December 4, 2010

Distribution Centre Operations Start-up: 2

Filed under: supplyline — Tags: , , , , — admin @ 3:19 pm

Designing and constructing a Distribution Centre is a process that could take you 3 years or more to bring to conclusion.

As supply chain people, when we talk about design we refer to the internal design of the distribution centre, the design of storage and materials handling media and the sizing of the building.

The design will be based on a multitude of factors, all to do with the operations you want to have in the premises. Typically designs are said to be mechanical or non-mechanical.

Mechanical designs include items such as conveyors, sortation systems and automated materials handling while non-mechanical designs are a more manual process involving the use of powered equipment to move product around the DC.

You can expect a mechanical design to cost significantly more to set-up, a complex mech solution can cost many millions of dollars more than a non-mech solution, the investment being justified by lower operating costs over the life-time of the operation.

In addition to your materials handling solution, the size or “footprint” of your distribution centre will also be driven by: how much product storage you require; how accessible you want the product to be; and by how you choose to store your product.

The amount of product stored can be all over the map, I’ve worked with companies who have no more than 1 day of inventory in their DCs to companies at the other end of the spectrum who average 100 days of inventory on hand. These companies had different businesses of course and can’t be compared to each other and judged as “good” or “bad”.

How accessible do you need some of your inventory to be? If you require items to be constantly accessible they will take up more space then items which don’t need to be regularly accessed. Pick locations fall into this category, they contain items which you want your staff to have consistent access to.

How large a footprint these storage and pick locations use depends on how much product you choose to put into each location and whether you put the locations on the floor or make use of the building cube and some of them in the air, in pallet racking and pick towers for example.

There is a further “design” we talk about, that’s the design of the site your DC will sit on, taken together, ¬†your site and building design will tell you how much land you will need to purchase.

Site design elements include space (land) for: site entries and gatehouses; roadways; truck & trailer parking; vehicle maintenance and washing; external storage areas; employee access and parking; and, perhaps, room for future expansion of the building.

The city or municipality will ask you to provide land for items such as storm water drainage and storage, landscaping and berms to reduce noise pollution.

Once you have your outline designs finalised you will be ready to start the process of acquiring land and building your new distribution centre.

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