“Short-term relocation of a new warehouse with cost reduction”
Kintetsu World Express (Malaysia) Sdn. Bhd. (hereinafter KWE) is a subsidiary of Kintetsu World Express, Inc., and an international general distributor which offers one-stop management of international air and sea freight transportation and logistics.
Upon the occasion that the company has a new warehouse in the FCZ (Free Commercial Zone) area in Penang International Airport, we were selected as the project manager for the relocation of the warehouses.
We asked the company the reason for the relocation and why they chose us as a project manager.
KINTETSU WORLD EXPRESS (M) SDN.BHD.
FCZ Area in Penang International Airport
Dry storage warehouse and cold storage warehouse
10,260m2
RC, Steel frame (Roof)
2 Storeys
KINTETSU WORLD EXPRESS (M) SDN.BHD.
FCZ Area in Penang International Airport
Dry and cold storage warehouse
Approx. 10,260m2
RC
2 Storeys
KWE: Penang has been known as a centre of electronics and medical equipment manufacturers in Malaysia. Many of them established their subsidiaries, and exportation of electronic products, semiconductor, medical devices and in-vehicle equipment is highly active there. As Penang is anticipated to continue growing in the future, we also needed to consider what to do for our future growth.
After considering, we have decided to expand the existing warehouse in the airport.
Mr. Satoru Kudo
Kintetsu World Express (Malaysia) Sdn.Bhd.
Managing Director
Mr. Rui Okuno
Kintetsu World Express (Malaysia) Sdn.Bhd.
General Manager/Office Manager
In this project, we expanded the GFA more than twice as big as before, and enhanced the total storage capacity including two existing warehouses in the airport to double. The new warehouse has “the air-con room,” which maintains the temperature and the humidity. It enables us to handle various needs from electronic and medical equipment companies.
KWE: Our biggest concern was how to complete the project within a limited time. We had to relocate by the end of January, 2021 since our contract of leasing the existing warehouses would expire. We had only five months to complete concept design, discussion with the local office counters, ordering, renovating and relocation. We are a logistics company, and are running the freight process all the time with clients. Therefore, we were not allowed to stop the operation in the warehouse. We had to complete the relocation including transfer of IT systems that manage cargos and logistics within 3 days that we can pause the operation including non-business days in consideration of the requests from clients.
KWE: Our biggest concern was how to complete the project within a limited time. We had to relocate by the end of January, 2021 since our contract of leasing the existing warehouses would expire. We had only five months to complete concept design, discussion with the local office counters, ordering, renovating and relocation. We are a logistics company, and are running the freight process all the time with clients. Therefore, we were not allowed to stop the operation in the warehouse. We had to complete the relocation including transfer of IT systems that manage cargos and logistics within 3 days that we can pause the operation including non-business days in consideration of the requests from clients.
Moreover, prior to the relocation, we had to progress the refurbishment of the new warehouse. For these reasons, we could imagine that the project management would be very complicated.
KWE: At first, we asked Plus PM to join the project as a coordinator responsible for office renovation. At this point, we thought the management of the relocation wouldn’t be too difficult to handle by ourselves.
At that time, our local staff led the project, but during the project, the staff left to start a new job. Having more meetings, we noticed that we have to go through a process we never heard of, and found it difficult to continue to do it on our own. It also seemed difficult to assign our employee to the project, so we consulted Plus PM.
Plus PM explained to us the flow of the relocation briefly, and we finally realised that we have so many things to be done.
We wanted to make things as clear as possible before we commence because the project must not have problems such as that it might be against the Fire Service Act or the Law for building, or that we notice the failure after commencing.
While we were struggling with applying to the authority, negotiating with the tenant owner by handover, and discussions about the project, we reached the conclusion to get help from a person who can manage the project well.
We asked Plus PM to manage various tasks from the contractor selection for renovation of the warehouse to managing the progress daily.
Even though we have a very short period, Plus PM accomplished the project management with prioritising tasks and pointing out and confirming what to do now.
We asked Plus PM to manage various tasks from the contractor selection for renovation of the warehouse to managing the progress daily.
Even though we have a very short period, Plus PM accomplished the project management with prioritising tasks and pointing out and confirming what to do now.
KWE: Plus PM understood us very well. At first, in addition to the hearing of what kind of warehouse we are looking for and how we want to relocate, Plus PM did field investigation for how we are using the warehouses and the office and operating there to understand our daily operation. They also researched how the pallets with cargos move, etc.
Second, they mapped the layouts to make sure the way of use and that there is no problem with the construction regulation. It visualised what we were trying to get.
Before the relocation, the operational status was around 60-70%, but thanks to the new warehouse with a great productivity, the operational status of both the upper layer and the lower layer is currently over 100%.
We think it was a good point that local staff could tell their opinion for the construction. Because they told what they thought, the facility is now more convenient for them to use. We appreciated it very much.
Before the relocation, the operational status was around 60-70%, but thanks to the new warehouse with a great productivity, the operational status of both the upper layer and the lower layer is currently over 100%.
We think it was a good point that local staff could tell their opinion for the construction. Because they told what they thought, the facility is now more convenient for them to use. We appreciated it very much.
KWE: Speaking frankly, we would like the best effect with the least cost. However, making it come true seemed quite difficult because in our project, many tasks such as building a refrigerated storage, renovating the office and relocating were going on simultaneously.
Amid this situation, Plus PM told us that a turn-key contract with a main contractor would cost more. For cost reduction, we agreed to use the scheme that both Plus PM and we conduct general management so that we can easily tender each contractor with a split order method.
Plus PM selected contractors for each work, and suggested us the best companies from various perspectives. The suggestions were considered if they meet our requirements and if they offer appropriate costs. Plus PM conducted this process very carefully to let us have the best service and supplies.
To maximise cost competitiveness, we tendered both Japanese and local construction companies, and it’s awarded by the Japanese company in the end. The final offer was reduced by 20%, and came in under our budget.
KWE: Compared to a new building construction, renovation can progress faster day by day. Plus PM took a leadership position, managed the quality with reports from the site, and decided where to focus.
When some work was being delayed, Plus PM had a thorough discussion with the contractors. Especially when the plan has been changed and we needed to increase the renovation area because of the policy change of KWE‘s client, Plus PM negotiated with all the contractors and prioritised the tasks to follow the construction program and the procedure.
We were sure that Plus PM had responsibility for having this project done punctually no matter what happens. With that strong responsibility, we could trust them and focus on what we should have done.
Management of the process and quality of construction
When some work was being delayed, Plus PM had a thorough discussion with the contractors. Especially when the plan has been changed and we needed to increase the renovation area because of the policy change of KWE‘s client, Plus PM negotiated with all the contractors and prioritised the tasks to follow the construction program and the procedure.
Management of the process and quality of construction
We were sure that Plus PM had responsibility for having this project done punctually no matter what happens. With that strong responsibility, we could trust them and focus on what we should have done.
KWE: We are glad to complete the relocation of the office and the warehouse as scheduled. No additional cost incurred, and we could move into a new environment on time.
It sometimes happens that we have to change the schedule due to the unforeseen circumstances in such projects, but Plus PM addressed such difficulties with other options and ideas. We would like to express our appreciation for those actions. We will surely choose Plus PM again when we have another new project in our other office.
Shuhei Okuda
Project Manager
We believe that our PMr/CMr should be a great partner for clients to succeed in their project. For the warehouse area, we should have taken time to prioritise the requests and decide the layout because KWE needs to discuss with each client. However, our schedule was not long enough to take such time as we had to complete the relocation within the limited time. I still remember the intense period where we were to make many decisions in a short period while reviewing the schedule, discussing with KWE about the main points and sharing priorities and risks. I am glad and grateful that KWE, the contractors and we have accomplished the project together by cooperating with contractors and managing a detailed schedule.
Plus PM Consultant Sdn. Bhd. provides project management and construction management expertise in construction projects in ASEAN. We also provide assistance for companies looking to enter and expand into the ASEAN market.
Plus PM Consultant is a Construction Consulting and Construction Management company serving clients in ASEAN countries
Head Office (Kuala Lumpur)
16-16, Level 16, Wisma UOA II, Jalan Pinang, 50450 Kuala Lumpur, Malaysia
JOHOR Office
Suite 18-01, Level 18
Menara JLand JB City Center
Jalan Tun Abdul Razak
80000 Johor Bahru, Johor
PENANG Office
3-3(2249), Level 3
Lorong Setia Sentral 1
Pusat Perniagaan Setia Sentral
14000 Bukit Mertajam, Penang
HANOI
Plus PM Vietnam Co., Ltd.
7F, The Imperial Suites
71 Van Phuc, Lieu Giai Ward
Ba Dinh, Hanoi, Vietnam