From bricks to clicks - how to build an online retail distribution hub
When retail companies make the jump from bricks and mortar high-street shops into online sales, one of the first major hurdles is establishing a distribution centre to allow them to receive, pick and fulfill orders. Mace's Jeremy Davey outlines five tips that you need to remember when selecting, designing and building your online delivery hub.
As the UK becomes an increasingly digital society, sustainable and resilient distribution networks are key to ensuring we can keep growing. UK businesses need to move quickly to develop innovative approaches to solve complex industrial connectivity issues.
Mace is already at the forefront of this effort. To date, we’ve partnered with a number of national and international retailers to create their delivery infrastructure and support them as they take their first steps into online distribution.
Along the way we’ve worked out the five key factors that our clients should look out for as they locate, design and build their distribution centres.
1. Location, location, location
The first concern will always be location. This doesn’t simply mean making sure that you’re close to major freight links – it also means taking into account how the people that operate the site will get to and from work every day, whether the local community will have anxieties about the site’s new use, and understanding how your suppliers and delivery partners’ needs and challenges can meet your own.
Inevitably, the best site is often one that is remote but well connected – which may seem like a bit of a contradiction. Often these locations are ex-heavy industrial sites that come with contaminated ground, complex planning and safety pre-conditions that need to be met before development can begin.
2. Designing your hub
Once you’ve picked a site, you need to design your facility and how it will operate. You’ll need to take account of a huge range of factors; including statutory planning considerations, the requirement for on-site vehicle fuel and maintenance facilities, staff welfare needs and parking, as well as what equipment and processes you’ll actually use to manage stock and delivery vehicles.
The equipment decisions you make at this stage will directly inform the technical requirements that your site will have to meet. If you’re storing food you’ll need to take account of how you’ll keep it cold and how your staff will keep themselves warm. You’ll need to plan your power supplies and contingency procedures – any loss of power risks will risk spoiling huge quantities of stock.
Security should be a key consideration as well – with such a high concentration of stock on site appropriate access controls will be vital. Any automated systems will almost certainly need to be ‘designed in’ to the project at an early stage to ensure that the whole site is effectively integrated.
3. Future proofing
Strategically, you’ll also want to make sure that you’re future proofing every stage of the project. Your business plan should tell you how fast to expect your online operation to expand – but have you modelled what that means for the staff who pick your orders, the amount of road traffic you generate and the complexity of vehicle movements in your yard?
That future-proofing message also applies to the model of procuring and operating the distribution centre itself. When you move to introduce your second distribution centre, it should be a case of rolling out an existing process – as long as you’ve been thorough the first time around.
4. Your supply chain
To make this work, you’re going to have to up-skill your supply chain. The more complex a delivery operation becomes, the more it relies on disciplined suppliers following strong processes – and you need to take them on that journey in partnership.
Finally, you need to look at the sustainability aspects of your projects. Big distribution centres are great opportunities to introduce large-scale solar installations to minimise carbon use – but they also throw up challenges around the sustainable procurement of supplies like coolant gasses and the disposal of vast quantities of commercial waste.
Across the world, Mace has helped to create supply chains and centres that deliver food and other products to millions of customers. What we’ve learnt along the way is that you can’t build such a complex system in isolation – like most things in life it works better when supported by strong collaborative working.