Dematic on tackling land scarcity

A number of Australia’s industries, spanning from food and beverage to retail, wholesalers, and spare parts, today face a common dual challenge: land scarcity due to urbanisation and the resulting surge in land costs.

These issues result in large barriers for these industries to overcome, yet also create opportunities for innovation, enhanced efficiency, and ongoing sustainable practices.

Against this backdrop, there is a need to explore strategic responses and new approaches to navigate both current challenges and future uncertainties.

LAND SHORTAGES: MAXIMISING EFFICIENCY IN A CROWDED LANDSCAPE

The phenomenon of urban sprawl, particularly along Australia’s eastern seaboard, has significantly impacted food and beverage, retail, wholesaler and spare parts supply chains.

With more than half of Australia’s population residing in just three cities on the eastern coast along with a significant spike in ecommerce, the demand for land in these urban centres has soared, creating severe land scarcity. As a comparison, in the UK or US this proportion of the population would instead be spread across approximately nine and 27 cities respectively.

The situation is most acute in Sydney, where a CBRE report found that there was only a 0.2 per cent vacancy rate
for buildings of 5000 square metres or more during the first six months of last year. This is the lowest rate recorded globally.

CBRE says rents in Sydney are highest at $215 per square metres, compared to $119 per square metre in Melbourne, where the vacancy rate was also higher. The congestion in Australia has not only inflated the cost of available land but has also necessitated a rethink in how suppliers manage their logistics and distribution networks to service increasing demands of their customers.

INNOVATIVE SOLUTIONS TO URBAN CONGESTION: FOOD AND BEVERAGE

When considering their logistics footprint, food and beverage suppliers must implement optimised solutions that not only enhance economies of scale but also maintain agility in response to fluctuating market demands, without sacrificing performance.

It’s imperative they leverage their existing land footprints to achieve increased storage capacity, heightened throughput, improved facility velocity and greater overall value, ensuring every square inch contributes to operational efficiency and effectiveness.

By co-locating and integrating warehouses with existing manufacturing sites, the food and beverage industry aims to streamline operations, reduce transportation needs, and ultimately mitigate the impacts of urban congestion.
One leading solution used for these logistics requirements is an Automated Storage and Retrieval Systems, which offer a way to significantly enhance storage efficiency within the limited available space.

An AS/RS provides the high-density, high-capacity storage for pallets in a fully automated solution and at a high speed, which also helps to reduce reliance on labour during a time of low worker availability.

Combined with the capability of automatically loading and unloading trucks, this solution provides a fast, accurate and cost-efficient storage and delivery solution.

Because automated warehouses do not need to accommodate manual access, they can be a high bay configuration that takes up less cubic space for the same amount of storage — typically 25 per cent to 35 per cent more storage density over traditional warehouses, and with heights typically 30 to 35 m (and up to 45 m) they can deliver more than 200 per cent increased storage in the same land footprint.

With an AS/RS solution, stock cannot be lost or forgotten, as the system provides complete and real-time visibility of overall inventory. The Diageo ASRS System in Huntingwood exemplifies this approach, integrating high-density warehousing right next to its Sydney manufacturing centre.

This strategic move not only improves storage efficiency but also reduces the logistics footprint by eliminating the need for multiple storage locations, minimising truck movements and manual operational touches between facilities.

RETAIL, WHOLESALERS AND SPARE PARTS

With the rise of e-commerce, consumers have grown accustomed to expedited shipping options, and many now expect their orders to arrive rapidly. As a result, retailers are increasingly using speed as a competitive differentiator.

In markets like Korea, companies such as Coupang have set the bar high by offering lightning-fast 2-hour deliveries. This trend not only reflects the surging expectations of consumers but also serves as a glimpse into the future of retail logistics.

As competition intensifies and consumer expectations continue to soar, the ability to deliver orders quickly, accurately and reliably is vital for retailers seeking to stay ahead in the ever-evolving retail landscape.

In today’s fast-paced retail landscape, the strategic positioning of distribution centres close to stores and consumers has become a critical factor for success.

This facilitates faster order fulfilment, streamlines transport and logistics, and reduces the need for extensive backroom store operations.

For wholesalers and spare parts operations, proximity to their business- to-business customers is necessary to meet the demands of a quick turnaround market.

Whether it’s mechanics repairing vehicles, mining operations maintaining heavy machinery, or builders overseeing construction projects, the ability to access parts quickly is essential for ensuring uninterrupted operations.

By locating distribution centres near their B2B customers, wholesalers can streamline their supply chains, reduce delivery times, and provide the level of service necessary to support their clients in meeting their own deadlines and commitments.

Retailers, as well as wholesalers and spare parts operations, are also further optimising their supply chain footprint, overcoming current labour availability challenges and ensuring that products reach their intended destinations quickly and efficiently, through automation.

Solutions such as the Dematic Goods- to-Person Multishuttle system, AutoStore systems, and Autonomous Mobile Robot picking systems are capable of enabling high capacity reaches picking, which is ideal for retail, wholesale and spare parts distribution centres.

The choice between Dematic GTP- Multishuttle., AutoStore or AMR picking solutions depends on various factors, such as a company’s business model, supply chain structure order profiles, products handled and constraints such as building footprint and height.

For instance, businesses with very high order volumes may benefit from the fast throughput capabilities of GTP- Multishuttle solutions.

Companies operating with limited warehouse space may find AutoStore’s high storage density more suitable for their needs.

While companies with limited headroom and high order volumes may benefit most from an AMR Bin- to-Picker, and those with lower order volumes most suited to an AMR Shelf- to-Person solution.

LEVERAGING INNOVATION AND EFFICIENCY TO OVERCOME CHALLENGES

As the food and beverage, retail, wholesaler and spare parts industries look to the future, they face a landscape marked by rapid change and increasing complexity.

The challenges of land shortages and rising energy costs necessitate a strategic approach that balances immediate needs with long-term sustainability.

The pivot of these industries towards innovative storage solutions and energy-efficient practices highlights
a commitment to overcoming these challenges through adaptability and foresight.

By optimising the logistics footprint and embracing sustainable operations, the sector is not just responding to current challenges but is also preparing for the future.

David Lamb,
Consulting Manager, Dematic