Amazon that need to move a lot of single
product to individual customers as rapidly as possible. It’s important to note,
that what happens in one sector of the
industrial world will affect all others;
technologies that were pioneered in
e-commerce are beginning to penetrate
other industries.
Travis Land, SIOR, a partner with NAI
Partners in Houston, is beginning to see
changes in the region’s main industrial
sector, oil and gas. Despite being the
country’s fourth largest city with a
huge port, Houston was not originally
targeted for big distribution centers of
e-tailers. That has changed in recent
years.
“Our market has been slower to receive
some of these e-commerce centers, but
as they have come it has become obvious the importance of automation,” says
Land. “Other industries are starting to
take notice.”
Indeed, companies that are at the forefront of robotics and automation, that
are selling equipment or creating training facilities are washing into Houston,
hoping to see the “transition from
e-commerce to the large oil and gas
manufacturing companies,” says Land.
Even that has been good business for
brokers. An international robotics company recently expanded to Houston just
to train people on its equipment.
Land found the company an existing
25,000-squre-foot building in northwest Houston, near to the oil and gas
manufacturers. “We did a shorter term
transaction, expecting there would be
strong demand for the robotics and
automation they were selling. They
wanted a first-class facility with constant 72-degree temperature in the
warehouse but also to have a pleasant
showroom,” he explains.
However, the true effect of automation
is with manufacturers. Land, for example, worked with an injection-molding
company that, because new automation,
was doubling capacity while keeping the
same number of employees.
“With automation they were able to
double output, but it also needed
more space,” says Land. “It needed a
specialized facility, so we interviewed
developers and went through the
design-build process. A 65,000-square-
foot building on 10 acres was designed
to be expandable in case the business
continued to grow. It had higher ceilings,
advanced sprinkler systems, tilt-wall
(the company had been a metal facility)
and ovens that needed numerous air
changes per hour.”
Asked if there were any trend lines in
regard to companies expanding with automation technologies, Land answered
that it depended on whether a company
wanted to be at the forefront of new
technology.
The opportunities for advanced automation in industrial, ware- house, and distribution facilities is
picking up steam, reports VDC Research
Group Inc., a Natick, Mass., market intelligence and advisory firm.
The current situation, according to VDC,
is that companies are facing significant
pressures to optimize operations as the
complexity of processes increase, including the need for on-time shipments,
reducing cost of errors, perfecting
order rate, improving storage utilization, and reducing expenses involved in
expanding warehouse operations and
labor forces.
The warehouse and distribution environment is changing: facilities are
growing larger, the required workforce
is increasing, and the number of SKUs
(stock keeping units) that have to be
managed has spiked, reports VDC. “As
a result, companies are seeking new
ways to optimize their operations with
Amazon, Nike, Tesco, Wal-Mart, and
UPS, piloting or having adopted robotics solutions for automated storage,
picking, and transportation. Robotic
technologies such as automated storage and retrieval systems, automated
guided vehicles, picking robotics, and
delivery drones, are being deployed
to meet higher expectations for order
fulfillment, cost, material handling, and
employee turnover.”
The normally staid and stable world of
industrial real estate is on the verge of
some major alterations, which, in turn,
will affect the brokerage side of the
business. While, technically, a “box” is
still a “box,” what goes into those four
walls is transformative and that, in turn,
will change the requirements of clients
who need to be in those boxes.
The necessity for more efficient warehouse and distribution systems has
come about due to the rapid expansion
of e-commerce — companies such as
"The warehouse and distribution environment is
changing: facilities are growing larger, the required workforce is increasing, and the number
of SKUs that have to be managed has spiked."
