DC Velocity - February 2015

BY JOHN H. “JACK” BOYD

WAREHOUSING

PICKING A LOCATION FOR A WAREHOUSE OR DISTRIbution center (DC) is not a decision to be taken lightly. If a company makes the wrong choice, it will mean increased supply chain costs and inefficiencies for years to come. To avoid this mistake, companies need to be aware of the macro trends brewing on the horizon that could affect a warehouse’s future costs or efficiency level.

During our firm’s site selection engagements, we consult with a wide range of corporate managers who have input into the many quantitative and qualitative factors that go into location decisions for a new DC or warehousing operation. These include managers in traffic, facilities, finance, logistics, information technology, human resources, legal, engineering, telecommunications, manufacturing, and community relations, among others. It’s an eclectic group, and so are the topics of our conversations. Here are the five trends these managers are talking about most in their meetings with us.

1. PRIVATIZATION AND TOLLS

Privatization of highways and bridges is a hot topic now for many of our distribution center clients. In the past, most highway and bridge infrastructure projects were funded by revenues from the gas tax. However, these revenues have been declining for years amid a cutback in driving, a shift to more fuel-efficient cars, and slumping auto sales. Privatization is being pushed by the Obama administration as a way to fund more highway and bridge infrastructure projects without raising fuel taxes. The likely result will be more toll roads, including portions of our interstate highway network.

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Taking these five macro trends into account in your warehouse and DC siting decisions will help you reduce supply chain costs and inefficiencies for years to come.

This story first appeared in the Special Issue 2014 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. Readers can obtain a subscription by joining the Council of Supply Chain Management Professionals (whose membership dues include the Quarterly’s subscription fee). Subscriptions are also available to nonmembers for $34.95 (digital) or $89 a year (print). For more information, visit www.SupplyChainQuarterly.com.