Distribution Center Site Selection (Part II)
Author: Brad Struck, SIOR
In Part I we discussed ways to identify the best specific locations within a MSA. Labor data analysis and local interviews were key components in ensuring an optimal location.Once a site is selected, the battle for warehouse labor has just begun. The site selection for your facility may have been very thorough, but your company may still face labor challenges if large distribution centers are built nearby afterwards (difficult to predict). The pressure is even more apparent during the holidays when consumer-driven companies are faced with peak orders and a significant increase in staff. Over the years, we have witnessed best practices from companies that address issues regarding recruiting and retaining employees. Below are some of the strategies that companies are using to create an optimal work force:
Technology which makes the tasks easier for the employees
In certain distribution environments the pace to fill orders is very demanding. With this high velocity comes mistakes and many employees are very prideful of their quality of work. If a company can provide technology tools such as pick-to-light, employees feel less pressure and are happier. Basically, the company is making it easier for the employee to succeed and meet their goals
A winning culture and engineered labor standards
We have seen companies engage consultants to develop engineered labor standards. The standards plus tracking production become very motivating for employees. Furthermore, some companies utilize large TV screens to track performance which can create competition between employees to excel.
Discounts on products for employees
Consumer product companies have been known to offer discounts on their products. This is an effective perk during the holiday peak season where workers can earn extra income and discounts for potential Christmas or other gifts.
In warmer climates working in an air-conditioned environment can be extra motivation to apply or to remain if hired. Sometimes employees will work for less wage to work in a comfortable environment. One very large retailer is installing HVAC in the warehouses of their entire DC network (10+ facilities) to help attract and retain labor
ESRP’s industrial team has successfully led several corporations through the site selection process while analyzing the total cost of occupancy. Our team of industrial brokers align with our Site Selection team to ensure extensive data and analysis is provided, allowing our clients to make informed decisions that ultimately positively impact the firm’s finances, operations, and culture.