Distribution Growth

Jennifer Nietz - Manager of Operations


December 2013 – As I was traveling over the holiday weekend, down a major Ohio Interstate, I was amazed at the amount of new distribution facilities that had emerged since my last trip just three months ago. New facilities were present and facilities had completed expansions and new additions. These facilities all seem to be distribution or warehouse space for a variety of industries. This caused my brain to wonder, “Is this common nationwide?”

Due to the nature of the warehouse environment and the types of services and products that are critical in these facilities, I would like to share some facts I have learned about their growth. The information gathered is from a trusted source I utilize in our client campaigns, Supply Chain Digest (SCD.) The facts below were developed and released by Motorola Solutions, who directly supplies products and services into the warehouse and distribution market, for release in one of the latest issues of SCD.

  • 35% of companies say that plan to increase their number of distribution centers over the next 5 years, while 38% say they plan to increase the size of their facilities.
  • 54% expect the number of SKUs they carry/manage to increase – only 10.7% expect SKU counts to drop.
  • 48% say they plan on increasing their use of so-called task interleaving, which involves combining DC tasks in something akin to a “continuous move,” such as a put-away move with a full pallet replenishment.
  • Yet, 51% expect inventory turns to rise, whereas only 7% expect them to fall – that’s a tough challenge with rising SKU levels.

 

COACT works with our clients every day to learn about the distribution and warehousing channels in their target industries. As such, and in the nature of holiday spirit, some of the recent industry news that might be beneficial to you and your organizations growth in the distribution channel in 2014 include:

  • Amazon.com has had an impressive growth strategy and is planning an additional 9 distribution facility openings in 2014
  • Publix plans to open its new 1 million-square-foot refrigerated distribution center in late fourth-quarter 2014 in the Lee Vista area of Orlando
  • Target is expecting a new food distribution center in West Jefferson, Ohio, that will open in 2014 and handle produce, as well as refrigerated, frozen and packaged foods

 

Interested in more breaking news on distribution expansions in 2014 and developing the most comprehensive plan to penetrate these environments?

Please contact Jennifer Nietz at jnietz@teamCOACT.com