This analysis results in facilities that are sized and configured to best maximize the distributor’s opportunity to receive, store and ship a case for the lowest cost.October 12, 2020 Mark Moore
When considering the cost and benefit of building a new distribution facility, the primary focus for many companies is the cost of construction. While this is certainly a major factor, it is not the greatest factor. A look at the pro forma of most, if not all distribution centers, reveals that the two largest cost components of the operation are freight and labor. Freight cost is purely a site selection issue and facility design cannot affect that. However, it can significantly affect warehouse labor costs with intelligent analysis and design.
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