Why Dallas is a Great Place to Build a DC
Building a new warehouse or distribution center, but not sure of exactly where in the country you should build it? As we can see in Amazon’s search, “Where should I build my warehouse?” is a question that corporations throughout history have struggled to answer for decades.
There are a number of factors to keep in mind when you set out to build a new facility—from how product flows through your operation to what peak throughput will be to how large of a footprint you’re business will require—but the most consequential factor, by far, will be your new facility’s location.
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The answer to that question will largely depend on the answers to a few key questions about how your operation currently works, what your plans for expansion are, etc. That being said, there are a number of locations throughout the US where supply chain, materials handling, and order fulfillment operations tend to flock. Dallas, Texas, is one such location that is ideally suited for order fulfillment operations.
But why, exactly, have so many order fulfillment operations turned to Dallas when it comes time to raise a new facility? Below, we discuss some of the reasons that Dallas has become such a popular distribution hub so that you have all of the information that you need while you make your own decision about where to build your new facility.
Warehouses and distribution centers perform two important tasks for the operations that they support. The first is, simply, to effectively and efficiently store inventory for the operation: They act as the physical space that inventory lives in, and in that way they act as a buffer for demand of your goods. And the second is to be an order fulfillment center, distributing that inventory wherever it needs to go—whether that means transferring bulk inventory to another warehouse, shuttling materials or parts to a factory, or delivering orders to a customer.
For that very reason, it is essential that wherever you decide to locate your new facility, it must have easy access to proper transportation infrastructure.
The exact type of transportation infrastructure that you need will of course depend on the specifics of your operation: The kind of inventory you deliver, the size of your orders, your preferred methods of getting those orders from location to location within your supply chain. Regardless of your operation’s unique needs, Dallas offers transportation options that will allow you focus on what you do best, and not worry as much about logistics.
If you, like many operations, use trucks to deliver your product around the country, then easy access to interstate and local highways is crucial to reduce delivery times and keep your customers happy. Being served by many interstate highways—including I-20, I-30, I-35, and Routes 67, 75, 77, 80, and 128 —means that the Dallas area is an ideal one for any operation heavily reliant on trucks for long-haul delivery.
Additionally, Dallas is supported by three airports (Dallas/Fort Worth International Airport, Dallas Love Field Airport, and Dallas Executive Airport), perfect for operations that deliver orders by air.
Order fulfillment—the process of getting order where they need to be, in the hands of a customer—tends to be one of the most expensive pieces of the puzzle for order fulfillment operations. After all, it’s right there in the name. Cutting even a few percentage points from the cost of order fulfillment can have huge beneficial repercussions for your bottom line, allowing you to become more profitable.
By building warehouses in key locations around the country to act as regional distribution hubs, operations that serve the entire country can drastically reduce the transportation costs associated with individual orders and deliver orders to customers faster than in the past. The logic is simple: The less distance an order has to travel, the cheaper it will be to deliver.
Though not as centrally-located as, say, Kansas, Dallas falls within the center of the southern United States. This allows the city to act as an effective central distribution hub to the entire region, from Florida to Southern California and even into Mexico. Its access to major roadways (see above) and its proximity to other major metros like Houston and Austin are indispensable.
Plus, with more than 28 million residents, Texas is the second most populated state in all of the US (just behind California). Building a new facility in Dallas means that your operation can better support these customers.
3. Labor Availability
Warehouse automation has the potential to drastically reduce the number of personnel that an order fulfillment operation must employ in order to be effective. But even the most automated of operations will require at least some level of workers to keep the machines running.
With the US unemployment rate at a record low of 3.9%, you can’t just build a warehouse expecting that you’ll be able to find workers to fill the required roles: You need to ensure that, wherever you are building your new facility, there is a clear source of labor to keep your operation churning.
As a major US city, Dallas has a built-in labor pool. Additionally, because of city’s burgeoning status as a distribution hub, much of the city’s workers have valuable experience working in order fulfillment and supply chain logistics.
Is your operation leaning heavily into warehouse automation as the future of order fulfillment? Then you’re going to need a highly-educated workforce skilled in emerging technology. The Dallas-Fort Worth area, served by more than 40 colleges and universities, is an ideal place to find new workers with the skills that you need.
4. Quality of Life
When building a new warehouse or DC, chances are good that you are not planning on asking the bulk of your workforce to relocate: The vast majority of employees at your new facility are going to come from the surrounding labor pool.
Still, the fact remains that you very well may need a trusted manager or transition team from your current location to relocate to the new area in order to manage the design build and potentially oversee the process of hiring. Asking an employee to relocate is always a challenge, but is especially challenging if the new location lacks the creature comforts that your team members enjoy.
One key selling point of the Dallas area is the fact that cost of living is much lower in the city and surrounding area compared to virtually any other major metro. To put the cost of living in perspective, Dallas is:
- 41% less expensive than New York City
- 17% less expensive than Los Angeles
- 34% less expensive than San Francisco
- 27% less expensive than Washington, D.C.
And yet, despite the relatively lower cost of living, residents of Dallas can enjoy many cultural and social activities typically found in other major metros. The city lays claims to two major sports teams (the Dallas Cowboys and the Mavericks), multiple famous museums, theatres, and parks, and seriously good eats ranging from Tex-Mex to BBQ.
Because of all that Dallas has to offer, should you need an employee to relocate to your new location on a temporary or permanent basis, it will likely be easier than convincing someone to relocate to a less attractive location.
The Bottom Line
If you are trying to decide where in the country you should construct your order fulfillment operation’s newest warehouse or distribution center, you would be mistaken to leave Dallas off of our list. The city boasts impressive transportation infrastructure, is a convenient hub for South-Central expansion, and provides a built-in source of educated and trained labor—all at an affordable rate.
Regardless of where you decide to build your new facility, a quality systems integrator can help you determine the systems, processes, and technologies that you should leverage to make your operation as productive, efficient, and profitable as possible.