3 Demands Driving Distribution Center Design

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By: AJ Magner, Managing Director at JLL & Joe Messina, Senior Vice President at JLL

Parts of Ohio, Michigan and Pennsylvania are home to major distribution centers, including Procter & Gamble, Eddie Bauer, lululemon athletica and, tentatively, Amazon.com. Thanks to accessible highways, an inventory of economical land opportunities and the historically low-cost labor markets, the region houses prime real estate for warehouse facilities.

Distribution centers are the backbone of retail industry operations. They are at the core of all product management, inventory, storage and shipment.

According to JLL’s researchers, recent advancements and trends have influenced layout designs of warehouse facilities to change. Stay ahead of the game, and ensure your warehouse operations are up-to-speed by investigating the top demands driving design concepts for distribution centers.

Top Demands Driving Distribution Center Design

Demand 1: Sustainability Keeps Costs Down 

To account for inherent transportation costs, and also balance out the escalating prices of fuel costs and wages, energy efficiency has moved to the forefront of design. Skylights, LED lighting, daylight harvesting and solar panel installations help to conserve energy and cut costs, requiring less electricity to illuminate the facility. 

Demand 2: Sky-High Ceilings 

Modern Warehouse

Photo: Courtesy of Axisadman, Wikimedia Commons

As demand for distribution continues its upward climb (thanks to ecommerce), many are also looking for ways to maximize use of their current space. Companies are expanding distribution centers to fit more products, and boost productivity.

But with new material handling equipment and automated warehouse technology, users can now decrease construction costs and increase layout efficiency by building up. In recent years, distribution center heights have grown from an average of 28-feet-tall to roughly 36-feet-tall, providing more space for additional racking and increasing product capacity.

Demand 3: Hospitality Attracts Talent 

With today’s continuous technological advancements and push to deliver instantaneous service, the number of qualified employees has decreased significantly. Companies looking to recruit and retain a high-caliber employee base should keep employees top of mind while designing a facility.

Employers are seeking distribution centers that are equipped with specific amenities, such as air conditioned warehouse, state of the art dock equipment and increased safety elements to make sure their valued employees continue to be long term assets. To attract tech savvy millennials, companies are also increasingly designing industrial workspaces to include fitness centers and social lounges to enhance the work environment and personal health of their employees.

As demand grows, design and operation of distribution centers will continue to evolve. One innovative example: “Amazon does not store physical items by what they are, but rather by where in the warehouse they can best fit to minimize wasted shelf space.”

By simply calculating dimensions and shifting placement of items, Amazon doubled the amount of storage space in its existing facility.

Whether companies opt to build new centers to accommodate their operations or renovate existing warehouses, the growing preference for streamlined automation, sustainable operation practices and efficient space utilization will continue to dictate the design of these buildings.

Download JLL’s Perspectives on Distribution Center Design for more on new demands driving modern design.

Distribution-Design_JLL
Interested in receiving more information about making strategic commercial real estate decisions? Contact us for more information at spaces@am.jll.com.

About the Authors

AJ MagnerAJ Magner is Executive Vice President located in Jones Lang LaSalle’s Cleveland office. AJ oversees corporate account teams and relationships. He works with both corporate and non-profit clients, nationally and internationally.  View AJ Magner’s bio or connect with him on LinkedIn

Joe MessinaAs a key Industrial real estate services expert of JLL’s Cleveland office, Joe provides commercial real estate tenant representation, consulting and transaction services to clients in the Great Lakes Region and around the world.  View Joe’s full bio to read up on his experience and recent transactions, or connect with him on LinkedIn.