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The Success Secrets of a Logistics Construction Investment

Evangelos Antoniou, regional project manager, IBLS-WPL and Ioannis Berlis, commercial manager, advise on how to create a functional and effective logistics centre

When it comes to a logistics investment (of distributers or retailers) – like building a new storage-distribution facility of goods, or expansion, reorganisation, optimisation of existing ones – the first step is the realisation of the market needs, the potentials of business expansion and the anticipation of future growth, along with the potentials of productivity and operational cost savings under a numerical and quantitative point of view.

The second and most crucial step that very often is neglected, following the strategically land selection, is the requirement analysis. Warehousing generally is about efficient
space utilization, optimum material flow and cost-effective materials handling given the logistic activities characteristics and the physical constraints. The best possible understanding of the true needs, the systematic mapping of the current and the anticipation of any future requirements, as well as the incorporation of the works into the general context of modern techniques and solutions constitutes a premise for success in terms of productivity and operational efficiency and costs.

Proper design of a logistics centre takes place from the inside out; from the SKU and the current activities on the stock inside the building. Thus, every warehouse design phase should begin with a diagnostic study and requirement analysis (stock data organisation and analysis, storage calculation model and capacity utilisation rate) to conclude on the proposed operational arrangements and the building concept.

This methodology transforms historical data into design requirements. Profiles of different data elements help to address the variety of questions that must be answered in the facility design effort.

That way the building under design shall adapt to the current stock needs and logistic activities and not vice versa. Such requirements indicative relate to the following:

  • maximum storage volume of building
  • optimum materials flow
  • flexibility of racking arrangement with variable aisle positions
  • size flexibility of all functional areas (receiving – loading area, cross docking area, added value area and stock area).

Requirements analysis is meant to respond to the question “what requirements need to be addressed?” It is the process of answering, by close cooperation between client and
consultant, a very well formulated customized set of right and tangle questions of the logistics and building aspects that unlocks the mindsets and the hidden data, evolves and transforms the initial idea into reality reveling and leading to the best possible building concepts from operational, maximum capacity utilization and productivity point of view.

Another very important factor in the process of materialization a construction logistics project is the assumption of full responsibility from the technical building and logistics consultant. That means that the key of a successful end result in terms of cost effectiveness, time schedules and in the end operational and productivity efficiency of a logistics facility is the full assumption of responsibility from a single suitable consultant for all installation studies, along with budgeting and licensing of the project, as well as construction project management and supervision even commissioning and training, up to the delivery and operation of the project by the end user. That means also responsibility assumption by a single manager regarding communication with the client for all technical, economical and operational issues that may arise.

The single point of responsibility assumption is a necessity, since a very well identified problem in a lot of cases is that, from one hand the involvement of different parties with inherent separate and different points of view eventually leads to a building where all the critical parts and aspects (logistics activities, automation systems, structural approach, building cell, electromechanical installations etc) are not finely and desirably tuned to serve the maximization of the operational and productivity efficiency and from the other it is the major reason responsible for conflicts and schedule delays. In a way it is like choosing between a holistic design approach and a reductionist approach, and not only.

This commitment of full responsibility from a technical consultant capable to combine logistics specialties and engineering expertise is the safest road in the end of the day to guarantee the best result of a logistics construction project.

As a conclusion, requirement analysis and full assumption of responsibility are the two essential elements, the two major pillars that can safely and cost effectively lead a logistics construction investment to a logistics facility with very high productivity, optimum operational functionality and flexibility, maximum storage capacity, all those key factors that are related directly or indirectly in maximizing turnover, income and financial results of a logistics unit and an enterprise. If requirement analysis is the foundations, the full assumption of responsibility is the body and the framework.