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Companies are re-thinking their go-to-market strategies and, as a result, making different choices about how they locate, design and operate their distribution networks.

This has created a new landscape for supply chain real estate, according to a report published by DHL. Global and regional supply chains are changing, as they adapt to the new realities of commerce and competition.

The findings are part of The New Landscape of Supply Chain Real Estate report, which has been authored by Lisa Harrington, President of the lharrington group LLC, in collaboration with DHL.

The report states that while a healthier global economy fuels the demand for supply chain real estate, it is not the only driver.

Four other forces are at work, and they are having a transformational effect on companies’ distribution center networks.

They include:

The e-commerce revolution

Globalization and right-shoring

Mergers and acquisitions

Technology innovation

“The face of global supply chain networks is changing,” said Harrington, author of the report.

“Gone are the days of operating a static real estate portfolio and tweaking it every five to seven years. Business is too dynamic and the stakes are too high.

“The fact is, the way companies manage their supply chain real estate portfolios has morphed from a tactical/operational concern to a strategic differentiator. Supply chains that operate more nimbly and at lower cost don’t just save money. They drive growth.”

Read more at New DHL report reviews supply chain real estate

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Having an effective supply chain has always been key to retail success. Whether you call it micro-merchandising or the customer-centric supply chain, the challenge has traditionally been to quickly identify trends or activity in a store that is outperforming the norm, and rapidly roll this out to all stores with similar attributes and customer behaviours. Indeed, much of the ‘flair’ that separated well- from poorly performing retail operators was down to the ability of some key individuals to spot trends, clusters and patterns that drove better understanding of customer behaviour, and act upon these insights to deliver to customers’ demands.

This macro-level insight is, however, no longer good enough. Today, retailers need to be able to understand not only how items are performing across the entire retail estate as well as within individual stores and spot trends and patterns accordingly; they also need to be able to marry this micro-level performance to geographic and demographic information to reflect the demand from a particular store’s customers. And, they need to be able to forecast how those same items will be performing in weeks and months to come.

This is the capability that is required to truly deliver today’s customer-centric supply chain. But it demands a level of detail simply too difficult for humans to manage. Software solutions are designed to raise the average performance level by helping the poor or below average operators benefit from the expertise of the higher performers and placing this supporting technology in the hands of those key individuals who would act as district or regional manager.

But the needs of today’s customer-centric supply chain have outpaced even the majority of these solutions.

Read more Technology’s Role in Managing the Evolution of the Customer Centric Supply Chain

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