Advances in technology affect all industries and distribution is no different. Automated warehouses are now common but the tide of technological change waits for no-one. So what effect is this having on shed requirements and the industry in general?
Firstly there are the buildings. Should developers create technologically-designed speculative buildings or should they build a shell and leave it to the occupier to fit out to their specific standards?
Paul Brown of CBRichard Ellis believes you should leave it to the occupier: “Building sheds is about trying to create the ultimate general product. Anything that’s technology related can be difficult for a tenant to fit it out because every company has a different way of running its distribution.”
Brown points to the 90,000 sq ft Hi Rack shed in Stevenage that had an automated racking system with shed constructed around it as an example of automation interfering with a sale. “That sat on the market for ages, almost a year,” says Brown.
“It’s an old problem,” says Mike Alderton, head of industrial at Lambert Smith Hampton. “Developers will put in certain features and they’re not going to always work.”
Developers believe there should be certain hi-tech enticements, but not too many. Gazeley’s construction director, Pat McGillycuddy simply says that when a developer builds a speculative building “he wants to make it as attractive as possible.”
Kevin Edwards, a director with developer Gladman, is constructing three 500,000 sq ft speculative sheds in the North West. Each one will have 15m eaves height with the suitable number of dock levels in order to accommodate VNA racking systems.
“We were mindful that the buildings need to be automated, especially because they are speculative. But if you don’t have things like the right floor, it would probably alienate a large section of the market,” he says.
It is the food companies, with their need to get stock from warehouses to store quickly, that are leading the way in introducing new technology. Sainsbury’s, for example, has introduced new technology at its 700,000 sq ft Hams Hall distribution centre, near Birmingham. The supermarket chain’s decision to upgrade shows the potential problems occupiers can face when trying to improve their systems.
Sainsbury’s has chosen systems based on those trialled in the car industry and the US. Before it went operational it was estimated that supply chain overheads could be cut by as much 30% by using the new system.
The company has rolled the technology out to its 480,000 sq ft unit at New Rye Park, Hertfordshire, a 600,000 sq ft depot at Waltham Point, Essex, and the 550,000 sq ft site at Sideway, Stoke-on-Trent.
Andy Banks, supply chain development director says: “We are pleased with the progress we’ve made over the past year on the supply chain transformation programme. Our Stoke and Hams Hall distribution centres are each moving over a million cases a week and we have 60% of stock going through the future network.”
But it hasn’t all been plain sailing. Expanding the system further was delayed because of teething problems which caused Sainsbury’s to split, albeit amicably, with its third party operator Tibbett & Britten.
Bill Howie, managing director of special operations in the UK for Tibbett & Britten says the fundamental problem was that the specifications of the warehouses designed by Sainsbury’s were extremely tight in having to meet productivity levels.
“The customer wants a third party to run the site, but it does all the fit-out specifications itself, which is where problems can happen. The more automation you use the more risk of loss of time there is if something goes wrong.” Most of the problems have now been ironed out say Sainsbury’s. There is no doubt that as technology continues to advance, further changes will be necessary for those involved in the distribution industry.
