By Mark Pallisco 29 June 2017

Online shopping and automation are just two of the mega trends hitting the warehouse and manufacturing industries. The disruption is causing a rethink on site strategy, and it's also inspiring some unique factory designs.

When factories win global design awards for, among other things, innovation, sustainability, and staff wellbeing, it's clear the executives of organisations who commission these work places consider industrial property to be more than a humble shed.

"Centre" might be a more apt description for some of the newest industrial workplaces. They often incorporate office, retail, training and tourism space alongside traditional manufacturing divisions.

The industrial sector has evolved greatly since the start of this century. One important driver is the online shopping trend, which may cut out some bricks and mortar retailers from the supply chain, but is also creating a logistics-led building boom.

Here are some of the trends and innovations that are changing the future of the factory.


2 Bellevue circuit Greystanes
Strategic locations has become key to the efficient working of the distribution centres that are so important to efficient supply chains.

Outsource or insource?

The most recent 2015-16 State of the Nation report from Roy Morgan Research shines a spotlight on the retail industry. It shows a turnaround in the number of shoppers buying at bricks and mortar retailers for the year; there was an increase of more than 90 million visits. But the report also underlines the fact that Australians continue to embrace online retail shopping. 

“In an average four weeks, 43 per cent of the population make at least one purchase via the internet, spending $3.2 billion between them – equating to $41.3 billion last financial year,” the report says. “This represents an increase of 9.75 per cent on the amount spent during the 2014-15 financial year”. 

The trend has forced industrial organisations which manufacture or import retail goods to weigh up whether to outsource or insource generate supply chain functions.

Third party logistics (3PL) service providers try to make the distribution process easy for the companies which contract to them, forging close professional connections, being flexible and providing access to sophisticated software that may, for example, allow goods to be handled and tracked from ship to shop shelf. 

However, many leading companies retain their warehouse and operational functions in-house for strategic reasons, including for maintaining their own client relationships and allowing for flexibility in selection of 3PL service providers. 

Spanish retailer Zara is often cited as an example of a company that uses internal logistics to its advantage. The fashion group is renowned for quick production of new designer wares and an efficient distribution chain that has the latest trends in Zara stores before its competitors.

Industrial architects must be doing something right when houses are designed to have a factory or warehouse look

New logistics landscape requires location rethink

Still, there's little point investing in an industrial space if it is poorly located.

According to property advisory MacroPlan Dimasi, selection of strategic locations has become key to the efficient working of the distribution centres that are so important to efficient supply chains, especially for the last mile, which means transport task to point of sale. 

“Port land tends to attract the highest rents and land values,” says general manager Queensland, Mark Courtney. “Meanwhile sites in and around intermodals or other roads and /or rail infrastructure-rich corridors represent an alternative which incorporates a trade-off between access to markets and land cost, where focus is generally aligned to inbound as opposed to outbound transport tasks. 

“For this reason, certain industrial precincts within greater metropolitan areas have been transformed by the development of larger warehouses and super-sized distribution centres. 

“Proximity to the workforce is also an important consideration for the selection of strategic locations,” Mr Courtney said. Industrial practices which incorporate skilled labour emphasise this scenario. 

When factories win global design awards for, among other things, innovation, sustainability, and staff wellbeing, it's clear organisations consider industrial property to be more than a humble shed.

The new shed: just one part of a whole

And if you think you’re seeing more white collars among the blue collars in the newest industrial estates, you may be right.

The latest industrial facilities usually include an adjoining office component, which, according to commercial property agents, is fitted to the high standard that the Property Council of Australia would define as A-grade. 

Some companies have consolidated into one industrial site the functions that were previously carried out across two or more buildings (an office and a factory or factories). 

In 2005, BMW merged office and industrial functions into a complex it dubbed the nerve centre. Located in Leipzig, Germany, it was designed by multi-award winning British architect Zaha Hadid. Another prestige car brand, McLaren, also has swank offices beside its production plant in Woking, Surrey, UK. At the most extreme end of the scale, industrial occupants can have visitor centres, shops, hospitals, fire stations and onsite employee accommodation. 

Some companies use their factories for marketing purposes, including Volkswagen, which has a transparent glass production plant that passers-by can watch from outside, or which can be toured.

Robots and automation

Automation has bought with it a slew of cost savings for industrial organisations.

At production plants, many assembly lines are 100 per cent mechanised. Warehousing and distribution facilities are also increasingly automated now, in the hands of capable robots (one machine, for example, called the Flexipicker, is so smart it can sort coloured balls).

At Hyundai's landmark Ulsan factory in South Korea, the world’s single largest automobile plant, automation helps the car manufacturer produce up to 5600 vehicles per day.
Still, this is not necessarily the way all manufacturing is going.

Audi employs robots only to line parts up, so that humans can weld together its “hand-built” R8 sports car. It is said to take more than 100 Audi employees over one week to produce one R8 at its enormous Neckarsulm plant in Germany.

warehouse automation
Warehousing and distribution facilities are also increasingly automated now, in the hands of capable robots.

Design

Industrial architects must be doing something right when houses are designed to have a factory or warehouse look. Far from the stereotypically dark, dirty factory of the past, modern day industrial facilities are often appointed with steel, concrete, and glass. The designs allow an abundance of natural light and bring cost and environmental benefits, as well as creating a sense of wellbeing among workers.

The focus is on exteriors, too. Bang & Olufsen's warehouse in Struer, Denmark is revered by designers, who say its look resembles that of a museum. Meanwhile, the svelte Aston Martin headquarters in Gaydon, UK is “an embodiment” of the company and its cars, the group says.

And in a really wonderful example of materials design, Olisur Olive Oil has upped the ante on sustainable development, opening a factory in Santiago, Chile, which is made of biodegradable materials.

The industrialists who are responsible for encouraging innovative design are visionaries: they know that both form and function matter in a world where demonstrable environmental and social consciousness make up a large part of a company's brand.


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