Avoiding the Growing Pains of Expanding Distribution
Growing in concert with consumer demand, distribution centers are getting bigger. In fact, a 2013 Motorola Warehouse Vision Survey reported that a full thirty-eight percent of respondents would be increasing the size of their warehouses and distribution centers over the next five years. And while there are certainly potential benefits, there are also plenty of potential problems. With good planning, though, organizations can successfully navigate around the pitfalls of distribution center growth.
Here’s how to achieve success when growing the size of your distribution center.
Streamline operations and processes
Increasing the square footage of your distribution center requires extensive strategy pre-planning. 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.
Optimize communication across departments
Communication 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.
Allowing for flexibility is a key factor of successful 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.
Invest and utilize technology
A larger distribution center requires more automation and more technology than a smaller distribution center. Similarly, a larger distribution benefits from mobile solutions. As more specific and sophisticated technology emerges, implementing smart technologies can aid in your efforts to achieve optimization of communications and streamline your operations more efficiently.
When the square footage of your distribution center grows, it is important to remember that you are dealing with a different beast. It’s one that requires extra careful thought. Taking the time to consider potential problems and preparing a solid plan of implementation before you begin will increase your odds of successful growth.