Recently, Dollar General (DG) announced plans to build its first dual distribution center in Blair, Neb. The 800,000 square-foot distribution center will support more than 1,500 stores in the Midwest and will house approximately 650,000 square feet of dry goods and 150,000 square feet of DG Fresh items.
The dual-purpose distribution center is one-of-a-kind in the United States. As you know, dry goods and fresh (perishable) goods are located in separate distribution facilities. This is due to the distinct temperature differences needed for each type of item. For example, in hot and humid climates, dry goods like paper products, wood and leather can be preserved longer in a climate-controlled warehouse.
So why would Dollar General want to build a dual distribution center? It’s because of the numerous benefits a dual purpose distribution center brings, ones that other retailers can experience.
A dual-purpose distribution center can improve your fleet efficiency, since both sets of goods are in one central location. According to the U.S. Census, in 2012, trucking, as a single mode of transportation, moved 73.7% of all goods and carried 8.2 billion tons of freight with an average of 216 miles per shipment and a total value of just above $10 trillion. Truck fleets with multi-temperature accommodations will increase efficiency since one truck can now deliver both sets of goods to stores.
In addition, you can build a vehicle maintenance facility alongside the distribution center. This includes a refueling system for the trucks that includes fuel tanks, refueling bays and a weather protective canopy. Another building to consider would be a truck return center or truck wash, something WinCo Foods implemented in its distribution center in Idaho.
To fulfill orders quickly without greatly increasing the cost of shipping, distribution centers should be located so that they reach a high percentage of customers (e.g. retail and grocery stores) within 1-2 days using ground transportation. Rather than have two separate distribution centers, one in an ideal location and the other not, now you can have both in the better location.
Lastly, a dual distribution center can positively affect the supply chain. When suppliers can ship goods to one single location, it minimizes the risk of damaged goods and is more cost-efficient.
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FoxArneson specializes in both design and building services for retail, grocery, warehouse and distribution centers.