SC Tech and its Impact on CRE

I recently read an interesting article in the 1Q 2016 CSCMP’s Supply Chain Quarterly titled “Ten tech trends that will transform your supply chain”.  The article reviews ten technology trends cited by International Data Corporation (www.idc.com) as trans-formative to the manufacturing supply chain.

As I am a supply chain real estate adviser, when I read this article my thoughts immediately focus on, assuming this list is prophetic, what are the potential impacts on the real estate within the manufacturing supply chain.  Starting with the IDC list, I have written a few of my opinions below on how each trend might correspond to supply chain real estate.  As always I welcome your feedback!

  1. Cloud-based commerce networks
    • Increased cloud usage may correspond to larger bandwidth requirements.  Properties with ISP’s providing larger bandwidth at lower costs may be much more attractive to end users.  Properties without bandwidth may require tech work-arounds, which may or may not be possible.
  2. Micrologistics
    • A great trend for industrial real estate and 3PLs in infill markets.  For those companies who desire dedicated facilities, considerations may include lack of trailer storage on-site, sub 30′ clearance heights, truck ingress and egress issues, and sharing common areas.
  3. Integrated business planning
  4. Modern postponement
    • Modern postponement ties in with the cloud and micrologistics concepts and many of the same real estate considerations apply.  Requirements for 3D printing and other flexible manufacturing processes may increase the need for additional power sources.
  5. Resiliency and visibility
  6. “Broadening” of the supply chain
    • Adding product design, manufacturing, and service to a supply chain will most likely drive demand for more employee intensive properties.  Amenities such as increased employee parking areas, increased power, and proximity to retail amenities would likely be of greater importance.  Companies could separate the product design and service functions to office space.  However, if there is a need to have all three functions in a certain location, this separation would typically be more expensive than if all three were in one industrial space.
  7. Cloud-based WMS and TMS
    • With greater cloud-based data there may be additional demand for internet bandwidth.
  8. Robotics
    • Increased power requirements, access to alternative sources of energy, locating in lower cost energy areas may be drivers for companies employing robotics in the supply chain.
  9. Internet of things
  10. Talent
    • Location, location, location.  It probably goes without saying that anyone with marketable talent will want to work in a desirable environment, unless the corresponding compensation in one shape or form is adequate to offset their preference.

Published by

Chuck Berger

I am Director with Cushman & Wakefield's Global Supply Chain Solutions (CA Broker License #01359232). My passion is solving real estate problems for supply chain companies and investors.

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