A new report from ProLogis, a leading global provider of distribution facilities, discusses long-term trends in how companies have redesigned and reconfigured both their distribution networks and individual distribution facilities to adapt to changes in the economic environment and reduce overall distribution costs.
"Network consolidations and reconfigurations have been one of the main drivers behind the substantial improvements in supply chain efficiency recorded during the past 15 to 20 years," says Leonard Sahling, first vice president of the ProLogis Research Group. "Companies continue to dedicate considerable resources to analyzing and streamlining their distribution networks, typically reviewing and redesigning them every few years."
Highlights of the report, entitled Network Reconfigurations - Springboard for Supply Chain Efficiency, include the following:
Optimizations to distribution networks have led companies to occupy fewer distribution facilities than they previously used, however, the new facilities are much bigger.
The average size of distribution facilities has more than doubled during the past 15 years - growing from 124,000 square feet in 1994 to approximately 300,000 square feet today.
Higher fuel prices are unlikely to result in major large-scale revisions because many companies have already optimized their networks to accommodate transportation costs.
