As companies decide where to locate their distribution facilities, they must take into account big changes in costs, technology, customer demands, and global economic conditions.
By John H. “Jack” Boyd
This is a slightly updated version of a story that first appeared in the Special Issue 2016 edition of CSCMP’s Supply Chain Quarterly, a journal of thought leadership for the supply chain management profession and a sister publication to AGiLE Business Media’s DC Velocity.
There is a complex web of factors that influence where a company chooses to locate a warehouse or distribution center (DC) and how it chooses to operate it. These factors can vary depending not only on the company’s own individual business needs but also on economic conditions and trends in the marketplace. The following are four significant trends that our clients say are affecting how they look at their distribution site selection and operations.
1. FOCUS ON COSTS
Costs have always played a large role in deciding where to locate a distribution facility. But in the face of uneven growth and economic uncertainty on both the global and domestic fronts, many cautious companies are keeping an even closer eye on costs. Hot-button areas include the rise of temporary labor staffing, expected to increase at a strong 3.5-percent pace in 2016, and industrial rents for warehousing space, up 8.6 percent nationally and well over 10 percent in markets like New Jersey, South Florida, and California’s Bay Area.
Click here to read the complete story in DC Velocity.