The changing world of warehousing, distribution and fulfillment

Today’s facilities related to e-commerce activities are striving to accommodate the increased demands of one-day delivery expectations. These demands mean warehouse, distribution and fulfillment center facilities need modifications, additions or upgrades of some form – now.

Consumer expectations are causing disruptions throughout the supply chain. These disruptions impact warehouses, distribution facilities and fulfillment centers. These facilities must adapt to the demands of e-commerce fulfillment, smaller orders, decreasing delivery time frames and a chronic labor shortage.

These challenges call for solutions that streamline operations, improve efficiencies and lower costs. Customization is moving from manufacturing into these facilities. Modern warehouses must achieve operational success by enhancing the customer experience, implementing smart integrations across systems, and utilizing advanced planning tools to support sustainability.

Modern warehouses, distribution and fulfillment centers also are incorporating physical changes. Front and center are automation and technology. There are disruptive technologies such as drones, augmented reality, artificial intelligence and robotics devices that require software, hardware, material handling and other systems. Successful integration of these disruptors with seamless interfaces and the communication of data between systems is critical to improved productivity and performance.
However, automated technology creates more heat. As a result, climate control has become more complex. Facility conveyers require increased power and the increased power brings more heat, so air conditioning becomes more important as more equipment is added.

Another physical major change is to clear height – the height to which product can be safely stored. Facilities are being built or renovated with much higher clear heights due to increasing demand for volume. Clear heights that were satisfactory in the past are no longer adequate; new facilities are reaching 40 feet and higher.

Higher clear heights increase construction costs because of required fire protection design and roof slopes and drainage design. Increased automation also has increased the demand for mezzanines.

Lighting also is being altered. New facilities are being built with more skylights and existing spaces are being retrofitted with LED lighting to reduce energy costs.

Location is of paramount importance, too. The right location must meet growing demands for quicker deliveries, especially of food products, which require that the freshest items reach the consumer ASAP.

Facilities need to be positioned closer to urban areas to meet the needs for immediate last-mile (now also being referred to as “last-touch”) delivery and e-commerce order fulfillment. Although fulfillment centers, distribution centers and warehouses can range in size from several hundred thousand square feet to over one million square feet, the supply chain industry is experiencing a demand for much smaller facilities.

Facilities ranging from 50,000 to 200,000 square feet are being located in infill locations to support e-commerce.  Smaller distribution centers can be used to service manufacturers so that they can drop ship for their retail customers or for larger customers that need closer proximity to customers in urban areas. This model of increasing the number of small facilities used to distribute goods is part of Amazon’s model to cut delivery times.

There is a real need to reassess how the space is being used in existing warehouses, distribution facilities and fulfillment centers. That reassessment creates opportunity to modify existing facilities.

One opportunity is the development of niche warehouses with cold storage or tightly controlled climate storage in a given space. Locating temperature-controlled warehouses near customers helps cut shipping costs while increasing the value of the facility due to higher profits from cold-storage goods.

The availability of land for industrial development for warehouses, distribution facilities and fulfillment centers is decreasing and that means increasing opportunities for existing facilities in the right location to be renovated, rehabilitated and modified.
There is no doubt that Amazon is the driving force in e-commerce, as its founder has declared: “Amazon.com strives to be the e-commerce destination where consumers can find and discover anything they want to buy online,” according to Jeff Bezos, founder, chairman, CEO and president of Amazon.

Today’s consumer continues to drive the need for more warehouses, distribution facilities and fulfillment centers. And that means more changes in those facilities will be coming.

Glenn Ebersole, is a professional engineer and business development manager at CVM Professional and CVMNEXT Construction in King of Prussia. He can be reached at gebersole@cvmnext.com or 610-964-2800, ext. 155.

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