When a company considers acquiring a facility, such as a distribution center, it is making a long-term decision. While there are many business specific requirements for housing a company’s warehousing and order fulfillment operations, the most basic decisions relate to increasing storage and throughput capacity.
Holste Says... |
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| Companies looking to take full advantage of the latest advances in material handling technology, especially as it relates to automation, will be better served in a custom building. |
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Industrial park developers built facilities ahead of actual demand resulting in an inventory of general purpose buildings and perhaps creating good opportunities for companies who are looking to make a move. These facilities are designed to accommodate a large variety of warehousing and lite manufacturing operations. For economic reasons the facilities tend to be large scale usually in the 150K to over 250K square foot range. The idea is that a business can sub-lease the space that they do not need initially.
It is common practice for internal building column spacing to be 40 ft. by 40 ft. This column grid pattern favors a conventional selective pallet racking arrangement as well as bulk floor storage with 12 foot wide aisles to accommodate counterbalanced fork lift trucks while at the same time allowing the columns to be buried in the flue space between pallets loads. While this is an effective arrangement for low to medium velocity operations, it is not very efficient for companies with high throughput rates looking to optimize both floor and cubic space.
It’s interesting to note that even though most of these buildings have clear heights of 30 feet or more, conventional fork lift trucks are usually limited to a lifting height of 100 to 110 inches or 3 to 4 pallet loads. When translated into pallet storage positions; 1,000 pallets stacked (4) high will require about 10,500 sq. ft. of floor space. Whereas, with a custom designed building the column grid can be arranged to accommodate narrow-aisle (NA) storage configurations thus optimizing floor space and building cube.
For example: Reach trucks operating in an 8 foot wide aisle, where pallets can be stacked 6 high, the same 1,000 pallets will require only 6,000 sq. ft. of floor space, which equates to a savings of about 40%.
It’s a relativity safe bet that the cost of leasing and operating a custom building, one design for NA operation that requires 40% less storage space and fewer material handling system layout or operational compromises, will be less expensive over time than a general purpose building configuration.
Of course, timing is an important consideration. The time it takes for a company to make a decision on whether to build a custom designed facility, or try to make an existing pre-built building work, may force them into accepting a building that is not optimized for their operation. In order to avoid being forced into compromising, a company should begin its search as soon as possible.
Companies looking to take full advantage of the latest advances in material handling technology, especially as it relates to automation, will be better served in a custom building. But the only way they will know that is to evaluate the operational benefits and costs of having exactly what their business requires over the long haul.
Final Thoughts
No doubt, there are many critical business and operational issues to consider before one can determine the pros and cons of custom designed buildings. The situation will be somewhat different for each company, and therefore the analysis needs to be done on a case-by-case basis. The one constant is that the decision is a long term proposition for the company.
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