Shifts in the Supply Chain

Article from Supply Chain Quarterly

With the recent changes and demands on the supply chain, here are a few key trends that are having an impact on site location and design decisions.

RESHORING AND SAFETY STOCK
The pace of reshoring manufacturing and supply chain operations to the U.S. is expected to pick up to help with safety stock needs and changing consumer demands. 

With this, it is expected that warehouse site selection within the U.S. will become less “port centric” and more oriented to the dynamics of domestic production and consumption. A heightened interest in warehouse sites in the central U.S. near manufacturing and agricultural production, like the Kansas City area, could occur. One of the top ten central U.S. warehouse sites is located in Liberty, MO, within the KC region .

RISK MANAGEMENT
Conventional risk management has always been part of the warehousing location decision. Companies have long taken into account such considerations as the integrity of the physical site, insulation from natural disasters and other risk factors when choosing where to locate a warehouse or distribution center. The pandemic, however, will greatly expand the boundaries of risk management and its role in site selection. 

COLD CHAIN
Cold storage was already on track to become a much larger player in the supply chain. Now, there is unprecedented interest in the cold chain from a range of industries, including food, biotech and pharmaceutical. Consumer buying habits are changing, and many will continue to order perishables online. Additionally, pharmaceutical and biotechnology firms are developing a wide range of new products that rely on cold storage throughout the entire supply chain. It is predicted that between 100 million and 125 million sq.-ft. of freezer/cooler space will be required to meet new demands.

TECHNOLOGY AND CONNECTIVITY
Some companies are turning to robots to help maintain social distancing and keep workers safe within the warehouse setting. Greater use of robotics will also be encouraged by the increased reshoring of manufacturing and supply chain facilities back to the U.S.