How to Select a Distribution Center Site

by | Mar 15, 2021 | Blog | 0 comments

Examples of Amazon Mega distribution Centers

March 27, 2021

This is a 30 page supplement to the hub and spoke article.

We post links to large projects with visuals so that Churchill residents can see what is being built elsewhere and will have a visual for comparison since Hillwood continues not to reveal the architectural renderings of their proposal for a mega distribution system on the former Westinghouse campus property. 

You will notice that these are not in residential locations, and that freeway on and off-ramps are too modern design to accommodate the extensive trucking required for these centers to function efficiently.   Nor does the traffic transit residential properties.

You may be particularly interested in the Boxwood development further below.  Here is a quick image of it 20% completed.

amazon site

 

All announcements for Amazon projects stress jobs and lower taxes, and get local politicians to claim support because who can ever be against jobs or lower taxes, even when everyone understands they are exaggerated if not outright distortions or omissions.

See how closely the Clay NY proposal matches the Hillwood presentation, and the acquiescence of local governments to these juggernaut developers.  All the negative consequences are ignored or minimized to avoid local resistance.  Of course none of these are in residential communities.

And of course the developer will be asking for tax breaks from the state and regional agencies for these supposed positive contributions to the region.   Meaning they stress the small millage local rates paid to the school and local municipality against the higher state tax breaks.  So the total taxes collected are quite small or nothing at all.

You can search yourself about the 5 story Clay NY project.

Even here the actual height of the 5 level distribution center is distorted on the renderings submitted.

The interesting links are below: Follow them.

This is a collection of links with additional sub links for background on how and where to select locations for distribution centers.  The important thing here is that the infrastructure is critical to the success of any distribution center.

Compare these articles to the former Westinghouse R&D campus to see just how inappropriate a distribution center is as a solution to increased revenue for the borough and school district.

It should be obvious that the local infrastructure does not exist.  The most obvious areas are can be found on the antiquated design of the Parkway East with its odd and restrictive on/off ramps, leading to local streets not designed for heavy and slow big rigs.

These two photos will give you a perspective on the scope of the project as to the footprint and height.

 

 

 

 

 

 

 

The actual height authorized by the borough at the request of Hillwood is 125 feet high, actually higher than this example by about 80%.

Here is the index of the primary articles below:

Choosing a Warehouse Location: 7 Critical Criteria to Consider (cyzerg.com)

Warehouse | WBDG – Whole Building Design Guide

13 Questions to Consider When Weighing a New Distribution Center (multichannelmerchant.com)

Best Practices in Distribution and Warehouse Facilities Design | Market Share (naiop.org)

https://supplychainminded.com/warehouse-distribution-center-whats-difference/

Differences Between Warehouse vs Distribution Center | CMorgan

The document is approximately 35 pages.

How to Select an Optimal Distribution Site – Site Selection magazine – September, 1999

How to Select an Optimal Distribution Site

Choosing the right location for one or more distribution centers is a less daunting task if these seven tips are used.

b y     R U S S     D I X O N


 

 

 

 

Common business wisdom used to hold that if you built a better mousetrap, the world would beat a path to your doorstep. But that was before people started shopping over the Internet and expecting almost instantaneous delivery of the products they ordered.

Today, a growing number of customers demand exceptional logistics service from their vendors. As a result, running an efficient outbound distribution program has become increasingly important for every company interested in keeping and attracting customers. And employing the right logistics process has become one of the easiest ways to get a leg up on the competition.

There are many components to a logistics process. However one of the most critical — and easiest to control — is the distribution center, or centers, you use. With that in mind, here are seven tips to help make the distribution site-selection process a little more productive.

  1. Define the acceptable limits of “on-time.”First and foremost, your center or centers of choice must be able to meet your customers’ demands for timely delivery. As a result, your search for the perfect distribution center should start with a concrete definition of what “on-time” means.

Much of the definition depends on what your customers think is a reasonable turnaround time from order to delivery; this expectation that can vary significantly from company to company and industry to industry.

For example, a catalogue clothing company may find that its customers are more than content to have their orders shipped to them within a week to ten days. By contrast, a company that makes replacement parts for mainframes may find that its customers think that even a day is too long to wait, and that its customers will very rapidly switch vendors if their needs aren’t met. Another litmus test is the nature of the product and the potential consequences of a late delivery. For example, fresh produce that languishes on the loading docks too long could end up in trash bins instead of grocery bins. And a short supply of some products, such as heart replacement valves, could truly turn out to be a life-or-death situation. Companies who carry these products will, quite naturally, have stricter standards for on-time delivery.

  1. Determine how many distribution centers you want.The second key issue to consider is how many distribution centers you want to operate. It’s an important question for two reasons. First, it could have a substantial impact on the cities you choose as distribution points. For example, if you elect to operate only one distribution center, you’ll probably wind up in a major population center, like Chicago, or a city located close to the center of the country, such as St. Louis. By contrast, if you opt for several distribution centers, you might end up in more geographically dispersed markets, say Denver, Seattle or Jacksonville.

The number of distribution centers you choose to operate also will affect the size of the distribution centers you look for in each market. The larger the number of facilities you use, the smaller each facility should be.

Consultants and third-party logistics providers are frequently asked what the magic number of distribution centers is. Unfortunately, there’s no single right answer, although the national average skews to between three and four distribution centers. It depends on your budget, comfort level and customer needs as well as your ability to pay inventory carrying costs.

  1. Select distribution markets.Once you’ve figured out how many distribution centers you want and how quickly you need to get product to customers, it’s time to compare specific distribution markets.

Here are just a few of the issues you should consider:

  • Proximity to customers. As a general rule, closer is better. If most of your customers are in California, this will make a market such as Los Angeles more appealing than a market such as Fresno–unless you have days to make deliveries.
  • The price of reaching customers from a particular market. Certain markets’ real estate prices are cheaper than others. However, you have to look at your distribution in terms of total cost, and that means factoring in the cost of transporting products from that market, too.
  • The potential quality of a workforce in a given area. Despite major advances in technology, distribution is still a people-intensive process. Look carefully at the talent pool you can pull from in each market and at the prevailing wage rate. This is especially important these days, because unemployment is so low.
  • Access to a good selection of transportation providers. Unless your whole logistics program is supported by an in-house fleet, you’ll want to have the option of working with a wide selection of less-than-truckload carriers. This increased competition should result in better service, higher availability and more attractive pricing.
  • The quality of a market’s transportation infrastructure. Virtually every city of any size in the United States has roadways and airports. But there is a big difference in the number of small parcel flights that leave each day from places like Grand Rapids and places like Atlanta, and what time those shipments go out. If you ship a lot of urgent orders, you should probably restrict your search for distribution centers to markets with major airports or air hubs. And if you are global, or plan to be, port cities should get extra consideration.
  • Weather. If your orders are especially urgent or last-minute in nature, at least one of the distribution markets you choose should be in an area where Mother Nature rarely if ever interferes with shipment schedules. This might rule out places like Buffalo or San Francisco as sole distribution sites.

Not surprisingly, comparing all of these criteria can take weeks or months. However, many site-selection software packages can at least make the process a little less painful. These packages enable you to compare any number of scenarios, such as establishing a two- or three-distribution-facility network, to help build the network that will best suit your needs. And the software enables you to pinpoint the best distribution markets based on your preferences, performance standards and budget parameters.

You can buy such packages yourself, or you can use a consultant or third-party provider that has access to them. Either way, it’s money well spent.

  1. Compare facilities within markets.Once you know what markets you want to be in, the distribution center site-selection process comes down to searching for and comparing individual facilities.

At last count there were about 250,000 distribution facilities located throughout the United States. But as any logistics professional will tell you, not all of them are created equal. Among the things you should compare are:

  • Access to roadways. At some point, most products move by truck–even if that truck goes straight to an airport or seaport. Unless you enjoy paying higher transportation bills, proximity to interstates and highways is essential.
  • Number of truck doors. One sure way to create a distribution bottleneck is to get a facility with too few places for trucks to make pick-ups or deliveries. Your facility should have enough truck doors to facilitate the smooth flow of inbound and outbound shipments.
  • Clean, well-sealed facilities. Most distribution facilities will look clean to the naked eye. However there are a few tell-tale signs that can help you identify facilities where dust and other contaminants are likely to be a problem. These signs include daylight showing through closed dock doors and cracks in the floor.
  • Climate control. A good number of distribution facilities do not have air conditioning or heating. So if you have a temperature-sensitive product, you’ll want to make sure your facility has some method of handling these sensitivities.

Additionally, if you decide to use a facility run by a public warehousing or contract logistics provider, you’ll want to weigh each provider’s strengths and weaknesses and ability to offer value-adding services. After all, a facility is only as good as the people managing it.

  1. Compare costs, but be careful.The next recommended step in distribution center selection is, perhaps, the most overrated and dangerous one, because it concerns money. Although you should always compare costs when choosing a distribution center, don’t let economy cloud your judgment. For one thing, the lowest rent or sale price doesn’t always equal the lowest cost. A facility’s additional expenses like taxes, insurance and utilities can have a substantial impact on the actual cost to operate it. So can its shape, age and height.

Bear in mind that your customer service could suffer if you automatically choose the cheapest facilities and markets. In order to find the distribution center that is truly the most cost-effective, you must look at the big picture, factoring in all the potential costs and benefits. Once you do this, you may end up choosing a completely different facility than the one you originally would have selected. 6. Improve your flexibility and compromising skills. And now for the grim truth: Even if you conduct a rational, by-the-book search for the perfect distribution site, there are no guarantees that you will find it. This is especially true if you’re looking in such popular distribution markets as Atlanta, Dallas or Los Angeles, where larger-sized facilities are in great demand, or in emerging markets like Mexico, where particular kinds of facilities don’t even exist.

When this happens, you have three options: You can search in another, comparable market. You can build a facility in your market of choice. Or you can go with a less-than-perfect facility and use technology to help improve it.

Software can help you figure out the best layout for your facility, the optimum methods of storage and the most efficient number of shifts. As a result, you can optimize your facility’s productivity. You can also take some consolation in the fact that your choice of facilities doesn’t have to be permanent.

Instead of buying a distribution center, you can always lease one, or you can use one operated by a contract logistics provider. This will buy you more flexibility to re-evaluate and reconfigure your distribution center network down the road, which brings us to the final piece of advice.

  1. Don’t Assume you’re through.Good logistics is a process, not an event. As a result, you can never assume that your site-selection job is complete. A distribution center that gets the job done today may not even come close tomorrow, because there are always fundamental shifts in how people buy and what they expect. And companies themselves are forever changing.

Many logistics experts recommend re-evaluating logistics configurations and centers once every couple of years. It may sound like a lot of work. But considering the potential payoff, it’s probably one of the wisest investments any company interested in progress can make, especially in a world where building a better mousetrap is now only part of the secret to success.     SS

big-box.pdf (korteco.com)

24 pages to read  –  they are a builder like Hillwood.

Choosing a Warehouse Location: 7 Critical Criteria to Consider (cyzerg.com)

Choosing a Warehouse Location: 7 Critical Criteria to Consider

Choosing the right warehouse location can make all the difference in how effective, efficient, and profitable a company is. Leasing or purchasing a…

by Hector Sunol   •   Jul 15, 2020   •   10 MIN READ

sing the right warehouse location can make all the difference in how effective, efficient, and profitable a company is. Leasing or purchasing a warehouse is a major decision, and a choosing the right location can significantly enhance a company’s ability to compete and effectively serve customers.

When it comes to selecting a location, it’s important to take the time and consider all of the following criteria, take some notes, and then compare your notes against all the available options. Only after all the data has been compiled and analyzed should the final decision be made.

Let’s review the 7 selection criteria for the best possible warehouse location.

Rent Rates & Taxes

Cost will remain a key criterion when selecting the right location of a warehouse, but it must not be the only one. Hidden costs could offset any savings on cheap rental rates and therefore must be considered.

The rental rate of a warehouse in the US is normally based on square feet (SF) per year or month depending on the landlord. Average prices in the US can range from as low as $2.56 SF/Year and as high as $16.50 SF/Year. See table below for top 6 low & high cost markets.

 

 

 

 

 

 

 

 

 

For more real-time warehouse costs you can use www.loopnet.com.

Data Source: Industrial Market Outlook 2017

In addition to rates, attention must also be given to local governmental regulations, tax structure and tax incentives. You could also benefit from special local government programs intended to promote your industry segment, so it pays to consider this as well.

Workforce Availability, Labor Skills & Costs

Workforce availability, skills, and labor costs are directly associated with local demographics. Not every geographical location offers a workforce with the right skills at the right price. Pay attention to the local demographics of the state/city being considered.

When evaluating workforce availability, consider supply and demand: Low workforce availability and high demand will drive salaries up (meaning the operating costs will be higher). The opposite is also true. High levels of workforce availability and low demand will drive salaries down.

Besides workforce availability and costs, skills are also critical. A workforce skill gap will result in a low quality of customer service and a reduction in both competitiveness and productivity.

The following chart demonstrates the impact of a qualified/trained workforce in the logistics industry.

Improvements Noticed as a Result of Undertaking Training or Qualifications

So, when choosing a warehouse location, research the demographics and focus on educational attainment, population characteristics & income levels. A quick Google search for “[city or state] demographics” should pull up the needed information. City and state government websites are also likely to provide this information.

Roads, Highways & Traffic Flow

Accessibility to roads and highways as well a local traffic density must also be considered, especially if trucking is the main mode of transportation.

Transportation costs are affected by some or all of these variables and can impact the competitiveness of the company or the attractiveness of the warehousing facility to customers. Consider the following points:

  • Accessibility to highways & exit ramps
  • Highway inter-connectivity
  • Public transportation penetration
  • Average traffic speed
  • Average traffic volume
  • Traffic peak hours
  • Road safety & conditions
  • Proper roads signs & signals

Factors such as congested highways and surface roads as well as poor signaling systems will increase fuel consumption, accident rates, and time wasted.

Proximity to Airport, Railway Stations & Ports

In this case, the main mode(s) of transportation used to receive or ship goods to and from the warehouse must be prioritized. For example, if most of the cargo is imported/exported via air, then you will want to be as close as possible to the airport. If this is not possible, you should at least explore facilities with easy access to highways and roads that offer a direct connection to the airport.

You want to be as close as possible to the point of the most predominant transportation mode in order to control drayage costs and have the highest possible velocity level – the maximum number of containers per month.

The following info-graphic contains data from the Department of Transportation displaying shipments weights by transportation mode for 2013, and the expected volume for 2040.

Data Source: Bureau of Transportation Statistics

Markets & Local Environment Factors

Proximity to suppliers, producers and the market(s) being served as well as local environmental factors must be also considered.

Any new warehouse should be as close as possible to major suppliers, producers, and/or customers. This will help reduce lead times, decrease transportation costs, and enhance responsiveness.

The factor to consider here is who is/are the major supply chain partner(s) and how you can make the supply chain more efficient by strategically selecting the warehouse location.

Also, local environmental factors such as weather conditions and risk of exposure to natural disasters should also be considered.

Would the warehouse be exposed to hurricanes, tornadoes, or earthquakes? Is it in a flood zone? For any of these risks, the warehouse must meet specific building requirements.

Other local environmental factors that should also be considered include, proximity to neighbors (warehouses can be noisy – avoid disputes), traffic congestion, and peak traffic hours. Consider how these variables could affect regular operations.

Building Availability & Utility Costs

If the business grows or shrinks, you will need to adjust accordingly. If this is the case, you will want to minimize your need to re-evaluate all these factors if moving to a new warehouse is your only option. By moving within the same area, you will be able to retain your workforce, utilities, etc., and minimize the frustrations of carriers/truckers and customers trying to find the new location.

One last aspect: utilities. You will want to double check the availability and cost of utilities. Some warehouses are more demanding/dependent on one utility than another. For example, refrigerated warehouses are more dependent on electricity and water.

But there is one utility that almost everyone ignores: internet and communication services. Remember to check not only the availability of internet services, but also the speed and link type (Cable, T1, Fiber, etc.) available as well as all associated costs. Also, remember that on occasion, the installation of internet services can take up to 3 months – or more.

Please, take the time to properly plan and understand the most strategic warehouse location for you and your customers. The impact of this decision is much more significant than just opening a warehouse somewhere. The location of your warehouse will have long-lasting effects on the financial, operational, and competitiveness aspects of the company.

If you want more warehouse content, you can follow us on LinkedIn, YouTube, Twitter, or Facebook. You can also message us through our contact page if you have other inquiries.

Warehouse | WBDG – Whole Building Design Guide

Planniwbdg.org/building-types/warehouseng a New Distribution Center: Steps to Planning and Adequate Implementation (planettogether.com)

 

 

4/27/20 10:30 AM

By PLANETTOGETHER

eCommerce has become a huge industry – which means that having distribution centers in areas that are near your customers is how you are able to actively reduce transportation costs, ensure for adequate fulfillment times, and ultimately increase profitability within your operation. With emerging eCommerce channels and increased SKUs, facilities across the globe are finding themselves in a bind in terms of making the decision to build new distribution centers.

This is particularly a large concern for smaller manufacturers, due to not having the financials or backing that rather large manufacturing facilities are equipped with. Many small manufacturers are finding themselves in this situation, especially during this crisis during the coronavirus. When is a good time to establish a new distribution center? How costly would a new distribution center be? Is it worth it and is there a high pay-off? These are questions you need to ask yourself as you contemplate establishing a new distribution center. As many manufacturers are coming to the conclusion that this is what they need, it is essential to understand the steps you will take to ease the planning process. Therefore, here are the steps needed to establish a new distribution center within your operation.

Planning a New Distribution Center: Steps to Planning 

Here are the steps needed in order to adequately plan a new distribution center:

  • Identify Problems – When making the decision to move into a new distribution center, there is obviously a well thought out reason behind it. Whether there is not enough space, you are closer to your customers, or there is a more convenient location for your business, establishing what exactly the problem or issue may be is absolutely essential. Therefore, identify all potential issues or problems that may arise or are already showing their face and what areas need to be improved. Once this is identified, set requirements and objectives within your operation and your distribution center. What is the overall goal within your operation? To minimize operating costs? Have a more efficient and organized storage system for inventory? Establishing well defined goals will effectively aid with this process.
  • Consider Potential Growth – Establishing a projection for future growth can prevent business from having to relocate anytime soon. Your distribution center needs to be able to meet long-term goals of expansion, which is why considering the growth that your company has seen over the past five years and how growth will continue over the next few years is vital. If you are planning to multiply distributing capabilities, move into a building that will allow room for this growth.
  • Analyze Distribution Center – When investing in a new distribution center, it is important to take a look at the building’s current condition. Take note of any details pertaining to the amount of cubic space, configuration of the building, floor condition, and the fire protection system. Also take note of the environmental conditions of the surrounding facility and how they could potentially be an issue down the road. Once you have obtained this information, a thorough analysis needs to be conducted to determine if the goals of your company and objectives are able to be achieved in this distribution center. Make sure that your building space meets the set objectives that you established within the potential growth stage before moving forward with any sort of plan. All of these components are extremely important to consider when attempting to analyze a new distribution center.
  • Create a Detailed Plan – One of the last steps in planning a new distribution center is creating a detailed project plan. When developing a project plan, it is essential to be as detailed as possible. Ensure that measurements are accurate, plan out materials you plan on stocking, and SKU numbers for optimal organization of inventory. What kind of racking or shelving will creative a productive, dynamic, and efficient distribution center? In order to achieve a distribution center that is the one you need, you need to make sure that you layout an adequate and detailed plan that will allow you to fulfill all obligations.
  • Implement Your Plan – Lastly, it’s time to implement your plan. If you followed the steps and constructed a detailed and thorough plan, your distribution center should be functioning efficiently. Have your goals been met with your new distribution center? A new and improved distribution center gives you a sustainable competitive advantage. If you took the necessary steps to ensure that the project was successfully installed and implemented, your should should be operating smoothly.

If you are constructing a warehouse for your production facility to send inventory to, then Advanced Planning and Scheduling (APS) Software may be a viable option. Advanced Planning and Scheduling (APS) Software allows manufacturers to develop schedules and plans pertaining to their production process and ultimately enhance their operation in terms of efficiency. This can aid warehouse storage through minimizing inventory holding costs and ensuring for a perfect amount of inventory within the distribution center. Advanced Planning and Scheduling (APS) Software has become a must for manufacturing operations around the globe that are seeking to take their facility to the next level.

Advanced Planning and Scheduling Software 

Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.

  • Create optimized schedules balancing production efficiency and delivery performance
  • Maximize output on bottleneck resources to increase revenue
  • Synchronize supply with demand to reduce inventories
  • Provide company-wide visibility to capacity
  • Enable scenario data-driven decision making

Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.

Warehouse | WBDG – Whole Building Design Guide

Warehouse | WBDG – Whole Building Design Guide

by Ed Acker
Steven Winter Associates, Inc.

Updated:   05-31-2017

Warehouses, defined here, are facilities that provide a proper environment for the purpose of storing goods and materials that require protection from the elements. Warehouses must be designed to accommodate the loads of the materials to be stored, the associated handling equipment, the receiving and shipping operations and associated trucking, and the needs of the operating personnel. The design of the warehouse space should be planned to best accommodate business service requirements and the products to be stored/handled. The economics of modern commercial warehouses dictate that goods are processed in minimal turnaround time.

The different types of warehouses include:

  • Heated and unheated general warehouses—provide space for bulk, rack, and bin storage, aisle space, receiving and shipping space, packing and crating space, and office and toilet space;
  • Refrigerated warehouses—preserve the quality of perishable goods and general supply materials that require refrigeration. Includes freeze and chill space, processing facilities, and mechanical areas; and
  • Controlled humidity (CH) warehouses—similar to general warehouses except that they are constructed with vapor barriers and contain humidity control equipment to maintain humidity at desired levels.

Special-designed warehouses meeting strict requirements can also provide liquid storage (fuel and nonpropellants), flammable and combustible storage, radioactive material storage, hazardous chemical storage, and ammunition storage.

Features already now common in warehouse designs are higher bays, sophisticated materials-handling equipment, broadband connectivity access, and more distribution networks. A wide range of storage alternatives, picking alternatives, material handling equipment and software exist to meet the physical and operational requirements of the warehouse. Warehouse spaces must also be flexible to accommodate future operations and storage needs as well as mission changes.

BUILDING ATTRIBUTES

Being utilitarian facilities, warehouse designers should focus on making the warehouse spaces functional and efficient, while providing a safe and comfortable environment for the workers to increase productivity and control, reduce operating costs, and improve customer service. Even warehouses have to maintain a corporate image and provide for worker satisfaction. Building image and aesthetics, landscaping, and worker safety and comfort, become important issues in competitive real estate markets.

  1. Types Of Spaces

Depending on the program of the warehouse being designed, space types may vary dramatically.

  1. Space Configurations

Warehouses should:

  • Be designed based on current and future needs.
    • Facilitate changes in business/agency growth, and size/population of office and warehouse spaces within the building. Warehouse space should be easily adapted to new functions such as office (on ground or upper levels), computer centers, or light industrial/fabrication.
    • Accommodate need for future loading docks, truck space, and car parking spaces if space configuration changes through effective site design.
    • Address material handling technologies and business practice, such as “just-in-time” storage, which have fundamentally changed operation of warehouses and distribution centers, and will continue to do so.
    • Include roof design with built-in extra structural capacity to handle addition of future rooftop equipment.
    • Be designed with fire protection capacity to accommodate storage of materials with a greater fire hazard, especially needed with high plastic product content or packaging, and plastic shrink-wrapped pallets.
  • Maximize utilization of space while providing adequate circulation paths for personnel and material handling equipment such as forklift trucks.
    • Use higher bays to take advantage of height allowances in the space.
  • Optimize layout and configuration for the warehouse operation, including efficient circulation and material handling and storage processes.
  • Relate interior and exterior receiving and shipping operations to the process flow of goods through the warehouse.
  • Receiving and shipping are best separated to avoid congestion at the loading dock areas in the building, and in the truck maneuvering areas.
  • Alternative material handling methods will determine other building aspects, such as aisle widths, lighting design, need for mezzanine space, fire protection, and egress design. Businesses will often use different methods of storage handling simultaneously for different products.

View enlarged storage alternatives

View enlarged picking alternatives

  1. Durable / Functional
  • Be planned to accommodate loads of stored materials as well as associated handling equipment.
    • Design of warehouses is to be based on the dead and live load requirements of the structure as it will be built. Snow, wind, and seismic loads shall be considered where they are applicable. Racking in seismic areas must be built stronger and be better braced.
    • Wind uplift can cause great damage to roofs and metal roof copings at the roof edge. Building codes recognize that wind velocity is greater across open areas, typical for warehouse zones.
    • Wind-driven rain can easily penetrate the vast surface areas of the warehouse walls. Design walls to permit any infiltrating water to evaporate harmlessly without collecting in the wall cavities or damaging stored product.
    • Proper floor types are an important consideration in the design. General warehouse space should be floored with a concrete slab to carry wheel loads and withstand the abrasion generated by the continual use of hard rubber and steel-wheeled forklift trucks. Consider adding hardeners and dustproofers to protect the concrete. Consider using epoxy coating on concrete floors near battery charging areas.
    • Floor flatness and levelness requirements are critical, especially for high ceilinged space and safe operation of high-lifting equipment.
    • Adequate space must be provided on-site for truck maneuvering, truck storage if the business owns a fleet, car parking for employees and future office space/population expansion (which might be driven by higher rent for center-city office space), and landscaped areas.
  • Be designed to ensure that no structural member will interfere with the spacing of rail car doors or truck berths at dock spaces. Dock heights on the truck side of the terminal should be approximately 4’—4″ above the pavement, with appropriate ramps at each truck berth to bring the height of the truck bed in line with the dock height. Dock heights on the rail side of the terminal should be approximately 3’–9″ above the top of the rail to ensure that the rail car floor is even with the dock floor. Dock widths and areas inside exterior doors leading to dock space must be planned for maneuverability of forklift trucks and other expected types of material handling equipment.
    • Dock heights on the truck side of the terminal should be approximately 4’–40″ above the pavement, with appropriate ramps, scissor lifts, or dock levelers at each truck berth to safely bring the height of the truck bed in line with the dock height.
    • Tops of doors should be high enough to accommodate full height pallet handling from the highest trucks.
    • Dock heights on the rail side of the terminal should be approximately 3’–9″ above the top of the rail to ensure that the rail car floor is even with the dock floor.
    • Dock widths and areas inside exterior doors leading to dock space must be planned for maneuverability of forklift trucks and other expected types of material handling equipment. Consider using a non-slip finish on the concrete floor near loading areas for safety.
  1. Energy-Efficient
  • Be designed with passive solar concepts, solar geometry, and building load requirements in mind.
  • Possess light colored roof to reflect a large percentage of solar radiation, reducing HVAC loads, and energy consumption. First cost is also reduced, due to the smaller plant size required. When a large roof area is anticipated, this effect can be significant, especially for temperature controlled warehouses. Greater heat reflection will increase wroker productivity in the summer.
  • Be planned with interior dock space in colder climates to reduce energy consumption and provide more tolerable winter working conditions for dock workers.
  • Use ceiling mounted fans to reduce heat stratification and provide air movement, thus increasing worker comfort in both summer and winter. Mount fans above highest forklift level for worker safety.
  • Consider specifying white painted metal roof decking, thereby increasing ceiling surface reflectivity, lighting efficiency, and worker comfort without any added energy cost.
  • Use energy-efficient fixtures, systems, and appliances, e.g., motion sensor instant-on lighting systems, wherever feasible.
  1. Safety / SecurityOf Personnel And Material
  • Address the traditional life-safety and health concerns common to all buildings, including measures to prevent occupational injuries and illnesses (work-related musculoskeletal disorders (WMSD), trips, falls, etc.), ensure electrical safety, and eliminate exposure to hazardous materials. The following operations have historically contributed to significant numbers of warehouse injuries and are considered to be the most hazardous: docks, powered industrial trucks, conveyors, materials storage, manual lifting/handling, roof ladders and hatches, and charging stations. Other serious operational safety problems include inadequate fire safety provisions, improper blocking of exits and egress paths, chemical exposure, improper use of lockout procedures, lack of ergonomics, and failure to wear personal protective equipment.
  • Incorporate proper signage to clearly warn of hazards or to direct personnel to take precaution. The specific strategy for the warehouses signs must be determined early in the facility design process.
  • Possess non-slip surface treatments on floors subject to wetting, such as outdoor docks, to eliminate slips and falls to personnel.
  • Be designed with fire sprinkler systems engineered to cover the specific commodity classification in the specific storage configuration for the planned warehouse. The adequacy of the sprinkler system must be evaluated when changes occur that can increase the hazard classification, such as introducing a new product line, using a different packaging material, or changing from wood pallets to plastic pallets.
  • Include appropriate security systems incorporated into the overall warehouse design.
  1. Health/Comfort

Examples of natural lighting designs for warehouse structures.

  • Provide proper ventilation under all circumstances.
  • Provide local exhaust for restrooms, kitchens, janitor’s closets, copy rooms, battery-charging areas, etc.
  • Consider installing CO2 sensors to provide real time monitoring of air quality.
  • Integrate daylighting with the electric lighting system.
  • Allow for natural lighting where possible. Provide lighting controls that turn off lights when sufficient daylight exists. Consider dimming controls that continuously adjust lighting levels to respond to daylight conditions.
  • Consider the different natural lighting designs for warehouses.
  • Minimize HVAC system noise in occupied space.
  • Use furnishings, chairs, and equipment that are ergonomically designed and approved for that use.
  • Design equipment and furnishings reflective of healthy work practices in an effort to eliminate repetitive motions as well as prevent strains and sprains.
  • Strive to create a ‘sense of place’ such that the warehouse has a unique character that engenders a sense of pride, purpose, and dedication for individual workers and the workplace community.
  1. Example Design And Construction Criteria

For GSA, the unit costs for this building type are based on the construction quality and design features in the following table . This information is based on GSA’s benchmark interpretation and could be different for other owners.

EMERGING ISSUES

Automated Storage and Retrieval Systems (AS/RS) are reshaping the ways in which goods and services are manufactured, stored, and distributed. AS/RS have become a means to control and immediately report the movement of material, providing a critical link in the chain of information systems that control work-in-process, manufacturing schedules, and distribution. AS/RS warehouses are designed for maximum storage and minimum personnel on site. They are built for lower temperature operation with minimal heat and light needed, but require a tall structure with super level floors.

In the private sector, competition, technology and e-commerce are forcing distributors to look for ways to move larger quantities of their products more quickly and efficiently to the consumer. Clustering distribution centers in a single geographic area is among the new trends. There is also a move towards transportation specialization, such as companies that depend on substantial parcel air transport, locating near Memphis, TN, while Columbus, OH rates higher for companies focused on overland distribution.

Labor availability and technology advances are factors driving many companies to consolidate their distribution systems into fewer but larger, regional facilities. However, not all companies are consolidating their distribution centers: in many areas, the consolidation trend itself is producing a new generation of smaller, local distribution centers. Experts say that new logistical handling systems and greater outsourcing-in particular, the increased use of third-party logistics providers-seem to be driving this trend.

New “flex” warehouses in well landscaped industrial park settings for smaller businesses is a growing trend. These buildings accommodate small businesses such as contractors, light industrial fabricators, and mechanics that do not need exposure to heavy retail street traffic. In older industrial areas, small warehouse buildings with low roofs, no longer suitable for large single commercial users, are being repositioned and renovated as multi-tenant “flex” warehouse buildings.

Forces outside the parameters of the normal building project can generate great changes in warehouse design. Examples include accelerated tax write-offs in the 1980’s, which enabled speculative construction of much larger buildings; again 1980’s federal regulations to permit much larger over-the-road trucks, which required commensurate changes to site space given over to truck space; local real estate market prices, which often makes it economically attractive for companies to relocate much of their corporate back office space at their regional distribution center; increasingly tighter environmental and permitting processes, which leaves the market to the larger developers, resulting in usually larger projects; and the reclamation of former “brownfields” industrial sites for either new industrial or other uses.

RELEVANT CODES AND STANDARDS

Warehouses must be designed to meet all local building, fire, and life-safety codes. When in doubt, consult with the local building official. The Occupational Safety and Health Administration (OSHA) also provides guidance for warehouse safety.

Several design criteria and guidelines exist for federal warehouses:

ADDITIONAL RESOURCES

WBDG

BUILDING TYPES

Aviation Facilities, Land Port of Entry

SPACE TYPES

General Storage, Light Industrial, Office, Warehouse

DESIGN OBJECTIVES

Functional / Operational—Account for Functional Needs, Productive—Ensure Reliable Systems and Spaces, Secure / Safe—Fire Protection, Secure / Safe—Security for Building Occupants and Assets, Sustainable—Optimize Energy Use, Sustainable—Enhance Indoor Environmental Quality (IEQ)

Organizations

Publications

Websites

Others

 

13 Questions to Consider When Weighing a New Distribution Center (multichannelmerchant.com)

13 Questions to Consider When Weighing a New Distribution Center

Curt Barry

June 1, 2016

When we start a consulting assignment to select a new distribution center, I can’t tell you how many times the client starts with, “Let’s start looking at buildings. What will new space cost? How quickly can we move in?” For sure these are important questions. However in today’s direct-to-customer marketplace it’s important to start with the strategic issues first and the facility requirements afterward.

Amazon’s same-day orders and shipping within four hours are forcing other DTC companies to follow suit with multi-DC strategies. And as small parcel shipping costs have skyrocketed, this approach is the best way to rein them in.

Still, many companies are not prepared to expand in this way. Among other things it requires considerably more inventory, an expansion of the fulfillment organization outside the current market, and changes in ERP and OMS systems to plan assortment and manage customer order fulfillment by DC.

[Get updates on omnichannel & DTC operations | Subscribe to O+F Advisor today!]

First, decide on the strategy and then the specific site location(s) and new building specifications. As you begin to implement your new facilities plan, here is a 13 point checklist to consider:

Identify and answer strategic questions 

Strategically, what are the issues the new facility should be part of addressing. Here are a few:

1). Time to Customer: What pressures from customers and competition do you need to address? How will this continue to change overtime? Are you losing sales because the shipping time is too long, based on small parcel service levels (e.g. ground in 1 or 2 days, overnight, etc.)? If your business has retail replenishment or wholesale, what are the standards for distance, delivery schedule and service level? Analyze your customer base and get future growth projections.

2). Same-Day Shipment: Location to your carrier’s induction points for small parcel hubs is key, as well as staffing and having efficient processes. For example, a Virginia-based DTC business can pick, pack and ship up to 5:30 p.m. all year, but to ratchet up competition, they ship 100% of all orders daily. Another client in the Midwest has a cheap labor market and building but has to cut off same-day shipping at 2 p.m.

3). Reducing Shipping Costs: Analyze your shipping history and costs for the current DC network. How does theoretical placement of one or more DCs in concert with time-to-customer objectives reduce costs? An East Coast/West Coast strategy yields some major benefits, but may require four or five regional DCs to maximize savings and benefits.

4). Labor Quality, Cost and Availability: If you’re considering changing labor markets, or adding locations, analyze labor quality, cost and availability. Many key distribution cities have very low unemployment and higher labor rates.

5). Changing Locations, Changing Costs: Analyze how a new location changes the total occupancy costs (i.e. lease, utilities, taxes, etc.), management and labor costs and inbound/outbound shipping costs.

These are some of the strategic questions that should be addressed first.

Develop facility requirements 

The following are some of key questions on requirements as you plan for and begin to compare existing buildings:

6). Facility Access: What is the optimal facility location for truck traffic, including local roads and interstates?

7). Facility Requirements:

  • Current and future growth space projections: Take into account number of active and inactive SKUs, assortment growth plans, auxiliary functions (e.g. kitting, personalization), and the need for increased department space (e.g. docks, returns processing). This is where many mistakes are made which leads to under-sizing facilities.
  • Clear span of the facility to include the cubic storage available
  • Will the building’s shape and footprint give you improved workflow?
  • How many inbound and outbound dock doors do you need?
  • Special use functions, like returns processing and refurbishing for fashion apparel (20% to 30% or more) will have a much different square footage requirement than hard goods (1% to 5%)
  • Truck yard requirements for trailer storage and on site traffic
  • Floors condition: Single level or multi-level? Sealed or unsealed?
  • Should column uprights be at standard distances, or will the footprint and column placement make the racking and layout inefficient?
  • Working environment, including temperature control
  • Parking places sufficient for shift size
  • Space for employee lockers, bathrooms and lunchrooms

Develop your specific requirements so you can check off how well each facility that you review meets your needs.

Analyze the overall strategy and facility impact

8). Weigh and compare the specific site options and existing buildings including total occupancy cost, the impact on inbound and outbound transportation and labor availability and cost. Recognize that build to suit is at least a two-year process from completion of analysis and management green light.

9). What organizational changes are required? The expansion to multi-DC means new management and staff. For a local move, at what distance will you lose management and workers?

10). Are there other options like third-party fulfillment (3PL) to consider?

11). Take state and county incentives into account if available. However be sure the location and facility is right for your distribution strategy, including the labor market.

12). Develop a five-year financial summary taking into account one-time costs like moving existing inventory, as well as capital budget and ongoing operational costs.

13). Perform a risk analysis for the various options. Risks could include slower than expected facility startup, potential turnover of new staff and management, more inventory required and system changes.

Future MCM blogs will explore these issues in more detail.

Opening new facilities and implementing new fulfillment strategies is exciting, but they’re also major long-term investments in your company’s infrastructure and customer service. Both strategic objectives and specific facility requirements need to be considered in order to make the right decision.

Curt Barry is Founder and President of F. Curtis Barry & Company

Planning and Implementing a New Distribution Center | QMH, Inc.

w Distribution Center: Essential Steps to Planning & Implementation

Racking, Uncategorized

With the growth of e-commerce over the past five years, new distribution centers are adjusting to growth and changes to accommodate all of the new online sales coming through:

“Retailers are evolving their multichannel strategy — from outsourcing fulfillment operations to third parties as a short-term solution to taking it “in-house” by building DCs that can handle both individual and store orders in the same facility” –Kris Bjornson, Area Development.

It’s important to obtain a new distribution center that you know will benefit the company in the long run. The following are essential steps to successfully purchase and plan out a new distribution center that will provide an efficient, productive, and dynamic use of building space.

Identify problems and decide what you need

When making the decision to move into a new distribution center, there is obviously a well thought out reason behind it—not enough space, more convenient location for business, etc. Whatever your reason may be, it is essential to make sure the new distribution center will accommodate all business needs and function efficiently. Firstly, identify any and all issues or problems that are currently being faced. Decide what changes need to be made to improve these issues, whether this is a taller building that provides more storage density or a building with more docks for loading and unloading. Don’t let building constraints restrict your desired design or layout. Additionally, set requirements and objectives for the distribution center. Are you looking to minimize operating costs at your warehouse, or have a more efficient and organized storage system for your inventory? Having well defined goals and objectives will help you find the best building to fit your needs.

Consider potential growth and future needs

Projecting potential future growth will prevent businesses from having to relocate anytime soon. Your distribution center should be able to meet any long-term goals of expansion you have. Consider the growth your company has seen over the past five years, and project growth over the next five years in the future. If you expect to multiply your distributing capabilities, make sure you move into a building that will allow room for this growth.

Analyze your new distribution center

One of the first things to consider when investing in a new distribution center is the building’s current condition. Note details about the amount of cubic space, configuration of the building, condition of the floors, and the existing fire protection system.  Have your concrete and sprinkler system inspected to make sure they can accommodate the weight and density of the materials and the storage system you will be installing.

Once detailed information is obtained, a thorough analysis should be conducted to determine if your company’s goals and objectives can be achieved in this distribution center. Make sure this building space meets the previously set objectives and requirements before moving forward with your plan. Budgets, maintenance, storage systems, and staffing are all examples of things to think about ahead of time so you can properly plan to be able to implement your business into your new distribution center.

Create a Detailed Project Plan

When developing a project plan, it’s important to be as detailed as possible. Make sure all the measurements you have are accurate, include door and dock locations in your drawings, etc. Plan out all of the materials you plan on stocking, including their dimensions, weight, and SKU numbers for optimal organization of inventory. What kind of racking or shelving will create a productive, dynamic, and efficient distribution center? Don’t let cubic square footage go overlooked—utilize all the space that you have!

Your project plan needs to layout tasks, resources needed to complete them, and a timeline of dates that these tasks will be accomplished. When will these resources be available? What is your budget for each specific task? These are important questions to keep in mind while constructing your project plan. Once your plan is fully developed, review and check it to be sure it’s doable and realistic for your business.

Implement your plan

When your well-thought out and detailed plan transforms into reality, your distribution center should be fully functioning efficiently. Have your goals been met with your new distribution center? A newly improved and highly productive distribution center gives you sustainable competitive advantage. If you took the necessary steps to make sure the project was successfully installed and implemented, your facility should be operating smoothly and achieving the objectives set at the beginning.

How QMH Can Help

QMH has been in the material handling industry since 1991, and brings extensive experience to your project. We start with a free consultation to determine your needs. Our design specialists work with you to determine the perfect layout and design for your new distribution center. We also offer free inspections to make sure your development gets off on the right foot.

Questions to ask when looking for a new distribution center:

  • What has/hasn’t been working in your current warehouse?
  • What type of equipment will you be using?
  • How does the product flow in & out of the facility?
  • Is there enough room for the storage system to accommodate the amount of inventory you will have?
  • Is there enough parking for your employees?
  • How much office space will you need in this building?
  • How much growth do you expect to see over the next five years?
  • How well will the distribution center be able to adapt to growth?
  • How many people are going to be working in your distribution center?
  • How much do you distribute annually?
  • What are your future plans for your company?

Resources:

https://www.areadevelopment.com/logisticsInfrastructure/March2013/e-commerce-distribution-center-site-requirements-26281443.shtml

Best Practices in Distribution and Warehouse Facilities Design | Market Share (naiop.org)

27  JUL  2020

Best Practices in Distribution and Warehouse Facilities Design

POSTED ON JULY 27, 2020  BY BRIELLE SCOTT  AND HAS NO COMMENT

NAIOP has published a new 2020 edition of “Rules of Thumb for Distribution/Warehouse Facilities Design,” a 60-page e-book authored by Bryon Pinckert, former principal with HPA, Inc. Pinckert has drawn on his firm’s decades of industry experience to explain best-practice methods for planning and designing warehouse facilities in the publication.

In this interview, Pinckert shared his thoughts on COVID-19’s impact on industrial facilities design, if malls should really be used for distribution centers, the implications for accelerations of automation, and more.

This e-book was originally published in 2005. When you look at the earlier edition, what are some notable guidelines that have changed?

It was interesting to see that the guidelines haven’t changed so much as extended. In 2005, a large distribution center had a footprint of a few hundred thousand square feet. Today, a large distribution center is in the range of one million square feet. As footprints have evolved to be larger, the technology of fire protection systems has evolved to allow large buildings to grow taller as well. The 2020 Rules of Thumb e-book extends the guidelines from the 2005 edition to illustrate all the new approaches to optimize this new scale of facility.

How do you hope the e-book will be utilized by commercial real estate professionals?

The industrial real estate market is in many ways defined by the leasing brokerage community, and varies geographically. This is sometimes at odds with the trend of large-scale national logistics operations that want to reinforce common operational standards in their different geographical facilities. This book doesn’t just say the appropriate depth of a truck yard is 130 feet, it explains why it is 130 feet, and under what circumstances it would make sense for it to be something other than 130 feet. Both industrial real estate developers and brokers will be able to use this information to have more meaningful dialog with end-users.

What technologies do you see most poised to impact warehouse/distribution facility design in the near future?

There has been tremendous investment in automating as much of the logistics work flow as possible, and automation in many forms will start to change some of the guidelines we currently use. The use of robotics for pick operations is what is driving a new set of multilevel prototypes for some e-commerce users. Automated Storage and Retrieval Systems (AS/RS) are driving taller clear heights and new conveyor mezzanine configurations.

What are some of the differences in guidelines for urban/infill versus traditional warehouse where space isn’t a limitation?

There are several drivers that change the rules of thumb in urban locations. One is land cost; land costs more in an urban location. This means the FAR calculation becomes more important to a successful project, and the rules of thumb need to be reexamined without compromising too much on functionality. In urban locations, the tenant is more likely to be focused on fast small delivery as opposed to large truckload sortation, and understanding how those uses differ in terms of trucks and forklift equipment is important in the design process.

What are some adaptive reuse strategies that are put into practice when converting other spaces (like former malls)?

Distribution uses work best in open spaces with as few obstacles as possible. The typical suburban retail mall that we see becoming vacant has uneven column grids and odd geometries that are not a great fit for most operations. They can be made to work, but it’s not ideal. Big box retail facilities, however, can work very well for a number of last mile users. The on-grade condition works for loading delivery vans, and the customer parking lots can be converted to van or box truck parking.

There is a new phenomenon we’re starting to see in certain markets where office vacancy rates are high. We are seeing low- to mid-rise office buildings being purchased and demolished to make way for modern industrial buildings. It doesn’t seem to make sense in that the FAR remains similar, but it shows we are on the cusp of a market condition in some locations where Class A industrial space may lease for more than Class B office.

Will COVID-19 impact any of the guidelines you’ve included? Ex. increased need for automation, design considerations for communal areas.

The automation trend was in full force prior to the pandemic, and adoption and investment will accelerate given the current situation, which is likely to impact the U.S. for some time.

We are just seeing the first programmatic shifts of reducing worker density in picking and packing operations, and in the designs of common areas like lunch rooms and training rooms. Some of the more nimble e-commerce groups are starting to increase space allocations in these areas, and it’s likely to increase the overall demand for floor area to some degree.

If another edition of this e-book were to be published 15 years from now, how could you see it changing? What sections might be longer? Shorter?

There will be dramatic change in the design of distribution facilities 15 years from now. The retail revolution has put a microscope on the entire logistics process, and significant disruptions to the traditional models are underway. The pandemic caused a major shock to the system, and the rate of change is increasing like the exponential growth of infection.

But today much of the change is in the form of experiments with new methodologies and technologies. There’s an old saying about the trailblazers being the ones with all the arrows in their backs. There will be some of that, and it’s not clear which gold rush is worth “taking some arrows” for. There will be a lot of legacy infrastructure that will continue to be accommodated. Even if there are self-driving electric trucks rolled out tomorrow, a facility will need to continue to work with the trucks of today for quite a while. A very narrow-aisle forklift truck represents a big financial investment, and they will be in use for some time, even as there is a trend to more automated mechanisms.

Buildings will be different 15 years from now, but it’s difficult to pinpoint what the new rules of thumb will be. It is a sure thing that designing today with the rules of thumb in this 2020 book will give any developer a step up in today’s marketplace. And if you really read it (instead of just copying the numbers), you will have a good understanding of how to accommodate change in the building you design next year as well.

Warehouse vs Distribution Center – What’s the Difference? | SUPPLY CHAIN MINDED

Warehouse vs Distribution Center – What’s the Difference?

By    Baidhurya Mani

CONTRIBUTION BY BAIDHURYA MANI – supply chain analytics trainer and author of a bestselling supply chain course

A lot of logistics professionals use the terms warehouse and distribution center interchangeably. Some of them even say that “there is effectively no difference between a warehouse and a distribution center”. So, how different is a distribution center from a warehouse? Let me tell you upfront that they are as different as a modern 21st century supply chain is from a traditional supply chain.

The simple rule in traditional supply chains was to store “maximum possible quantity of every product, everywhere, every time”

This rule had to be followed because of lack of information flow and planning mechanisms in the supply chain. This gave birth to the warehouses which were used for stockpiling inventory and inventory would be shipped out months after it arrived in the warehouse.

Supply chains have evolved and are much different from what they used to be say 2-3 decades back. Modern supply chains equipped with better information & intelligence are able to predict product demand well in advance, plan accordingly and deliver the items close to when they are needed.

The new supply chain rule is to have “the required quantity of the right product in the right place at the right time”

The traditional warehouses are not completely fit to cater to this new supply chain rule and this led to the evolution of static warehouses into distribution centers. Now that you know the context, let me tell you the exact difference between a warehouse and a distribution center:

  • A warehouse is used for storing products while a distribution center, apart from storing products offers value-added services like product mixing, order fulfillment, cross docking, packaging etc.
  • A distribution center stores products for relatively lesser periods compared to a warehouse. So, basically the flow velocity through the distribution center is much greater than the flow velocity through a warehouse.
  • A distribution center is customer-centric and is the bridge between a supplier and its customers. While the role of a warehouse is to store products efficiently, the role of distribution centers is to efficiently meet customer requirements.
  • Typically retail and warehouse orders are shipped from a distribution center and not a warehouse. Basically a warehouse generally doesn’t serve external customers while a distribution center does.
  • The operations at a distribution center is much more complex than that at a warehouse. As a result, the distribution centers are equipped with latest technology for order processing, warehouse management, transportation management etc.

You now know the stark difference between a warehouse and a distribution center and how the evolution happened over time. Does this mean that warehouses no longer exist or they don’t serve any purpose? You will be mistaken if you believe that. Warehouses still exist and serve a purpose. A good example would be how inventory is pre-built months in advance to meet the high seasonal demand and is stored in typical warehouses before being sent to a distribution center for customer service. However, the importance of warehouses in supply chain has gone down and the distribution centers have now emerged as the nerve centers of the modern supply chains.

Differences Between Warehouse vs Distribution Center | CMorgan

Differences Between Warehouse vs Distribution Center

Posted on January 4, 2018

While the difference between a warehouse vs distribution center may not be apparent to some; they have very different meanings and duties in the logistics industry. To be able to distinguish warehouses vs distribution centers, you must first understand what each is.

A lot of logistics professionals use the terms warehouse and distribution center interchangeably. Some of them even say that there is effectively no difference between the two. So, how different is a distribution center from a warehouse?

Differences Between Warehouse vs Distribution Center

Once you know the specific roles each play in the supply chain, you’ll be able to make an informed decision on which would be best suited for your business.

What is warehouse?

A warehouse typically refers to a place where goods are stored for an extended period of time. Warehouses are a little less high-energy than distribution centers since there’s not as much activity going on. Sorting items, shipping them out, and replenishing stock are all a part of the daily functions. Distribution centers can act as warehouses too, but warehouses can’t double as a distribution center.

Warehouses can be designed to receive goods directly from railways, airports, or seaports, and are usually equipped with cranes and forklifts for moving and organizing goods. Some warehouses are temperature controlled, making them well-suited for storing groceries, other perishables, and other materials including raw materials, packing foods, spare parts, and more.

What is a distribution center?

A distribution center is a little more complex than a warehouse in that it’s often described as a high-velocity operation as opposed to a static warehouse. This basically means that a distribution center offers more services to clients, whether they’re internal or external.

Usually housing products for short periods of time before they’re shipped out. Distribution centers can also offer services like:

  • transportation
  • cross-docking
  • order fulfillment
  • labeling and packaging

As well as any operations necessary to complete the order cycle—this includes

  • order processing
  • order preparation
  • shipping
  • receiving
  • returned goods processing
  • performance measurement

Warehouse vs Distribution Center

When it comes to pitting warehouses vs. distribution centers against each other and deciding which would be best for your company, there’s no universal answer. It depends on the specific needs of your company—thinking about whether you need long- or short-term storage is one of the key factors you’ll need to consider. You’ll only be able to decide which is right for you after weighing the pros and cons of each.

Christopher Morgan Fulfillment

To provide our clients with cost-effective, flexible, high quality fulfillment solutions, we create and customize services to meet each business’s unique needs. Our goal is to serve as a seamless extension of our clients’ businesses to make sure all client and customer needs are met. We understand how important our clients’ relationships are and treat each of our clients’ customers’ orders as if it were our own.

Warehousing and Distribution Milwaukee Services:

  • Import/Export
  • Case Pick/Open Case Pick
  • Small Parcel Shipping (Fed-Ex, UPS, DHL, USPS)
  • Cross Docking
  • Just-in-Time (JIT)
  • Retail, direct-to-consumer & business-to-business distribution.
  • Contract (Dedicated) and Public (Multi-Client) facilities
  • Real-time web access to inventory
  • WMS with full reporting and analytics
  • EDI/ASN
  • Cycle Counts
  • Value-Added Services
  • Overflow and Seasonal Warehousing
  • Inventory and supply chain management
  • Milwaukee Warehousing

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