Optimizing Your Distribution and Warehouse Assets
Optimizing Your Distribution and Warehouse Operations in a Dynamic Landscape
Need a Framework for Operating Your Distribution & Warehouse Facilities?
Need a Framework for Operating Your Distribution & Warehouse Facilities?
In the dynamic and rapidly evolving world of warehousing, logistics, and distribution, owners and occupiers need agile solutions to keep pace with sudden global demand swings and accelerating technological advancements. With surges in ecommerce growth, the demand for warehouses and distribution facilities has seen a significant increase in recent years. Highly automated fulfilment centers are now adopting lean factory thinking and practices, marking a shift in industry norms. The landscape of industrial and logistics companies is in flux, making it more crucial than ever for corporate real estate leaders to adopt an integrated approach to their real estate portfolios. A strategic real estate approach is vital for navigating these changes and opportunities.
An Integrated Strategy Includes These Components:
- Technology-Led Facilities Operations
Effective facilities management fosters a conducive environment for innovation and technological adoption, enabling the smooth integrated of automation and advanced systems. It drives cost-effective maintenance practices, preserving the longevity and performance of critical assets. Incorporating technology-led solutions allows warehouse and distribution facilities to stay competitive, adapt to changing market demands, and achieve operational excellence.
- Project and Program Management
Integrated project and program management is crucial for warehouse and distribution facilities. By aligning upfront strategy, budget planning, construction implementation, and physical move management, it ensures cost efficiency, risk mitigation, timely delivery, quality assurance, and strategic alignment. These benefits optimize resource allocation, reduce risks, and enhance facility value, supporting operational excellence and competitiveness. It’s also crucial aspect of capital planning, giving organizations the foresight to deploy capital most effectively. This comprehensive approach enhances the overall efficiency and profitability of warehouse operations.
- Lifecycle Asset Management
Monitoring performance across the asset lifecycle is key for ensuring the entire facility is operating at peak efficiency, which can help reduce costs and optimize both asset utilization and resource allocation. In tracking the lifespan of assets, business leaders can make more informed decisions about when to retire or replace equipment, avoiding unexpected failures to safeguard against potential downtime.
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Explore all key strategy components, success metrics and common pitfalls.
Explore all key strategy components, success metrics and common pitfalls.
Gaining a Holistic View of Your Portfolio Requires Measuring Performance
Need a Framework for Operating Your Distribution & Warehouse Facilities?
Need a Framework for Operating Your Distribution & Warehouse Facilities?
Navigating distribution and warehouse operations can be complex, and success hinges on precise measurement and strategic optimization. We’ve identified key success metrics that serve as navigational beacons for operators striving for peak efficiency and productivity, and provide critical perspectives on resource allocation and operational performance. By employing these metrics as guiding principles, warehouse and distribution facilities can unlock new levels of efficiency, ensuring they not only meet but exceed industry standards, ultimately leading to sustained growth and profitability.
Key Success Metrics for Your Distribution and Warehouse Facilities
- Utilization of Labor, Space, and Material Handling Equipment
Tracking labor, space and equipment utilization allows operators to easily identify areas of improvement to optimize workflows and resource usage, driving smoother operations and higher levels of productivity. Efficient utilization directly impacts the bottom line, but ensuring these resources are used effectively, warehouse and distribution facilities can reduce operational costs. This includes minimizing overtime expenses, making the most of available space, and extending the lifespan of equipment through proper usage.
- Inventory Accuracy
Inventory accuracy is a crucial metric in warehouse and distribution facilities – inaccuracies can cause sharp costs increases and damage supplier or customer relationships. Accurate inventory levels are also key for driving supply chain efficiency, as maintaining optimal stock levels prevents overstock or stockouts. To ensure inventory metrics remain accurate, some facilities are leveraging barcoding systems that integrate with their computerized maintenance management system (CMMS). These systems enhance inventory management by establishing a structured approach to handle inventory, supplies and other materials within the facility.
- Maintenance Expenditure
Tracking maintenance expenses creates more effective budgeting and cost control, enabling facilities to allocate resources more efficiently. Understanding maintenance costs provides insights into the lifespan of equipment and infrastructure. This information is essential for making informed decisions about when to repair, refurbish, or replace assets. Measuring maintenance expenditure is also key for preventative maintenance planning, which allows issues to be addressed before they escalate into major costly repairs.
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Explore all key strategy components, success metrics and common pitfalls.
Explore all key strategy components, success metrics and common pitfalls.
Common Operational Risks for Distribution and Warehouse Facilities
Need a Framework for Operating Your Distribution & Warehouse Facilities?
Need a Framework for Operating Your Distribution & Warehouse Facilities?
In the dynamic landscape of distribution and warehouse operations, steering clear of potential pitfalls is essential for sustained success. From prioritizing talent training and upskilling to embracing digital transformation, having insights on how to navigate these areas effectively presents opportunity for growth and optimization. By addressing these challenges head-on, organizations can fortify their operational foundations, ensuring they remain agile, competitive, and posed for success in an ever-evolving industry.
Common Risks and How To Avoid Them
- Neglecting Talent Training and Upskilling
The logistics industry is evolving with the introduction of new technologies such as automation, robotics, and advanced warehouse management systems. Training employees to use these technologies effectively ensures that the facility remains competitive and can take full advantage of modern tools to optimize operations. Many often correlate automation with obsolescence of human labor, when in fact, these technologies require skilled talent to inspect, maintain and calibrate the equipment. With the majority of downtime in the industrial and logistics sector attributed to human error, it is imperative that organizations not only recruit, but properly train, retain and develop their staff to operate successfully. A well-trained workforce can drive efficiency in order picking, inventory management and operating equipment while adhering to safety protocols and compliance standards.
- A Decentralized Corporate Real Estate and Facilities (CRE&F) Organization
Centralizing the CRE&F organization streamlines operations with standardized processes, consistent maintenance protocols, reduced redundancies, and centralized decision-making. By consolidating responsibilities and resources, companies can achieve economies of scale, negotiate better terms on vendor contracts, and implement standardized cost-saving measures. A centralized system provides better visibility into the performance of individual facilities as well as the organization as a whole. While some businesses believe that facilities must be managed at the local or plant level due to challenges that are unique to a specific location or geography, a streamlined partnership between each site and the CRE&F function can unlock significant enterprise value and aid plant managers in achieving financial and operational success.
- Not Including M&A in Your Growth Strategy
Without considering M&A, companies may struggle to expand their geographic footprint and reach new markets efficiently. M&A allows for the acquisition of existing facilities in strategic locations, enabling quicker market penetration and access to a broader customer based. M&A can also lead to economies of scale by consolidating operations and optimizing resource utilization. This can result in cost savings through shared infrastructure, improved logistics, and increased operational efficiency. In the industrial industry, responsiveness to changes in market demands and customer preferences is crucial. M&A can provide the agility needed to quickly adapt to shifts in market dynamics.
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Explore all key strategy components, success metrics and common pitfalls.
Explore all key strategy components, success metrics and common pitfalls.
Operational Excellence with CBRE
Need a Framework for Operating Your Distribution & Warehouse Facilities?
Need a Framework for Operating Your Distribution & Warehouse Facilities?
CBRE understands that each client and each portfolio is unique, and we offer solutions that flex and span based on your organizational goals. Whether supporting a global portfolio or assisting with local client needs, we have the products and services to ensure cost control, operational excellence, stakeholder satisfaction and right-sized solutions.
Realizing Value in Your Portfolio
- Integrated Facilities Management
Our integrated and globally consistent approach to facilities management was developed in tandem with the growth of the world’s largest industrial and logistics companies and powers the performance of portfolios that depend on diverse and sustainable supply chains, connected footprints and efficient operations. We have a strong track record of managing down unit cost while achieving efficiencies in organizational capacity, scaling and acquiring and retaining skilled labor in new or expanded locations. Learn more.
- Project and Program Management
Offering a network of dedicated and variable technical project and program management experts to manage through the entire construction lifecycle, our team serves industrial clients of all sizes. From the upfront strategy, budget and schedule planning, construction implementation and physical move management, our expertise and data-driven insights help you make informed decisions and bring your facilities on line quickly. Our dedicated industrial project managers align our approach to your objectives, controlling risk and identify cost saving opportunities. Our team’s extensive experience includes: build-to-suits, consolidations, building expansions, design-build construction, capital improvements and complex decommissioning projects for manufacturing facilities, warehouses, distribution centers, data centers, refrigerated storage, pharmaceutical, packaging, food and hangar facilities. Learn more.
- Asset Optimization
CBRE provides asset optimization for our clients, including management of the overall current state and health of their material handling equipment. We manage risk pertaining to their material handling equipment and overall supply chain process. CBRE uses frequency-based preventative maintenance, condition-based early-alarm alerts, and failure trend analysis to ensure site level assets are performing at the most optimized state as possible. We strategically plan all activities for our clients around their schedule to further increase optimization of their operating schedule. Continuous monitoring down to the smallest level of risk for our clients ensures that we have no negative impact to their overall supply chain goals.
- Supply Chain and Procurement
Our global supplier network ensures competitive pricing, resilience, and access to best-in-class resources. Our global scale enables strategic partnerships with industry-leading suppliers, driving innovation and creating value for our clients. We continuously evaluate marketing pricing through competitive sourcing events and benchmarking to deliver cost savings. Learn more.
- Energy Management & Sustainability
Energy management represents a major opportunity for industrial assets. Our globally consistent programming in decarbonization solutions, renewable energy and electrical vehicle charging stations can help you achieve your ambitious ESG goals. We help enterprises optimize their energy performance through strategic and turnkey solutions to support carbon reduction and net zero commitments to achieve their sustainability goals. Build a comprehensive roadmap for your sustainability goals, from establishing a baseline of comprehensive energy, emissions, water and waste data to setting targets and developing an actionable plan. Learn more.
- Safety & Compliance
We believe there is nothing more important than the health and safety of our employees, contractors, clients, and those with whom we work. We work diligently to maintain a strong culture of safety to ensure a work environment absent of recognized health and safety hazards across all facilities.
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