6 Common Pitfalls in Starting a New DC

Success in bringing a new distribution center into operation requires a coordinated effort across a number of fronts, especially if the facility is a large, highly complex operation that is required to handle a demanding service level.

Much of the success relies on strategic preparation, including the ability to predict potential downfalls and adapt accordingly. Before you bring a new distribution center into operation, consider these six common pitfalls that far too many companies fall victim to, even those with distribution centers based on a good design.

Pitfall #1: Insufficient resources.

Some teams fail to organize the proper resources needed to meet the project timeline, focusing too much on potential savings without realizing the domino effect that relying on limited resources can have. The traditional timeline needed from inception to startup of a new distribution center is 18 to 24 months. This timeline can be accelerated, but that acceleration is only successful if the necessary level of resources are planned for and deployed.

How to avoid it: Have a plan in place for providing the necessary amount and level of resources for the project.

Pitfall #2: Weak partnerships.

The “long pole in the tent” for bringing on a new facility could be the systems development, the facility permitting and construction, or material handling equipment and design. Sound partnerships with the local officials and with the providers of each of these services are a must for working through the complexity of issues and challenges that are likely to arise.

How to avoid it: Work on building relationships and establishing solid partnerships from the very beginning. Keep everyone educated on the process and in the loop with what’s going to avoid any miscommunication or unnecessary conflicts.

Pitfall #3: Poor integration of systems, equipment, and processes.

The process of bringing a new facility on line requires multiple phases of conceptual planning, detailed design, and coordination of the systems, equipment, and processes to be used. Failure to consider the often conflicting requirements of each of these resources at a detailed level can create operations that just don’t work right, if at all.

How to avoid it: Plan, plan, design, design, and then plan and design some more. As you plan each level of the design, make sure that each element of systems, equipment, and process is considered and any tradeoffs in the design of each component will still provide a design that meets the business objectives of the facility.

Pitfall #4: Lack of communication.

When there is a lack of timely communications with the proper level of project management, the project can fail. Demanding startup timelines always have unexpected developments and those developments should be communicated well every step of the way to avoid further delays or conflicts.

How to avoid it: Timely review and proper elevation of issues to decision makers is needed to manage expectations and resolve issues before they get out of hand.

Pitfall #5: Forget to test thoroughly.

All new distribution centers inevitably go through a debugging and shakeout process; no center is created perfect, no matter how much planning and design is done. But some centers shortcut testing for the sake of staying on track with the timeline or trusting too much in a fail-proof design. However, without thoroughly testing, the debugging efforts are left to be done during live operations where the cost of mistakes becomes even more expensive.

How to avoid it: Take the time to conduct a thorough, stepwise process for testing the facility at unit, system, and integrated operation level ahead of startup.

Pitfall #6: Overly aggressive transition approach.

The approach of “sink or swim” may be the best way to get toddlers acclimated to the water, but it’s not the best approach for new operations. Rather than diving in all at once on everything, it is much better to start off a new operation by simply dipping a toe in first. Taking on too much too fast causes distribution centers to fail as the operations management team doesn’t get enough time to grow into the full load before figuring out which approach is the best.

How to avoid it: Give your distribution center a month or a season of limited demand to allow the management team to get a much-needed feel for the operation and make necessary refinements before taking on full demand.

Keep these pitfalls in mind, and along your process of designing a new distribution center, remember to check that you’re avoiding them. Doing so will not only save time and money, it’ll also prevent team burnout that often accompanies ill-designed projects.