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Distribution structure and distribution centre location decision-making – A review

Distribution structures and distribution centre (DC) locations are essential for logistics companies to optimise logistics costs and service levels. This paper reviews Supply Chain Management (SCM), Geography and Economic Geographic literature on distribution structure and DC locations decision-making. Two central decision-making elements are discussed: process steps and decision-making factors. Added value of our paper is 1) A literature review 2) Conclusions on the state of current scientific knowledge in three research streams 3) A research agenda. Reviewing literature shows decision-making factors are renowned, however, importance of factors in each process step is unknown. Results also show literature diverges on which process steps logistics companies take (descriptive) or should optimally take (prescriptive) in distribution structure and DC location decision-making. Thus, more research is needed. Developing a descriptive conceptual model and testing on several industry sectors will be valuable to understand differences on distribution structure and DC location decision-making.

From XXS to XXL: Towards a typology of distribution centre facilities

Distribution centres are becoming more and more relevant for spatial planning, due to their rapidly increasing size and number. There is little literature, however, that provides a generalized analysis of the size and functional attributes of distribution centres, and none that discusses the relationships between these attributes. Our aim is to fill this gap by providing new evidence and analysis to understand this relationship. We make use of an extensive database of 2888 DCs in the Netherlands to develop a new typology of DCs based on the geographical location of DCs, their functional attributes and client sector characteristics. The analysis shows that the context in which medium sized DCs are operating is more heterogeneous than in the case of very large and small size DCs. This study is a first attempt to analyse this relationship between facility size and functions based on a rich and extensive dataset of large population of DCs. The results can serve as input for further quantitative statistical analysis and international comparison.

On the cost elasticity of inter-regional distribution structures: a case study for the Netherlands

Several studies show that logistics facilities have spread spatially from relatively concentrated clusters in the 1970s to geographically more decentralized patterns away from urban areas. The literature indicates that logistics costs are one of the major influences on changes in distribution structures, or locations and usage of logistics facilities. Quantitative modelling studies that aim to describe or predict these phenomena in relation to logistics costs are lacking, however. This is relevant to design more effective policies concerning spatial development, transport and infrastructure investments as well as for understanding environmental consequences of freight transport. The objective of this paper is to gain an understanding of the responsiveness of spatial logistics patterns to changes in these costs, using a quantitative model that links production and consumption points via distribution centers. The model is estimated to reproduce observed use of logistics facilities as well as related transport flows, for the case of the Netherlands. We apply the model to estimate the impacts of a number of scenarios on the spatial spreading of regional distribution activity, interregional vehicle movements and commodity flows. We estimate new cost elasticities, of the demand for trade and transport together, as well as specifically for the demand for the distribution facility services. The relatively low cost elasticity of transport services and high cost elasticity for the distribution services provide new insights for policy makers, relevant to understand the possible impacts of their policies on land use and freight flows.

Distribution of Power and Value Crucial for a Successful Circular Economy Transition

The circular economy (CE) is heralded as reducing material use and emissions while providing more jobs and growth. We explored this narrative in a series of expert workshops, basing ourselves on theories, methods and findings from science fields such as global environmental input-output analysis, business modelling, industrial organisation, innovation sciences and transition studies. Our findings indicate that this dominant narrative suffers from at least three inconvenient truths. First, CE can lead to loss of GDP. Each doubling of product lifetimes will halve the related industrial production, while the required design changes may cost little. Second, the same mechanism can create losses of production jobs. This may not be compensated by extra maintenance, repair or refurbishing activities. Finally, ‘Product-as-a-Service’ business models supported by platform technologies are crucial for a CE transition. But by transforming consumers from owners to users, they lose independence and do not share in any value enhancement of assets (e.g., houses). As shown by Uber and AirBNB, platforms tend to concentrate power and value with providers, dramatically affecting the distribution of wealth. The real win-win potential of circularity is that the same societal welfare may be achieved with less production and fewer working hours, resulting in more leisure time. But it is perfectly possible that powerful platform providers capture most added value and channel that to their elite owners, at the expense of the purchasing power of ordinary people working fewer hours. Similar undesirable distributional effects may occur at the global scale: the service economies in the Global North may benefit from the additional repair and refurbishment activities, while economies in the Global South that are more oriented towards primary production will see these activities shrink. It is essential that CE research comes to grips with such effects. Furthermore, governance approaches mitigating unfair distribution of power and value are hence essential for a successful circularity transition.

Trends in distribution centres and their locations

Integrated infomobility services for urban freight distribution

City logistics is one of the causes of today's road congestion in our cities, but at the same time its efficiency is affected by the traffic problems. The driving behaviour and mission strategies used by vans and lorries operating in urban areas usually does not exploit modern infomobility solutions. CityLog, a project co-funded by the European Commission within the 7th Framework Programme, aims at increasing the sustainability and the efficiency of urban goods deliveries through an adaptive and integrated mission management and by innovative vehicle features. More particularly, CityLog integrates a wide range of logistics-oriented infomobility services that include an optimized pre-trip planner, a new type of navigation system based on enhanced maps and a last mile parcel tracking service to avoid unsuccessful deliveries. © 2011 IEEE.