June 26, 2010 Unfrozen In Time

Volume 6 | Issue 2

A third party warehousing and logistics firm operating in the cold clime of upstate New York, Allied Frozen Storage Inc. has deployed organi

Allied Frozen Storage Inc.’s growth closely parallels the shifting trends in American’s eating habits. Fast-food culture has encroached into the household, and we’re not talking about bringing home bags of burgers, shakes and fries.

Responsible consumers view typical fast-food fare as a fun alternative, much like a Friday night family pizza. But when it comes to daily needs, they require options that are as nutritious as convenient. Enter the frozen-food alternative.

Also enter Allied Frozen Storage Inc., a Brockport, N.Y.-headquartered firm that helped make the frozen-food alternative truly viable as far as nutritional needs. The well-vetted innovator of third party warehousing and logistics helped foster the freezer-based food culture.

Fifty years ago, “Mom” would dismiss such an approach as unthinkable. However, modern times require that we open our minds to new ideas. Indeed, in the past three decades, the familial structure has undergone significant shifts: Both fathers and mothers have been commissioned by changing societal mores to bring home equal shares of the bacon. So, we kiss the apron-ed mother archetype goodbye. She has flown out of the kitchen window, along with traditional dinner-table dynamics. While we do shed copious tears, we realize we need to move forward.

After all, who now has time to carefully bake the potatoes and commingle them with carrots and onions, and then surround a roasted chicken with this organic bounty? Not our new “mom.” She’s been empowered in the corporate culture. And not dad; he’s focused on keeping his work role financially viable.

So who suffers? Well, nutritionally speaking, no one really has to – and that’s due to efforts of companies such as Allied Frozen Storage.

EMERGENCE OF FROZEN FOOD CULTURE

Observe the expansion of the frozen food aisles within supermarkets. Allied Frozen Storage’s growth has matched that expansion. Indeed, the company propelled the expansion.

The company operates in a highly competitive marketplace, yet it has prospered via innovative cold storage technology. In such a cutthroat environment, the company keeps its competitive edge by offering state-of-the-art services such as radio-frequency tracking and optimal logistical software, accomplished via recently implemented 3 WMS Web-based Comprehensive 3rd Party Logistics Software (WMS). This innovative system enables Allied Frozen Storage to collect and distribute real-time data for shipping and receiving according to the food industry’s most stringent requirements.

WMS covers areas including receiving, cross-docking, picking, shipping, inventory control, cycle counting, bulk picking, date code tracking, AS2 EDI, RF wireless, automatic billing. More specifically, it accurately manages inventory using wireless bar code scanning and RF communications technologies and converts customer date codes directly into expiration dates automatically. Java based and Web-enabled, the application requires only a basic knowledge of WEB browser navigation.

It’s virtual technology. “It enables our customers to see not only what has happened but what is happening,” says Steve Kincanon, Allied Frozen Storage’s chief operating officer.

All reports are directly exportable to Excel. All BOLS, warehouse receipts, and invoices are created as PDF documents that can be emailed and/or printed.

Kincanon explains why Allied goes the extra length: It’s about profitability – the company’s and the customers’ “Continued investment in a sophisticated warehouse management enables us to track each customer’s profitability. More efficient warehousing ties in with our entire rating structure and ensures all customers a recognizable level of profitability.”

He adds: “Ever since we implemented the system, we have realized something in the neighborhood of 18 to 20 percent productivity gains.”

If that’s not enough, here’s some additional benefits: “The system is customizable,” says Kincanon. “That is, it is easily interchangeable with our customers’ systems, where we have direct EDI communications with customers and our system, but also with all of the modules contained within, such as accounting and transportation software.”

LEGACY OF INNOVATION

Such innovation depends on a strong heritage, and Allied Frozen Storage demonstrates the requisite track record. According to Kincanon, the company entered the cold storage business back in the early 1980s. Circumstances represented a serendipitous occurrence. At the time, two sets of brothers engaged in the building business (Charles and Matteo Pecorella and John Petronio and Carl Petronio) were hired by Birdseye to build a storage facility. From there, the brothers formed Allied Frozen Storage Inc., a third party warehousing and logistics company, in their hometown of Brockport.

“They entered the business almost by accident,” observes Kincanon.

In 1983, the brothers constructed a second plant in Brockport. Given the opportunity, they decided to operate the plant as well. During this period, they created a separate company: Allied Frozen Storage Inc.

Only a few years later, the company expanded into the Buffalo market. Then, in 1989, the company built a 212,000-square-foot cold and dry storage center in suburban Cheektowaga. A year later, it added a second, 101,000-square-foot cold storage site.

Expansion, construction and acquisition soon followed. Today, the company includes several New York-state based facilities. Three are located in Brockport. One such facility is a 7,500,000-

cubic-foot temperature controlled warehouse space, which boasts temperature ranges from 20°F to 50°F generated by a computer controlled ammonia refrigeration system. The second is a similar structure that measures 5,292,000 cubic feet. The third possesses 2,450,000 cubic feet of modern, state-of-the-art temperature controlled warehouse space.

In Buffalo, the company operates a 4,700,000-cubic-foot facility, while its Cheektowaga, N.Y. location includes 2,431,368 cubic feet of modern, state-of-the-art, temperature controlled warehouse space. Further, the Mount Morris, N.Y. site includes 991,747 cubic feet of single-story, temperature controlled warehouse space and 30,000 square feet of additional dry storage.

TOWARD CO-GENERATION

As the company moves forward, it has shifted its site attributes toward co-generation. “That represents a major investment, as co-generation addresses our utility requirements,” says Kincanon. “Utility costs represent a huge expense, when you consider the kinds of compressors needed to run inside our facilities. Now, our largest Brockport facility runs totally on natural gas-powered engines.”

He describes the benefits that co-generation has for the company: “During off-peak electric hours, mainly during the night, we’ve been able to keep things running with low-cost electricity. Then, during our higher peak hours of electricity usage, we turn on the gas-powered engines which generate our electricity.”

Bottom line? “Co-generation has allowed us to keep utility costs almost flat for the last two years,” says Kincanon. “In fact, when things recently peaked, we have been able to realize a 35-percent savings since 2008.”

The company’s energy efficiency consciousness extends to operational details, and this involves high-efficiency lighting. Kincanon describes how this comes into play: “When you operate storage rooms at zero degrees and then place light fixtures that generate about 200 degrees of heat, then you’re talking about energy inefficiency,” he says. “In response, we’ve installed lights that don’t generate any heat and, in turn, little energy. As a result, we can cool our rooms much less expensively.”

This directional move was not only ethical but also practical, relates Kincanon. “Throughout our existence, we’ve witnessed the volatility of utility costs. Typically electricity costs fluctuate along with gas and oil costs. So, we’re addressing the volatility – or instability, if you will – of the energy grid. And after what happened in 2008, we wanted to move in a more cost-efficient direction. Thus, our investments translate into natural gas-powered engines that run electricity into our Brockport facility, for instance.”

ENERGY MISER

The company made itself even more energy efficient by capturing the waste that comes off its engines. “This relates to dry storage,” says Kincanon. “We capture waste heat that we can transfer to dry storage areas. As a result, we can heat a 100,000-square foot dry room, such as we have at Brockport, at no cost.”

Cost savings impact both company and customers. “Power outages no longer affect us, and we also realize substantial cost savings. Further, it allowed us to keep our storage rates flat for the past two years, which translates into customer savings.”

Obviously, savings impact growth. “In the past two years, we’ve realized an annual five-percent growth rate,” relates Kincanon. “We’re looking at the same again for this year. When you consider the current economic conditions, that’s a huge success.”

But Kincanon, and the company, takes in the larger picture. “We are blessed by being in the food distribution business,” he says. “So, we’ve been somewhat shielded by the recession. After all, people have to eat.”

Yet, at the same time, economic circumstances require people to seek greater convenience. “Naturally, they look toward the convenience of frozen foods and microwave-able items. The consumers’ need fall right into our lap.”

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