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Facility & System Design Question & Answer
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If you had to choose a location for a distribution center for fulfillment of a new e-commerce business, what variables would you have to take into consideration? |
| A |
There are many variables to consider in order to determine the best location for a fulfillment center for a new e-commerce business. Usually the objective is to find a location which provides the least cost operation while maintaining the desired level of customer service. Following are some factors that come to mind:
- Type of e-commerce business: Business-to-Business or Business-to-Consumer or both
- Type of fulfillment: Ship by package delivery services or less-than-truckload shipments or both
- Shippers: Who are the shippers? What is the proximity to the shippers? What is the latest cut time? Is next day delivery expected?
- Market area: Regional? National? International?
- Projected shipping volumes: Is there a five year projection or expansion plan? Is there significant seasonal activity such as Christmas?
- Suppliers: How many suppliers are there? Where are the suppliers located? What volumes per supplier?
- Facility: Is it a single facility or multiple facilities?
- And there are many classic factors such as: Facility availability and cost, operational costs and labor.
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| Q |
How do I identify the best location for my distribution (or manufacturing) operation? |
| A |
A Site Location Analysis can evaluate the advantages and disadvantages of possible sites for you. First, objectives for your move are clearly defined. Then your evaluation criteria for the new location are identified, which may include: cost, travel, distance, public services, company image, code requirements, site/building layout efficiency, flexibility, and tax incentives among others. Your criteria are then applied using a decision-making tool such as Pinnacle's FACDELPHITM analyis. Such an analysis combines the best aspects of cost, value, and risk assessment in the decision process.
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| Q |
If I am considering moving my distribution (or manufacturing) operation, how do I know which buildings will best meet my operational needs? |
| A |
A Preliminary Operational Layout of the buildings, showing placement of your equipment, materials, and operational areas can identify the strengths and weakness of the various buildings for your particular needs. A planning tool, such as Pinnacle's FACMODELTM, can be quickly and inexpensively prepared allowing you to easily consider various "what-if" scenarios for your facility. Such a planning tool involves the whole project team allowing them to quickly reach consensus regarding a building's suitability.
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| Q |
My distribution (manufacturing) business is growing. Can I better use my available space and continue to operate without expanding into more space, or do I need to look at larger facilities? |
| A |
A Facility Planning Review of your operations identifies the best use of your space, and whether you should stay in that existing space or move. In the first phase, data is gathered to identify operational parameters and growth trends. The second phase analyzes and develops several alternative approaches along with costs and benefits. Pinnacle's FACTOOLSTM may be applied to clearly identify the best alternatives. Then a preliminary operational layout of your operation is prepared, showing placement of equipment, materials, and operational areas.
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