Property supply chains key to success: David Irvine

GUEST OBSERVER

Australian companies can greatly boost their profitability by making industrial property decisions in strong consultation with supply chain and logistics directors.

There is a growing trend – and it seems to be happening with more urgency – that industrial property companies who’ve traditionally only done deals within their industry need to be made more aware of the growing influence and control of supply chain directors in making property-related decisions.

Within that space, a lot of automation and trends coming down from North America and Europe have the fundamental ability to disrupt how people go about planning their warehouses and distribution centres in Australia today.

By both driving costs and service, supply chains are also being used to add value to the customer experience. Automation allows companies to reduce warehouse footprints, lower head count and improve overall performance. 

Property is an enabler; it’s not a primary decision. So, we basically look at what the company wants to achieve in terms of the customer-service requirements and the competitive landscape. We then provide them with fact-based recommendations to assist their decision on the best infrastructure to support the company’s customer promise – at least cost.

In addition, Siecap regularly conducts studies for the property sector on site logistics implications. Key supply chain cost drivers which need to be taken into account include: site occupancy encompassing real estate, facilities and overheads; labour and handling; inbound freight; inventory and outbound freight and potential surrounding infrastructure changes which could influence these elements.

Companies which have factored logistics into their property decisions have enjoyed network operating cost reductions in the range of 10 to 16 per cent, as well as infrastructure cost reductions and logistics cost and service improvements.

David Irvine is chief executive officer of Brisbane project management and advisory firm Siecap and can be contacted here.