In tech culture, “disruption” is a big buzzword. While sometimes the term gets loosely bandied about, in the case of e-commerce’s impact on warehousing, it’s no exaggeration.
When people think about the change that e-commerce has brought to consumers, they typically think about the “front-end.” Unlike before, consumers no longer have to leave their homes to buy anything. The time it takes to have those goods delivered is also increasingly getting shorter.
The other side of this equation is the “back-end”—the warehouses that pack and ship products to consumers.
Traditionally, when people shopped at brick-and-mortar stores, retailers would source their products from a warehouse. Of course, a central tenet of operational efficiency is economies of scale, so warehouses generally were very large—often in the hundreds of thousands of square feet—and one warehouse could service the needs of many stores.
Stores themselves, meanwhile, had inventory on hand, so orders were done in a pre-planned way—and with some regularity. This model was a variation of the classic hub-and-spoke model, even if the hub was not located in the center.
Then, e-commerce came along, where any consumer could, with a single click, purchase anything. It added a powerful proposition to the transaction of commerce—the entire country (or even the world) was now a retailer’s total addressable market. Still, it also meant retailers had to be able to get customers their orders.
“If a consumer ordered something and it showed up in five to seven days it was good service,” said Chris Zubel, senior managing director of real estate and research at CBRE. “But now they are demanding that same item the next day or even the same day in certain locations.”
Transforming warehouses
If next day or same-day delivery is now the standard, proximity to the customer is paramount.
This expectation has led to a huge shortage of facilities that can efficiently process and ship massive amounts of merchandise. In the late 1990s, warehouses were much further up the supply chain. They were a place for taking product from the shipping or rail yard and getting it to stores, which then sold it to consumers.
Under this model, stores ordered product in advance, with no cadence to the process. Warehouses were often simple structures that relied on forklifts to retrieve goods that were stored on pallets until they were shipped to a store.
This model is less relevant today, according to Daren Sealover, a project executive at Graycor Construction, which specializes in distribution centers, cold storage warehouses and manufacturing facilities. “Gone are the days of stacking the product on the floor and moving it via forklifts,” Sealover said.
As a result, the size of warehouse projects have ballooned as these facilities have evolved into high-tech, automated processing centers.
The footprint of some centers has doubled or even tripled through the addition of mezzanine levels, which can push some projects to the 3 million-square-foot mark and beyond.
While many industry observers predicted that automation would cut down on the need for labor in warehouses, the opposite has happened.
Before, warehouses employed few people, primarily to pull pallets off of racks on a forklift. Now, because retailers are boxing everything individually, hundreds or even thousands of people are brought in to pack items before they ship.
BIM to the rescue
This makes finding the right location for a warehouse a three-part challenge: proximity to customers; availability of transportation infrastructure; and proximity to talent.
Construction of such complex distribution centers isn’t easy. Owners need exact timelines to plan work so that the critical parts of a facility—electricity, plumbing, HVAC—can be delivered first.
What’s more, super-sized warehouse facilities need strong envelopes and infrastructure to hold and run their massive machines, racks and mezzanines that they are equipped with; to accommodate such heft, construction firms are beefing up floors, walls and roofs.
This is often where BIM comes into play. Advances in BIM have made it possible to create accurate 3D layouts containing fully intelligent systems that can incorporate voltage, air flows, weights, sizes, etc. A timeline animation can be created that shows construction of a building over a period of time based on an imported or created schedule.
Having a model that is accessible to the many service providers and professionals that come together during construction helps all parties detect and avoid clashes, greatly reducing the need to redesign and amend systems and their components.
E-commerce has changed the customer experience—and there’s no going back. BIM has helped the industry get there.
Next time you order anything online and the items arrive the next day, thank the advances in construction tech that have made this miracle of delivery possible.
