Anything That Needs a Roof

Jun 01, 2003 9:30 PM  By

“WAREHOUSE FOR LEASE. Offers cooking, laundry, and babysitting services.”

No, that ad hasn’t run (yet), but the day when it might may not be too far off. Today’s distribution and fulfillment centers do just about “anything that needs a roof,” says Arnold Maltz, a professor of logistics at Arizona State University. At the Warehousing Education and Research Council’s annual conference in April, Maltz unveiled the results of his recent study on how warehousing has evolved in the past few years. The most striking change is that as the supply chain becomes more complex and customers more demanding, warehouses are being asked to do everything from quality checks to shelf-ready item production to light manufacturing.

One reason for this, Maltz said, is that DCs continue to be cost-effective: “In most cases, warehousing is still the cheapest place to do some things in the supply chain.” Warehousing’s basic contributions — location, labor, and knowledge — haven’t changed much in the last five years, Maltz said. Labor averages about $8 an hour, but vast differences exist in wages and working conditions between manufacturing and warehouse labor. Despite rapid consolidation both within the warehousing industry and geographically, customers continue to prefer regional warehouses. Many warehouse systems still turn in poor performance, and collaboration — long touted as a cure-all — remains stifled by lack of communication.

The evolution of warehousing is similar at direct-commerce fulfillment operations, Maltz told O+F. “These trends are applicable to direct-to-customer businesses,” he said. “The real question is whether DTC is the same as B2B. There is some difference in the processes, but many DTCs are doing B2B already. People with common skills can be leveraged across both kinds of operations. Shipping and manifesting are different in DTC, but then, some service parts providers are shipping by UPS. There’s lots of transferable stuff there.”