A Distribution Center (‘DC’) is a storage facility that is smaller in dimensions than a conventional warehouse. A Distribution Center DC is used for receiving, temporarily storing and redistributing goods in accordance with customers’ orders as they are placed. Distribution Center DCs have become a crucial part of the supply chain for any organization these days.
The Rise of the Supply Chain as a Growth Engine
Just a few years ago, companies with massive distribution centers and same-day delivery were considered exceptional. Today, that’s no longer enough. The supply chain has evolved from a back-end function to a competitive advantage, and businesses are scrambling to keep up.
The Shift from Cost Center to Growth Driver
Supply chains are undergoing massive transformation, fueled by technology that seamlessly connects online purchasing with offline order fulfillment. This evolution has enabled companies to operate globally at greater speed and flexibility, meeting rising customer expectations with ease.
According to Karl Siebrecht, CEO of Flexe, “Supply chains were once seen as cost centers. Amazon changed that by turning them into assets for growth.”
The Evolution of Warehousing in Modern Retail
Warehousing: The New Competitive Advantage
Distribution centers (DCs) and warehouse storage have become highly sought-after business assets. In 2015 alone, warehouse rental rates across the U.S. jumped by an average of 9.9%, sparking a speculative building boom in many cities.
Ryan Bain, VP at CBRE Group, noted that Chicago developers saw more speculative warehouse projects than they had in the previous 20 years.
How One Company Raised the Bar?
The skyrocketing demand for distribution space is largely a response to one dominant player—Amazon. Through a vast network of strategically located DCs, Amazon has set the benchmark for order fulfillment speed. Customers now expect rapid delivery as the norm.
As a result, traditional retailers are pivoting to eCommerce and investing in direct-to-consumer logistics just to stay relevant.
Dallas Leads the Way
Dallas is a key location for warehouse development, offering access to the fourth-largest metropolitan area in the U.S. More than 14 million square feet of warehouse space is currently under construction, reinforcing the city’s importance as a distribution hub.
Changes in design
Given the spike in demand and the finite amount of space that exists, distribution centers have witnessed a radical change in their design. Ceilings would reach a maximum height of not more than 24 feet. Going further back, warehouses would only be located near ports or railroad terminals.
These days, there are distribution centers being built that have a clearance for a 40-foot ceiling height. Some Distribution Center DC )s have approximately 2,000 parking spaces to accommodate the workforce employed by the center. Moreover, Distribution Center DCs are now being built close to population centers to facilitate faster order delivery.
