Ihug concentrates operations

Ihug has outsourced its warehouse and done an unspecified deal with its travel business as part of a move to consolidate its operations in a single building.

Ihug has outsourced its warehouse and done an unspecified deal with its travel business as part of a move to consolidate its operations in a single building.

Last year, the company was spread across four locations: its Internet House main building at 127 Newton Road; its original "bunker" at 108 Newton Road; a nearby building in Dacre Street which housed its warehouse retail store and Travel Online agency; and offices in New North Road for its call center.

But over the weekend, all activities apart from its network operations center, which remains at 108 Newton Road, have been moved into a refurbished Internet House.

Ihug director Nick Wood says the move had some cost advantages "but it was more about getting everybody back under one roof. We spent a lot of time getting between the buildings and you had an us-and-them thing develop."

Wood says the four-storey building is now almost at capacity and will be the company's limit for the foreseeable future: "If they can't fit in here, we don't want 'em. Getting automated rather than adding people is the key from here."

Travel Online has moved to another location as part of a "change of structure" that Wood says is still confidential. Rival internet travel company travel.co.nz has sought to buy Travel Online this year, and it has also formed an association with INL, by providing travel services to the media giant's Stuff portal.

Ihug's last batch of redundancies this year related to the closure of its warehouse, whose operations have now been outsourced to Mainfreight.

"We realised that we're not experts in doing warehousing and we should never have tried," says Wood. "The real costs of running a warehouse and the people in it are outweighed by the benefits of having someone else store and forward for us. Our shipments are also going out in larger lots now too.

""We're looking at doing the same thing in Australia. It's just more economical. Mainfreight have an automated platform that we're building our systems to talk to."

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