Resources, Whitepapers

How innovation can save tenants millions of dollars per annum in reduced leasing costs

Peter Jones - Founder and Managing Director Prological

Leading supply chain consultancy Prological has released a new whitepaper on the changes in the industrial property landscape and its future-focussed ‘next generation’ approach to facility design and development.

The white paper ‘Rethinking warehouse design: Integrating innovation, from concept to delivery’ discusses the pressures of the industrial property market, as well as the limitations of traditional approaches to new warehouse and freight depot development.

From working with Australia and New Zealand’s largest organisations, the Prological team share their innovative approach towards developing greenfield sites, and how this new way of thinking can reduce tenant costs and expand developer return on their assets while bringing relief to the constrained property market in Australia and New Zealand’s larger cities.

Innovations in warehousing for the food and beverage industry

In the competitive world of food and beverage, innovation has the ability to make or break a retailer’s success. To ease labour, transport and procurement pressures, we are now seeing innovative combinations of technology making warehouses bustling centres of efficiency and productivity.

In a move toward ‘hyper-local’ warehousing, many Australian distribution centres now use automated systems to place popular SKUs near ‘partner’ products.

For example, Coles’ automated, multi-temperature customer fulfilment centres in Melbourne and Sydney use AI, custom algorithms and machine learning to predict items that are most likely to be purchased together – some of which are quite surprising. By knowing that a customer who purchases walnuts is more likely than not to also purchase frozen raspberries, the warehouse is able to be configured to decrease both picking time and holding costs.

Along with warehouse automation systems and third-party technology, labour management software is also becoming increasingly popular. ‘Pick-by-voice’ technology, whereby workers wear headsets which have a two-way flow of information, advises staff which task to complete next, leaving no room for confusion. As the workers complete each pick, a small bar code reader wrapped around their finger scans each item and records their productivity. This significantly improves inventory management and accurate timely restocking.

As well as investing in smart warehousing systems and automation, Coles is also making extensive use of app-driven gig workers for grocery picking and delivery via platforms such as Uber and Airtasker, meaning the space requirement for large trucks at distribution centres decreases as well.

With smart warehouse design, distribution centres can ensure every inch of space is optimised, meaning operations can scale up by simply rethinking a fit out.

New ways of building a food and beverage facility

Until now, the most common process for food and beverage site development begins with estimating the footprint of the facility, choosing an adequate size property site, with consideration of the internal workflows and fit-out last.

However, with the rapid pace of innovation, scarcity of available land and the proliferation of agile automation, this approach is no longer optimal. Indeed, it has always been flawed, but now the consequences of this flawed approach are more profound. Today, traditional facilities are no longer fit for purpose and rents are driving costs in the wrong direction, while innovative architecture and engineering are introduced too late in the current development process, if they are introduced at all.

For the team at Prological, the opportunity to innovate was clear. What if the fit-out and detailed workflows were designed first, and the building was designed next, both before the land was even looked at? What if automation and its infrastructure requirements were considered early and designed as an integrated component of the building? What might it mean to build vertically, not just horizontally?

Next generation answers to these critical questions result in reduced land requirements, reduced building costs and in turn, reduced rents.

Prological’s mantra is ‘Sign-off on nothing until you have completed the design of everything’.

With this fresh way of thinking, Prological has uncovered several additional operational and personnel benefits for early adopters of this ‘next generation’ facility design including:

  1. Increased sustainability through warehouse positioning, thermal efficiency, reducing heat footprint and leveraging natural sunlight, of course with solar power, but that is just the start
  2. Improving customer experience with faster, more accurate delivery times
  3. Attracting, retaining, and optimising staff through human centric design
  4. Reduced travel time by optimising production and work zones from the outset (50-60% of traditional warehouse staffing costs)
  5. Becoming known for innovation by shareholders, employees, and customers alike

The whitepaper examines how a commitment to innovation from the outset can produce significant benefits for customers who are faced with increasing market pressures.

Furthermore, its practical recommendations show where to begin and what to consider, based on Prological’s proven expertise in this evolving field.

To view the white paper in full, click here.

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