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Chicago ConsultingSupply Chain Consultants8 S. Michigan Ave., Suite 3600Chicago, IL 60603 (312) 346-5080emailus@chicago-consulting.com
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The 10 Best "Lean-Green" Warehouse Networks for 2008
By Terry Harris, Managing Partner, Chicago Consulting Chicago, IL January 2008: Chicago Consulting announces it has identified the 10 Best "Lean-Green" Warehouse Networks for 2008. These networks set benchmarks for companies interested in their carbon footprint and how more efficient distribution can reduce it. Historically the firm specifies the 10 Best Warehouse Networks (without the "green" element) every year based on fresh population statistics. It is widely reprinted and recognized throughout the US supply chain community. These new "Lean-Green" networks are "green" because they offer the shortest distance between the network and customers eliminating truck miles driven, congestion and carbon emissions. They are "lean" because the outbound costs are least and they are "best" because shipments from them reach customers in the least amount of time.
The 10 Best "Lean-Green" Warehouse Networks were developed from the firm’s proprietary optimizing software it uses to design supply chains for specific companies. Population was used as a proxy for a generic company’s customer pattern. "While many companies do not sell products directly to individuals," said Terry Harris, Managing Partner of Chicago Consulting, "population is a good representation of many companies’ customer patterns". "When designing an individual company’s network", he cautioned, "it’s always better to use their specific customer pattern." "Of course, other issues such as highway infrastructure, real estate issues, labor climate and so on are relevant as well", Harris added, "but cost and service are the most important criteria when designing warehouse networks." "Now", he continued, carbon footprint concerns are becoming re-engineering drivers. Fortunately they are congruent with cost and service." Referring to the table Harris explained that Bloomington, IN (about 40 miles south of Indianapolis) is the "best" place to locate one warehouse because it provides the shortest distance to the US population and, therefore, the lowest outbound distance, and takes the least amount of time. "Some shipments from Bloomington would travel 100 miles, some 200 miles and still others over 1,000 miles," Harris clarified, "but the average form Bloomington is the least possible." Similarly if three warehouses were located in any places other than Allentown, PA; Palmdale, CA and McKenzie, TN, the average distance would be more than the 377 miles specified above. When asked about the contemporary relevance of these green networks Harris said that recent fuel prices have increased company’s transportation expenses and that they are rethinking their warehouse networks. "Companies are expending extraordinary efforts to rain in costs," said Harris, "and re-engineering their warehouse networks is a high leverage area to start." He said some companies are adding locations, some decreasing them and still others are moving existing warehouses to new locations. "That these warehouse networks are green is an added plus to them being lean", claimed Harris. Contact Terry Harris Chicago Consulting (312) 346-5080 terry@chicago-consulting.com About Chicago Consulting Chicago Consulting designs supply chains for manufacturers, distributors and retailers. It orchestrates supply chain components such as procurement, warehouse networks, inventory deployment, transportation and warehouse operations. From offices in Chicago and Shanghai the firm has applied advanced techniques to design supply chains for over 20 years. Further information can be found at www.chicago-consulting.com | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||