Australian retailers must balance centralised efficiency with regional speed when designing resilient, scalable fulfilment networks for growth, says Roald De Groot, Director of Sales at Vanderlande.
As customer expectations for speed, availability and flexibility continue to rise, retailers are reassessing how their distribution networks are structured. In Australia, this discussion is particularly relevant given long transport distances, dispersed population centres and sustained labour pressure. A common strategic question is whether to operate fully dual-ranged distribution centres or adopt a hybrid network combining regional DCs supported by a national DC. Importantly, a dual-ranged strategy does not imply a single site; many organisations operate multiple dual-ranged DCs across the country, each capable of servicing all channels.
Hybrid networks: regional DCs supported by a national DC
In a hybrid model, a national DC typically holds slow-moving, long-tail or inbound inventory, while regional DCs focus on fast movers, store replenishment and customer-facing fulfilment.
For Australian retailers, this approach can significantly improve service levels by reducing delivery lead times and enabling later order cut-offs, particularly for east–west or metro–regional splits. Shorter last-mile distances can also reduce outbound transport costs, which is increasingly important in a market exposed to fuel volatility and carrier constraints. Distributing inventory across multiple sites further improves resilience, reducing exposure to disruption at any single location.
The trade-off is increased complexity. Inventory segmentation, inter-DC transfers and replenishment logic require mature planning capabilities and reliable execution. Operating multiple sites also increases fixed costs across buildings, labour pools and automation, making this model more suitable for larger networks with sufficient scale and operational discipline.
Fully dual-ranged DCs: centralised capability, distributed footprint
A fully dual-ranged DC is designed to handle store replenishment, e-commerce, wholesale and returns from a single operation. While sometimes implemented as one large site, many Australian retailers deploy several dual-ranged DCs nationally, each serving a defined geographic catchment.
The primary advantage is simplicity and efficiency. Fewer inventory nodes reduce safety stock and improve working capital, while standardised processes support consistent execution across channels. Dual-ranged operations also offer strong flexibility, allowing labour and automation capacity to be dynamically allocated as demand shifts between retail, online and wholesale flows.
However, this model places greater emphasis on robust upfront design. Each site must be capable of handling demand variability, peak events and channel mix changes. If not carefully located, longer delivery distances can also increase transport costs, particularly in regional or remote areas.
Designing networks for an Australian future
In practice, network design is rarely binary. Many organisations start with one or two dual-ranged DCs and evolve toward a hybrid model as volumes grow, service expectations increase or geographic reach expands. In Australia, this evolution is often shaped by labour availability, transport economics and the need to balance service speed with cost control.
From an automation and solution perspective, both models benefit from modular, scalable systems that allow retailers to start with core functionality and expand capacity, channels or throughput over time. Increasingly, leading organisations prioritise future-ready designs that can rebalance flows between DCs, introduce new services such as wholesale or returns, and adapt to changing demand without structural disruption.
Ultimately, the right fulfilment network reflects a retailer’s service promise, product velocity, geographic footprint and risk appetite and its ability to evolve as the business grows.
