the raw material is done. But where I am in Calgary, we deal with The finished product where we try to quick-ship material out the door as quick as we can. We’ve been here for a very long time and enjoyed it.

[00:02:10.280] Glad to hear that. So let’s dive into the project topic. So Setting up a project successfully. For our purposes, we’re focusing on making sure the racking portion is successful, making sure that there’s no hiccups there. So I guess the first topic to discuss is, who are the different parties that we think are involved or that would be impacted by racking? Who needs to be brought in? Who are all the different stakeholders that should be involved in the discussion?

[00:02:38.370] Basically, when we are starting the project, most of the cases we are working with either consultants or the customers directly. As the more add-ons comes in the project or the customers are requesting us to collaborate, a partner up with such a different company, lab engineers, some of the times sprinkler or electrical teams as well, which This is very rare, but there can be an opportunity where they can request us to get some information or collaborate with them as well. Only that time, but most of about 95% of the time we are working exclusively with the customers, clients, or the consultants. As much as we want to be involved at the very early stages so we can guide the customer on what type of product and just the consultants do and what particular solution that we present them can useful in different ways in a one common warehouse building, it becomes very challenging for them to do it because at the beginning, they’re mostly thinking about the budget pricing, they’re mostly thinking about the budgetary designs, high-level estimates. They’re not so much concerned too deeply on how the building might actually look like after two years when they might be doing the handover, commissioning, and all that.

[00:03:52.410] The additional parties, such as the installation people, the general contractor, the logistics teams, from us internally, from the manufacturing and all that, we normally are keeping them aside. However, when we are beginning the project with the customers and consultants, what we like to do is advise them of different things, even risks that can approach. Let’s say, for instance, for us, a steel manufacturer as well, if the steel pricing or market escalation goes up or down, how will that get affected to the type of the designers that they are planning? If, for instance, the freight pricing, which we saw during the COVID as well, went up, nobody really thought about that while we will be proposing some of these solutions, how can that aid or how can that make modification as well? So such instance, I feel like will be super helpful for the customer and how we might be able to help them out with that as well.

[00:04:47.050] Just touch on where we get through to into the municipalities and how they somewhat force our hand to reach out to different groups, whether it’s through the architect or through the groups directly in regards to getting a drawing or a layout that is acceptable by the local municipality for the building permits that are necessary nowadays. So incorporating the sprinkler engineer, the slab on grade engineer, the electrical engineer in regards to emergency lighting, fire alarms, those type of precursor, early work can really get your head on the design, making sure that you have full understanding of your limitations within a building or what you can actually expand and do more within a building based on maybe a slab load, or maybe the sprinkler system might need an upgrade, and you’re able to do more with that building. So when we try to incorporate all those parties, if we can get through those challenges early, we’re able to give a lot more concise quote or layout or opportunity for the customer to see the potential for a building they might be looking at.

[00:05:49.870] Okay. Yeah, in my experience, so when we’ve dealt with either greenfield designs or when we are putting racking into an existing space, typically who we deal with at Lid is we deal with the customer, and then we deal with the architect. Those are the first people brought in. They do a big box design. They don’t know details, just like this is the overall footprint, this is the different rooms that are going to be in the space, and then we go from there. I would say at that point is typically when we first start thinking about, well, what’s the racking going to look like in the space? And to my mind, that’s when it would make sense. Once you selected the architect, then you might bring in at the same time the racking vendor, such as North American Steel, and the general contractor, if it’s not a design build, because the racking design is going to heavily impact different parts of the architectural design and going to heavily impact cost elements. So it’s important for the general contractor when they’re providing the budget, it’s important for them to know what the racking is going to look like.

[00:06:52.270] And it’s important for the racking vendor to know, well, how tall is the building going to be? Where roughly is the column placement going to be? Where’s the Which rooms are refrigerated? Which rooms are not refrigerated? Which rooms are going to have condensation in them so they require galvanized steel, for instance? So I think it’s, in my experience, once you have set the high level design with the architect, once we set the high level design with the architect and with the customer, that is when we would bring in both the general contractor to start working on more details, start working on their production budget, on their construction budget. And then we would bring in North American Steel to say, This is the space. This is the racking that we’re thinking of. What do you think? What are your recommendations? And then we’d go from there.

[00:07:39.850] I would like to actually add on to one of the things that I love the way you approached based on the architect’s mind and also the customer’s buying because customer, even though he might have a high-level idea of how the business transit free looks like, they might not really know if they really need a million-square-feet building, versus they might actually be okay with going with 120,000 feet, depending on the type of inventory that they want to manage in the whole supply chain network. And when you guys are working as well, along with later on bringing us, it actually takes way half of the information missing in the very beginning of the process. The customers normally will reach out to us later on. So for instance, you mentioned very directly, such as even post-loads. They might actually select a building whose slab is not sufficient enough to hold the capable loads that they’re thinking of placing in, only to finding that when they have finalized everything, the leases are signed, now all of a sudden they realize, Well, we actually have £30,000 coming on one single leg, but the building that we actually sign the lease for, can only take 20 to 25,000 pounds.

[00:08:46.950] Well, now we’re going to miss out on all that inventory that we could have taken the maximum height advantage of, which now is obviously too late. So I love the way you approach that as well.

[00:08:57.290] And I think also, too, when you about the architect, a lot of times our layouts are forced by the hand of egresses. So if we were dealing with a large building or we’re dealing in an area where we’ve got to meet that local or that by law or that code where the egress is to get out of the building for fire code is putting us in a position where tunnels have to be put in certain places or doors going in certain areas. So our column positions in the right place so we are able to keep lines of sight for doors? Are we able to utilize fire-rated corridors or breaks into the office buildings where they’ve got a fire-rated drywall? A lot of times, if we’re able to propose a layout in a lot of those egresses and those issues that are really non-negotiable by the municipalities unless you pass them, if we can get ahead with the design on that and show some of the complications or some of the ease in regards to having the racking in certain locations can be extremely beneficial for an end product as well. Yeah.

[00:10:05.280] I think that’s the most important thing about when we talk about successful project set up, it’s you don’t want to bring the racking. I think we wouldn’t want to bring you in before we even have an idea of what the built space would look like because there’s no real point. At that point, the open space of the open design space is too large. There’s no point in trying to meet it. But once you have an idea of, okay, we’re looking for a building of roughly the size or roughly we can store this much product. At that point, we would bring the racking vendor in. And that would be the successful point because beforehand, it’s too much. It’s too open. You want a more defined problem to solve. If we bring you in afterwards, though. So let’s say we went through the… We hired the architect, we hired the general contractor, they got their budget, and then we bring the racking vendor, and then you say, Oh, wait, you forgot. There’s all these conflicts. You forgot to think about the clear height. You forgot to think about the sprinkler system. You forgot to think about if it’s a refrigerated space, you forgot to think about where the condensers are going to be located.

[00:11:15.600] You forgot to think about egresses and tunnel systems and all sorts of things. So that’s why for a successful project, to make sure that you maximize the design and you don’t have too many trade offs down on the road, it’s important to bring you in fairly early.

[00:11:35.180] Exactly. One key point to add on that as well, that even though we love to come early, at times, as I mentioned, the best part or the most ideal location where we can come early would be when we have tangible information that we can put stuff down to, where we can concretely lay down the type of system that they’re looking for. For the most of the items that we are seeing right now, whenever the building is a rack supported in that instance, or the new ASRS systems, or anything that has to do with the automation sector, and the customers wants us to work with the automation companies or collaborate with them in making sure their system and our system are lining up. They’re bringing us head in the table as well because they want to understand that how can we make this particular system work? Because in that case, there are no building columns. In that case, there are no specific even lighting because in the automated system, you don’t necessarily have people going in and out, no manual operations happening. So the team can tend to away other than just regular Eater slides. You might not necessarily need a lot of those items as opposed to using them for the regular manual static racking.

[00:12:48.210] Those are the opportunities where we are seeing to be called in much ahead of time, even presenting some high-level layout designs, the elevations, and how they’re going to look like, and how we will be able to work with the customer to at least get some sense of where that’s going. So just wanted to add that to you as well on that discussion.

[00:13:07.440] Part of the topic of discussion, one of the topics, but I was thinking it might be interesting if you guys have a minute. If you have any examples of bad project set up, so where you were brought in too late and the trade offs that happened or the problems that happened because of it.

[00:13:24.920] I wish I would say that there were none, but unfortunately, there are a few I’ll just provide one of the most recent one that we did for one of the customer who was building out actually their head office location. What the customer did was, again, we got called in pretty late in the game. And when we started working on their demountable mezzanines and demountable pick tower and storage options and providing for the small parts distribution center, we realized that if the option that they were tend to go in with for the special mezzanine mezzanine, they never really counted for the post-loads that actually will be coming on the floor. So for the mezzanine, we had nearly about 40 different column locations. And to core-drill the existing slab, to add more concrete in the strength, to actually add more footings to support the additional post-load requirement, the cost was going astronomical high, and they hadn’t even considered how much the top structure would have cost realistically at that time. I’m talking a little bit closer towards in the mid of COVID, where things were really skyrocketing up and down, and nobody had any idea where the industry will land into.

[00:14:38.080] So what we ended up going with was providing a rack-supported, a shell-supported system. What that did was it distributed the post load not only in one leg in an overall wider span, but to multiple legs. So with that, they no longer needed a requirement to having puddings in. And that was, again, a lesson learned from the customer’s perspective as well to why was it critical to at least understand the after requirement of putting a storage system on a building.

[00:15:08.550] One issue I’ve seen fairly recently actually, was I talk about refrigeration. The client had not considered, when they were thinking about racking, they hadn’t considered where the condensers were going to be stored or were going to be located. So they were like, oh, there, racking is going to be… It’s going to be a clear height to 40 feet. I’ll be able to put in this many pallet positions. And then we found out that in the freezer space, the location of the condensers was going to make the top level of basically half the racking unusable, just in the places where they were located, because either it was going to be in front of… It either was going to be in front of the rack and blocking access, it was going to be on top of the rack, and so the levels had to be lowered, or where it wasn’t directly where the conditions were not directly blocking the rack, they would still be in danger of… If a reach truck was lifting a pallet to that height, they would bang into it, and we didn’t want to even chance that or the customer didn’t want to chance that because they’ve had bad experiences.

[00:16:18.150] So we ended up having to take out a full level of pallets for basically the entire freezer system.

[00:16:25.730] I mean, a classic example, the same thing. Speaking of the lift rack, some of the we have had, they actually signed a police, came to us. We did the layout design and everything. And we do normally ask them to provide all the specs of the lift trucks and everything that they have, only to end up again… Because COVID really was the worst of the worst time where businesses were trying to flourish and they were trying to sustain as well. I don’t think so they were able to get the lift truck spec that they had provided us at the very beginning of the stages, only to end up getting something else. And For the whole system, the very top level in that 40 feet cleared building that we had placed were rendered useless to them because the lift truck just couldn’t reach to that specific height. And exactly that referrage system, we have seen that with many 3PLs who are going through transformation depending on what type of customer will be coming in and out. We have had them building up a whole wall only to realize, Oh, where now the refrigeration will go? We might actually have to take this whole racking down and maybe put a system over there.

[00:17:31.280] That issue through 3PLs, they’re basically charging per pallet costs over there. So that is a loss revenue, which is very critical. But we have, again, have customers. So the first warehouse is the worst one. I’m going to say the most lessons learned, and the next one, they keep on gradually getting better and better.

[00:17:48.990] We can move on to managing multiple vendors. So I know that the dream is always that you have the space to yourself. You go in, you have an empty, clean building, you build the racking, you have no one in your way. Sometimes that happens. I’ve seen many cases where that doesn’t happen. I’ve seen cases where, yes, the customer is not in the building yet, but the general contractor is still working on pieces, or the automation supplier is going to be building conveyor systems around the space while the racking is being built. So there’s the issues like that. I’ve also seen examples where the customer is already occupying some of the space. So you have to put up the racking while there’s already the customer in another part of the building and the people and product is getting in the way. So what are your views on what’s the best way to manage that? What’s the best way to plan it out and the communication system that should be set up so that you’re able to put the racking in with minimal amount of conflict with the other vendors or with the customer on site?

[00:18:48.270] I think you answered in one word, the very last point, the communication. We have always had issues with either customer stakeholders or the parties who are involved the general contractor or even, unfortunately, one of our team members not being able to clearly communicate. We’ve had the issue with respect to, let’s say, the team member, the shipping team, delaying providing information to the installation team that what truck, let’s say, for instance, might have some specific type of hardware that they’ll be looking at. It hasn’t happened frequently, but let’s say if it happens to be a hypothetical scenario, that could happen. Because of that, the installation team is unaware of how they have to approach. To begin the process with, we, ideally, as Ken just said, we love to come in a greenfield building where the building already has been handed over to the customer and nobody’s there and we love to work. Or we have obviously been working in the buildings where the operations are happening live. In that case, we’re cordoning off the facility, putting safety fencing, working with the health and safety team of the customer on site, pretty much on a daily basis to understand, are there are issues Are there any risks for the next activities that we are planning?

[00:20:04.400] We’re doing each day massive relocations, reconfigurations right now, as we are speaking with many different customers. And one of the main priority for them is the health and safety, which is the actually priority for them. They don’t mind doing the project, but that obviously should never come at the expense of any type of health hazards that it can pose. There was one point in time, I’ll give an example, where we had to do some overhead work, and there were workers picking just about 5 feet away from where we were dismantling the racking, and also we were doing some of the rework in that area. We had to wait for about a two-week time to go back and complete that portion just because the Health and Safety didn’t allow it, and the work that was left out was just about two or three days worth of work. So whenever that comes in, the Health and Safety obviously plays a a main part. The second domain critical item is when we’re going inside the building, let’s say there is a general contractor available, you have to abide by the guidelines and the rules that are set up by the general contractor at that point, even though we have been brought in by the customer.

[00:21:17.270] Or let’s say the customer is the main stakeholder, which we have been working with and we were not being made aware that there will be a general contractor. So that adds up a little bit more extra work for us. We have to do orientations. We again have to do all the additional items that normally we would have to deal with. For instance, in COVID, there was one of the main things that people had to even get vaccinated to work inside different types of buildings. So that was a request and a requirement not from the customer, but that came from a site superintendent who was working with different companies. That did pose a lot of challenge for us because we were never made aware of that. So that ended up delaying the warehouse project for about a good chunk of time, but only at a different part of expense.

[00:22:05.540] One thing I would say, besides communication, I think even though customers often don’t like hearing it, when you have multiple vendors or teams working in the same general space is not requiring a very tight schedule, not creating a very tight schedule. So I’ve had warehouse projects where we created a schedule schedule. So the racking vendor was going to be in the space for two weeks, and that was exactly the time they needed. And then the automation vendor was going to go in right after, and they were going to be two weeks. And then the general contractor was going to go in, and they were going to be exactly two weeks. We made it sure it was very tight. So in and out, because our customer wanted to have that space as soon as possible. And then, of course, it took more than two weeks. The racking vendor took three weeks, and then the automation vendor took four weeks, and it pushed everything out. And if that had been known ahead of time, if we had put in that buffer ahead of time, it would have been a lot better because what happens is the automation vendor, they’re preparing their equipment, they’re preparing their team, they’re preparing their schedule to what you said.

[00:23:10.520] You said they’ll be on site January third. They’re planning to be on site January third. They’re renting their equipment and they’re selling their resources so that they’ll be on site January third. And now you’re telling them a week later, they may charge you for that. And the general contractor, they may charge for that or they may not be available. They may say, well, we have a… We were planning to be on site for three weeks or two weeks, but that was based on starting at a certain time and we have another warehouse project after this. So if we need to extend their time or delay their time, they may say, well, we’re not available for another month because we have another warehouse project. So we’ll be seeing you in the month. So that’s why I think, besides communication, when you’re dealing with multiple vendors, it’s the realization that you can’t have as tight timeline and you need to put a lot more buffer into the warehouse project schedule than you would have if you just If you just have one vendor in that space and they’re just doing the work themselves. And that’s because any vendor, any person working in that space may have an issue or they may do something which is going to change the warehouse project schedule.

[00:24:14.890] And if you have no buffer, it’s going to push everyone and it’s going to create huge downstream issues in the schedule. So you need to put that buffer in so that it can eat up any additional time at any portion of the work is taken up by that buffer and it doesn’t actually push out the timeline. Okay, well, thank you so much for your time today. I had a great time discussing this with you. And have a great rest of the day.