I think it is clear that in general, in the past few years more companies have been having buildings built specifically for their needs, rather than finding a “spec” building from a developer that is available in a given market.

The primary reason for the growing demand for build-to-suit distribution centers is in the difference between older and newer warehouse property design. When you think about it, it’s not such a stretch to say that today a distribution center is less a home for product and more a place to house material handling systems.  Therefore, it is reasonable to expect that the “science” of material handling would, and is, driving changes in distribution facility design.

Given the magnitude and long term implications of such a decision, most companies specify and build their own distribution facilities only when nothing existing in the desired location fits or can easily adapt to their needs. What they are finding is that the “Spec” buildings are not suited to the clear heights needed to take full advantage of the higher and higher racking and lift truck technologies. For example, rack heights above 30 feet (over 6 pallet loads high) with narrow or vary-narrow aisle configurations, require super-flat floors with high load-bearing capabilities, which are not commonly found in spec buildings. Also, the conventional column spacing of spec buildings usually does not suit the company’s ideal rack layout.  You can find more info on build-to-suit design from the SCDigest article Designing Your Distribution Center from the Inside Out.

Companies are adding distribution space that is designed to take full advantage of material handling system automation to control costs and improve the efficiency of their operations.  Equally important to this emerging need for build-to-suit facilities are corporate marketing goals. Businesses usually employ one of two general marketing strategies, each requiring a different facility design and logistical approach.

For instance, one company may sell commodity products and compete by keeping prices as low as possible, while another may market the values of speed, service, and customization at a higher price point.

Companies that market price-sensitive product, are more inclined to consolidate distribution operations into fewer, larger facilities. The thinking is that bigger DCs and fewer locations make for cost efficiencies. However, there is also a growing appetite for smaller build-to-suit DCs driven by companies that want supply chains with many locations to provide customized services. A current example is Performance Food Group (PFG), with 18 DCs under 200,000 square feet.  For PFG, storing product in a warehouse for any length of time creates unacceptable inventory costs and delays in customer service.

“Just So” Spec DCs

To meet this growing trend, developers are now beginning to put up speculative buildings that are more suited to taking advantage of material handling system technology. They are obtaining permits to construct spec building with clear heights of 36 feet in some areas and 41 feet in others. Many of these have receiving and shipping docks on the same wall with column setbacks of 60 to 70 feet. In major distribution markets, some developers feel comfortable building on spec up to about 450,000 sq. ft. So if you don’t need something just so just now, it is increasingly likelihood a building built on spec that is close to your needs may become available.

However, remember that even if the size, overall layout and clear height are acceptable, there are other factors that may present limitations in an existing/spec building that will limit your options. These include roof support for adding material handling systems, and having super flat floors where needed to support very narrow aisle lift trucks (though technology is now available to make existing floors super flat).

If you own a Warehouse/DC and the major problem is insufficient cubic storage space do to the building’s low clear height – then perhaps you should consider “raising the roof.”

There are just a few companies, such as RoofLifters out of Canada, that will do it for you. (The company told us at ProMat that it has one competitor in New Jersey.)

With the roof lifting approach, you may be able to go from 3-pallet high storage to 6 pallets high, and at the same time utilize narrow aisle or very narrow aisle pallet rack storage configurations.  Some of potential advantages of lifting the existing roof are:

• Cost effective alternative to relocating and building a new facility
• Increase storage cube capacity within the same footprint
• Minimizes disruption and downtime to ongoing business operations
• Very fast turnaround time when compared to designing and construction a new building
• With this approach all equipment that is mounted on the roof (vents, air-conditioners, etc.) and/or hanging from the roof steel (lights, fans, etc.) will be lifted with the roof

Of course, a variation of this approach would be to replace the existing roof with a new roof at the higher elevation. This might be the way to go if the existing roof is defective and beyond repair.

In the search for the “ideal” DC, it is obvious that there are a lot more building options and alternatives to consider than ever before.

Agree or disgree with Holste's perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the website. Upon request, comments will be posted with the respondent's name or company withheld.