This section examines current trends within today’s supply chain and how these are likely to affect warehouse operations.
The e-commerce phenomenon will continue to grow both for business-to-business (B2B) and business-to- consumer (B2C) sectors. From a convenience point of view and under greater environmental pressure, grocery home shopping and delivery will also grow significantly.
This will necessitate more fulfilment centres and returns processing facilities.
Retailers and manufacturers will continue to look for further cost savings as markets become even more competitive. Warehouses will be expected to be more efficient and cost-effective, with the likely closure of inflexible buildings and inefficient operations.
Retailers will continue to take stock out of the supply chain, leading to increases in stockless depots, transhipment and consolidation centres and cross-dock operations.
The cost of transport and stock-reduction targets could potentially bring manufacturing closer to the consumer. Eastern Europe has recently become a centre for manufacturing within automotive and electronics and nearshoring is becoming a distinct possibility with US and European companies bringing some production back to their shores.
The increase in port-centric logistics has resulted in companies building large warehouses as close to the ports of entry as possible. As mentioned, Tesco’s 1.2 million square foot warehouse at Teesport, UK is a typical example.
The miniaturization of products such as mobile phones, DVD players and computers, together with the increasing use of electronic media for listening to music and reading books via downloads, is likely to result in less space required for these types of products but greater security.
The sustainability agenda will also play its part within the supply chain. This will result in the development of further brownfield sites, linkages to rail and potentially canal and river networks, and self-sufficiency in terms of energy use.
Future warehouses will be expected to be carbon positive, which will be backed up by legislation in the future. UK retailer John Lewis built a new distribution centre in the United Kingdom with a view to significantly reducing its carbon footprint. Early results showed savings of 18 per cent in energy costs, 45 per cent in water usage, an overall reduction of 40 per cent in CO2 emissions and a cost saving of circa £250,000 per annum.
It is expected that new warehouses will be targeted with having their own means of power generation, be it solar or wind, and may also convert waste into power. Greater collaboration within the supply chain both vertically and horizontally will lead to greater consolidation and an increase in shared-user operations. This is likely to lead to a reduction in the number of smaller warehouses and the construction of purpose-built centres.
The ability for companies to work closely with each other and trust each other will be a major factor as to how quickly this collaboration takes place.
