Companies are re-thinking their go-to-market strategies and, as a result, making different choices about how they locate, design and operate their distribution networks. This has created a new landscape for supply chain real estate, according to a report published today by DHL, the world’s leading logistics company, discusses the new landscape of supply chain real estate. Global and regional supply chains are changing, as they adapt to the new realities of commerce and competition.
The New Landscape of Supply Chain Real Estate is a report by Lisa Harrington, President of the lharrington group LLC, prepared in collaboration with DHL. Harrington is also Senior Research Fellow at the Robert H. Smith School of Business, University of Maryland.
The report states that while a healthier global economy fuels the demand for supply chain real estate, it is not the only driver. Four other forces are at work, and they are having a transformational effect on companies’ distribution centre (DC) networks. They include:
• The e-commerce revolution
• Globalization and right-shoring
• Mergers and acquisitions
• Technology innovation
In this landscape of change, the job of managing network real estate is a lot more complex. For this reason, interviewees taking part in this research report, increasingly turn to outside experts for help. These experts come in several forms, including network design consultants, real estate brokers and 3PLs.
“The face of global supply chain networks is changing,“ says Harrington, author of the DHL report. “Gone are the days of operating a static real estate portfolio and tweaking it every five to seven years. Business is too dynamic and the stakes are too high.
“The fact is,” Harrington continues, “the way companies manage their supply chain real estate portfolios has morphed from a tactical/operational concern to a strategic differentiator. Supply chains that operate more nimbly and at lower cost don’t just save money. They drive growth.”
“Today, the global supply chain is in a constant state of flux,” adds Matthew Whittaker, DHL‘s Business Development Director, Corporate Real Estate, EMEA. “Ecommerce, consumer behaviour and expectations, ever changing geographies of both manufacturing and points of consumption are all causing operators to evaluate their network strategies. Maintaining a distribution network that enables strategic growth, while also meeting overall financial objectives requires robust real estate strategy and implementation. On the investment side, it requires the landlord to understand the true value of the business behind the rent.”
As the companies interviewed for this research indicate, partnering with an integrated 3PL, one that is expert in both operations management and real estate, can provide a seamless and powerful solution.