How E-commerce and Other Trends Impact Distribution Facility Planning
By: SupplyChainBrain July 24, 2014
The rise of e-commerce means that companies must re-think where and how they construct distribution facilities, says Bob Silverman of Jones Lang LaSalle. Silverman notes how other market trends also are impacting facility planning.
E-commerce fulfillment facilities typically need to be located closer to population centers than traditional DCs, says Silverman, vice president for supply chain and logistics solutions at Jones Lang LaSalle. The reason is not only to reduce transit time, but also to have access to a larger labor pool, he says. These facilities require more people per square foot because there is a lot of “each” picking, he explains.
“Despite the high unemployment rate, a lot of companies have trouble finding qualified labor, particularly for heavy pick-pack or e-commerce operations,” says Silverman. “So they tend to locate more toward urban areas where there is access to more and higher quality people,” both for regular employment and to meet the peak holiday requirements that are typical of e-commerce operations.
Facilities servicing e-commerce orders also can require different layouts, says Silverman. The need for a lot of pick faces often is accomplished by going three high in a pick module, so more height generally is required. Additionally, more automation is typical, which means more power.
There generally is less need for docks and trailer staging areas, but more space needs to be devoted to employee parking. “The higher density of people per square foot can increase parking needs by four or five times,” he says. “This space sometimes can be created by converting unused dock space or trailer parking.”
Distribution facilities of all types are focusing more on sustainability. “There is definitely a trend toward greener facilities that are more energy efficient and even self-sustaining,” he says. “There is a lot of unused room on the roofs of DCs, so that is a great opportunity to harvest power or wind.”