Thinking about building a new distribution center? Here's what you should know

Brian Carlson, Principal, Cornerstone Edge, LLCBrian Carlson, Principal,Cornerstone Edge, LLC
Building a new distribution center is a massive undertaking. There is so much to consider, and a big part of it involves planning well into the future. Understanding your future business needs and making realistic predictions will go a long way in ensuring the warehouse you build will fulfill its function in the long term, not just for the next three years. After all, nobody wants to redo a massive project like a warehouse build multiple times in a decade—except maybe your contractors!

So, what are some key areas you want to focus on to ensure you build a warehouse that sets you up for success? Of course, technology will play a big part in that, as does your ability to select the appropriate tech for your needs—in terms of both hardware and software. And, as has always been the case in the warehousing space, labor management is crucial. What ties all of this together, and is of most importance, is the ability to access and decipher data to ensure you understand all your needs before making any big investments. Let’s break it down.

Start with data

Technology is great – but before you get caught up in the excitement promised by the potential of what new technology and solutions can bring, you need to consider a few things. For starters, you want to take a macro and micro approach to guarantee you don’t miss anything. You’ll want to look into facility location, future growth plans, product flow, accessibility, specifications, volumes, and the overall facility footprint. This is one area where your historical and projective data will be crucial in determining what your needs truly are. Think about it, just because some technology, like autonomous vehicles, works for one warehouse, it doesn’t mean it’s going to work in yours. Data will be your guiding light in deciding what technology and functionality you need to thrive.

Technology Considerations

There are two fundamental areas to consider with most warehouse builds: Material Handling Equipment and appropriate software. Investing in physical material handling equipment that uses technology to direct and move items throughout the facility can have a huge impact on efficiency. Consider an investment in application software (e.g. warehouse management) that consolidates tasks throughout your operation, eliminates double work and inefficiencies. But we feel the most important factor to consider is how technology can help with labor needs.

Material Handling Equipment (MHE) Investment

As we all know, hiring labor is getting harder and we believe the right technology decisions can help ease the burden by helping you do more with less. Warehouses and distribution centers are continuing to face a shortage of qualified workers as the number of opportunities in the sector continues to grow. In fact, according to the Bureau of Labor Statistics, warehouse employment reached the highest level ever recorded in December 2020, with 1.4 million workers in the warehouse and storage sector, and that number is holding strong as of April of 2021. With this continued growth, the need for tech to reduce dependability on labor becomes more and more important.

Now is the time to push the envelope with new technology that will drive efficiencies. There are a variety of warehouse automation technologies like Goods to Man systems, sortation, packaging, robotics, and more, that all have the potential to dramatically increase efficiency, boost productivity, and reduce costs. Autonomous mobile robots (AMRs) are also gaining in popularity. AMRs are designed to handle a slew of repetitive functions that could help you reduce labor needs and turnover, while also being adaptable enough to handle future facility layout changes.
No matter what direction you go in, make sure the MHE technology you invest in will actually bring value to your operation and isn’t just an exciting new toy that will be left unused and discarded after a few months.

Application Software Essentials

As you start considering the right technologies to implement, it’s important to realize that they are only going to be as good as the software that runs them. It’s common sense, if you don’t have the right software, you can’t optimize automation tailored to your needs. When looking into tech upgrades for your facility, you’ll want to make sure the software you choose will support them. So, what should you look for when selecting software?

• Business Requirements: It seems obvious that requirements should drive decisions, but many people choose a software vendor based upon a name, reputation, or industry. However, having a clear understanding of the uniqueness of your business and which system(s) best support it is very important. Often, companies choose a Tier 1 name brand application, but some smaller vendors may provide more targeted functionality for your needs and personal support.

• Integration: You want the software you choose to work seamlessly with your current technology but look into what options it has for future integrations with newer systems. If the software you’re considering has limited integration options now, it may not be worth it for the long haul. Choose an option with versatility and a future.

• Longevity: Be sure the software you choose will have consultants that will be able to provide support 5-10 years down the line. This means researching and looking into options that already have a proven track record.

And of course, you want software that is easy-to-use, accessible, and that the staff knows how to operate. Taking time to train your employees to get comfortable with software functionality will give your staff more autonomy and a sense of ownership that can help with employee retention while maximizing your technology investment.

Getting started

While all of this may seem overwhelming, when handled by the right team, it’s just another workday. Independent Consultants may be the right approach to take, as they are able to provide clients with an objective viewpoint, along with a larger number of solutions for each operational need. They have more incentive to locate the least expensive equipment with the best quality that meets each customer's requirements. Plus, with a consultant, you can focus on your business’s day-to-day needs, instead of taking time out of your limited schedule to lead facility-wide changes. Cornerstone Edge has completed facility re-designs, warehouse consolidations, technology evaluations, and so much more. We’re all about optimizing your supply chain through the implementation of technology that improves customer service, increases profitability, and reduces inefficiencies within your operation.

That’s clearly reflected in the work we were able to do with Petzl, who hired us as an independent consultant to help them validate and roll out a new flagship facility. Petzl needed an objective look into their many needs to ensure they chose the most viable path with the least amount of resistance. Working with a leading material handling integrator, we provided them with a tailored operation flow design that allowed for increased picking and pre- ticketing processing. It also allowed for customized value-add services, along with the integration of a new material and handling system, and the addition of a new TMS with the functionality to interface with their existing ERP and WMS software. As Independent Consultants, we were able to provide guidance on project management and risk mitigation and even functioned as the system technical expert throughout the project, to guarantee seamless installation.

The result? Petzl was able to reduce:

• Manual labor by 50%
• Pre-ticketing processing time by 25%
• Total labor by 10%

So, if supply chain changes are on your horizon, we’d love to talk to you! Whether they be operational changes, a warehouse move, a technology revamp, or other logistics needs, we'd love to help. Cornerstone Edge has both the strategic and tactical know-how to lead the way. Learn more at:
https://cornerstone-edge.com/
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