3/1/2023 0 Comments Daylife forbe![]() ![]() However, by developing a deeper understanding of global logistics, we can advise our clients on innovative ways to minimize on-hand inventory, which reduces their need for fixed real estate assets. This may appear counterintuitive to what people in our industry usually strive to do, which is to sell more square footage. The fact is, if we as commercial real estate professionals are doing are jobs well, we actually want to reduce the footprint of our industrial clients. Today, manufacturers are tasked with same day and next day fulfillment for anywhere from 10,000 to a million unique products, often shipping to up to 25 million customers per year.įor these manufacturers, it’s imperative to have a real estate professional who can assist with analyzing technology and locational considerations against inbound and outbound customer bases in order to make the right decisions. Traditionally, manufacturers would build a distribution center and analyze palate positions, then ship product to 10 customers in 200 locations, with perhaps 100 unique products. This is especially important in the current market, in which ecommerce fulfillment has become the norm. By reducing products’ time in transit, manufacturers are lowering costs, while moving physical goods and intellectual property closer to end users. In addition to more precise manufacturing, however, there is also a huge benefit to manufacturers with regard to time and cost. Increases in labor, shipping, and fuel expenses are driving many global companies to bring production back to North America, says Turner. For example, the production of surgical equipment, such as laser technology for cataract surgery, must be extremely precise, or the repercussions could be enormous. Much of this is because there is a lower tolerance for error when it comes to these products, which require process manufacturing. While lower-end consumer products, such as apparel and toys, are still manufactured overseas, production of other items, such as instrumentation, devices, machinery and equipment, is moving closer to end users in the US. ![]() Manufacturers and distributors are now increasingly seeking factory, warehouse and distribution space in Los Angeles, Orange County, and the Inland Empire in order to utilize local ports, as well as expanding class one double track rails from L.A. The result is an increasing demand for industrial real estate in Southern California. As manufacturers continue to weigh the costs of moving goods in today’s market, increases in labor, shipping, and fuel expenses are driving many global companies to bring production back to North America. ![]()
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