The common view of the transportation industry today is often the system that includes ocean carriage, port activities, and intermodal distribution. Containerization has allowed us the liberty of concentrating upon a window which includes ships, cranes, port capacity, and a combination of rail and truck inland carriage. While these activities are definitely critical segments of the international transportation system, one of the most important cost considerations for many domestic corporations extends beyond this to the role their overall network of warehouses play in relation to their retail centers. This segment not only includes inland transportation, but the number, location and development of distribution centers and subsequently, the final destination, retail outlets. Both of these often depend not only upon international transportation but the role played by the movement of domestic commerce as well.
Investigating, analyzing and offering valuable conclusions on the enormity of corporate warehousing decisions and retail locations has become one of the primary objectives of MWPVL International. The Canadian company, located in Montreal, Quebec and founded in 2006, is a full service global supply chain logistics and distribution consulting firm, providing information and guidance on the handling and distribution of both domestic and international goods, the cornerstones of some of the world’s largest retailers.
MWPVL gathers and analyzes information on the location of new warehouse development, control systems, transportation and retail outlets. Their concentration upon the analysis of corporate structures includes over fifteen categories, and the results will include information and financial data that will assist their clients in analysis and decision making. The focus on each warehouse location includes consideration of its proximity to the retail outlets it will serve and in the case of special commodities, the goods handled. To this end, MWPVL tracks the development of storage, retail shelf space, and the capacity available in each.
Marc Wulfraat, president of MWPVL International emphasizes that his company is a full service global firm specializing in domestic supply chain logistics and the distribution activities of large corporations. Wulfraat points out that the main element driving his firm’s success is their intense curiosity of, as he simply explains it, “How the world’s most successful companies strategically distribute goods to market.” He lists more than fourteen areas that his analysts will concentrate upon while conducting their studies on this subject. In most cases, his firm’s area of concentration does not include all of these considerations, however, the depth of their analysis may also take them to subjects that were not a part of the original plan.
Depending upon the requirements of their clients, MWPVL has the capability to offer complete analysis and strategies that include supply chain networks, location of warehousing in proximity to retail outlets, product sourcing, 3-PL outsourcing strategy, purchasing sourcing and inventory management, purchasing forecasting, transport management, materials handling systems, supply chain technology, warehouse operations assessment, distribution center design and on-going advisory services. Wulfraat indicated during a recent panel discussion, that “The key question his firm asks itself when beginning a study, is at what point does it make economic sense to increase the number of distribution facilities that would be strategically located to reduce both inbound and outbound miles?”
MWPVL’s study of the Walmart Distribution network centered upon this question. Walmart’s network began in 1970 with the opening of their first formal warehouse operation. Throughout the almost 50 years of operation since that time, Walmart stores and SAM’s Clubs multiplied. By 2017, the distribution centers supporting these retail outlets had also increased. Today there are 173 distribution centers serving the outlets of both of these operations. Walmart distribution centers encompass over 125.8 million square feet in the U.S. alone. The company has plans for the creation of four additional distribution centers which will bring an additional 4.2 million square feet for a total of 130.0 million square feet supporting the company’s distribution network in North America.
At this point, Walmart and Sam’s Club retail outlets total over 775 million square feet. MWPVL’s study indicated that measuring the key ratios that compare retail store square footage to distribution center square footage can be critical to the overall profitability of the companies they work with. The Walmart study noted that their distribution centers were divided into eight facility types including:
- General Merchandise
- Full line grocery centers
- E commerce
- Specialty (Optical, Pharmacy, tires, printing and mail)
- Import redistribution centers
- Center Point distribution
- Sam’s Club distribution centers
It is important to note that all of these distribution centers play a critical role in the profitability of the retail outlets they serve based mainly upon inventory availability, stock turns and actual transportation times.
Prior to taking on a project for a company, Wulfraat asks his key question, “At what point does it make economic sense to add more distribution facilities to reduce inbound and outbound miles.” In Walmart’s case, the answer has been clear and based upon their plans, they will continue to expand their distribution network.