Distribution centers are getting bigger, and, along with the potential benefits, there are plenty of potential problems. Good planning, though, can help organizations navigate around them.
Thirty-eight percent of respondents in the 2013 Motorola Warehouse Vision Survey reported that they would increase the size of their warehouses and distribution centers over the next five years. Bigger can be better, but bigger can also lead to failure.
Here is how to achieve success when growing the size of your distribution center.
Increasing the square footage of your distribution center requires you to streamline your operations and optimize your processes. This means taking stock of your entire logistics and distribution process and strategically thinking about how these processes can be made more efficient. Areas where many companies can increase efficiencies include: decreasing reliance on paper, cross-docking, incorporating multi-modal wireless solutions, and revamping the pick strategy.
Communication across departments is essential when growing your distribution center. Communicating across departments will enable your company to be able to effectively plan for both current capacity requirements as well as capacity requirements that are forecasted in the near-, mid-, and long-term. Building a larger distribution center only to outgrow it five years later is a costly mistake. Furthermore, communication across departments will allow for the right-sizing of both equipment and labor.
Flexibility also becomes a factor along with growth. A large distribution center that can process a limited number of SKUs is, well, limited. A distribution center that is designed to be able to process a wide variety of goods and SKUs can reduce operating costs and enable your company to be more nimble. When designing your distribution center, keep flexibility at the forefront.
Finally, investing in technology and utilizing technology is vital to success. A larger distribution center requires more automation and more technology than a smaller distribution center. Similarly, a larger distribution benefits from mobile solutions.
When you grow the square footage of your distribution center, it is important to remember that you are dealing with a different beast.