The Role, Design and Operation of Distribution Centres in Agile Supply Chains

The aim of this research is to explore the role of distribution centres (DCs) in agile supply chains, together with how they should be designed, operated and their performances measured within this context. The research is based, first of all, on a survey to ascertain the current situation, and then a series of case studies of international supply chains, DC designs, DC operations, and warehouse automation projects. The techniques used include questionnaires, semi-structured interviews, quantitative measures where appropriate and qualitative measures based on 5-point Likert scales. A number of constructs are used, particularly from supply chain agility and manufacturing agility literature, and these are refined and extended to form the basis for the research. The findings indicate that a prime role of distribution centres, particularly in terms of inventory-holding, is consistent with the decoupling point concept. Further roles for distribution centres in agile supply chains include cross-docking, postponement activities, and returns. The research identifies five types of agility, namely volume, time, unit quantity, presentation and information. The responses to these different types can then be categorised according to the combination of levels (i.e. supply chain, business unit, distribution network, and distribution centre), by the type of resource used (i.e. land / building, equipment, staff, and process / systems), and by how these are deployed (i.e. extra capacity, additional resources when needed, and flexible resources). Agility measurement can be undertaken using the categories of range, mobility and uniformity. With markets becoming more volatile, agility can offer a key source of competitive advantage. However, warehouses are by their nature long-term fixed assets and therefore difficult to incorporate into an agile strategy. The series of frameworks developed during this research begins to address this important area and thus forms a basis for further research as well as providing some initial frameworks to assist practitioners.