New Distribution Center: Essential Steps to Planning & Implementation
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?