9 Questions to Ask When Planning a New Distribution Center

A house will stand the test of time if it is built on a solid foundation. But if the foundation is done poorly or support beams aren’t placed strategically, the house won’t stand. As soon as a storm hits, it will crumble, along with the deep investment its owners put into it.

Don’t let that be the future of your new distribution center.

New distribution centers (DCs) best support future needs if they are designed against a solid foundation of planning assumptions and requirements. It’s true that building that solid foundation requires an investment of time and money, but without it, the rest of the plan is put at risk of failing quickly and without notice.

To protect the investment you’re about to pour into your new distribution center, take time to give thoughtful consideration to a wide range of questions. Answering these will form the foundation upon which you can build everything else:

1. What are your company’s investment criteria, capital limitations, and payback requirements for this new facility?

2. What is the timeline for starting up the new operation? Does this dictate a simplified design or a two-phased startup approach?

3. What are the service requirements for the operation in terms of turn time for customer orders? Do these requirements meet your company’s competitive strategy for the future?

4. What is the inventory profile for the product mix being handled? Is this highly seasonal? Is there a distinct A/B/C mix of products that allows for differences in how products are being stored?

5. What is the shipping profile for the range of customer orders? Is there a distinct A/B/C mix of orders that allows for differences in how these are being assembled?

6. What are the seasonality requirements for your operation, and how much can the operating week length be pushed during peak season to deal with the demands on the operation?

7. What is your company’s appetite for automating operations as a means for simplifying the operation, improving accuracy, and reducing the dependence on labor availability in the local market?

8. Does the systems architecture for the new facility provide for forward-looking improvements in customer service and inventory accuracy?

9. How much growth capacity should be provided for? Can the new facility be developed to allow for an initial size and a future expansion?

Today’s market is dynamic and competitive; it’s constantly shifting and changing. In order to stay relevant, it’s imperative to make sure that you analyze these questions fully to avoid any potential pitfalls.

If you’re worried about the extra time required to think through these questions and come up with a solid foundation, consider the time and effort in relation to the grand scheme of the project. Because so much time and effort already goes into establishing a new facility, the extra amount of time it will take to build the foundation is small compared to the potential financial loss that could occur should the facility fail. Building the foundation now helps prevent that loss in the future.

Remember, the biggest risk of not exploring these questions is that tomorrow’s new facility might only serve yesterday’s customers.

Whether you need to build a new facility or update an existing one, we combine innovative conceptual thinking with sound engineering to determine the best design to support your needs. Contact us today to learn more.