Location
DISTRIBUTION CENTERS
WHY
Why Location standards are important
The location of a Distribution Centers is critical to the success of Nike Supply Chain's operational goals. A site's position amongst a connected, labor-rich community, it's ability to to support efficient product flow, and it's potential to reduce sustainability impacts are high priorities for Supply Chain looking towards 2030.
These Location Standards have been designed to provide site selection guidance for new Distribution Centers, as well as help understand the makeup of new/improvement opportunities for existing sites.
Below are the outcomes the Location Standards will support:
Strategic Approach to Planning
Optimizing seamless flow for both pedestrians & vehicles, particularly through the lens of shift changeovers.
Attract and Retain Talent
Creating a healthy, pleasant work environment for Distribution Center employees.
Understanding the impact of the Distribution Center's location on employee commutes, providing support as required.
Decarbonize
Logistics
Understand ideal location that optimizes logistics routes.
Maximize sustainable opportunities in and around the site including natural energy sources, building orientation and design.
Optimize Consumer Experience
Supporting Supply Chain's goal of delivering on its consumer promise through a location with logistic routes that support consumer demand and achieve speed of delivery.
Explore Location Standards:
Location Principles
In order to achieve the intended outcomes listed above, the Location Standards will focus on the following principles:
01
Well-resourced
A ready labor supply and consumer demand within surrounding communities.
02
Hyper-connected
Connecting the Distribution Center to the wider network to support efficient product flow.
Prioritizing locations that support seamless employee commutes.
03
Sustainable
Leveraging local ecosystems and conditions to minimize operational impact.
HOW
Process of Distribution Center site analysis
In our Distribution Centers we encourage prioritizing sites that best support the detailed criteria within the following sub-categories: 'Understanding the Community', 'Understanding the Site', and 'Understanding the Future'.
The following steps are a guideline to understand how to best leverage site opportunities and support Supply Chain operational goals.
1. Understand the Community
Context analysis
2. Understand the Site
Site analysis
3. Understand the Future
Future risk analysis
- Contextual analysis to ensure the site is well supported by its community and location
- Site analysis to understand site potential and identify opportunities, benefits, and risks
- Preparing for future risk and scenarios to maximize longevity and success of the DC
Note: During initial decision-making, work alongside Supply Chain to understand the business case, purpose, and goals
The following considerations must be taken into account as part of this Location Analysis process:
| Logistic Routes | Work alongside Supply Chain to review efficiency of logistic routes from site. |
|---|---|
| Ecosystem Analysis | Work alongside Supply Chain to ensure the proposed site of any new Distribution Center is an appropriate fit within the existing ecosystem of Nike Distribution Centers accommodating for growth. |
| Storage | Work alongside Supply Chain to understand storage needs and size / qty of trailers on site to inform masterplanning inclusions. |
| Mobility | Working alongside the Mobility capability for early Mobility intervention is critical to their success. |
| Supporting Capability Standards - Mobility | Integration with Mobility strategy and requirements. |
| Supporting Capability Standards - Built Environment | Integration with initial Built Environment planning strategy. |
WHat
Guidance for Distribution Center Locations
When selecting a location for a Distribution Centre, we recommend that the following criteria are
considered and adhered to where possible.
Site Opportunities
Understand the Community
Contextual analysis to maximize integration into and support from local community
Developments/Funding
- Partner with local authorities to understand local planning / community initiatives
- Understand existing / pipeline developments in the area
- Understand tax implications of the area
- Understand and leverage any existing government incentives for the area
Talent Supply
- Leverage data and analytics to understand labor supply
(Example: local demographics, suitability of local skills, labor history, labor coming into market) - Ensure demographics of community meet labor needs of DC
(Example: assess percentage of robotic engineers vs. manual workers) - Develop partnerships with local community to raise awareness of logistics center amongst future talent
- Invest in surrounding educational institutions that support desired worker profile
Competitor Research
- Understand competitors in area and their competitive features
(Example: wages, benefits, work environment, amenities, scholarships, culture)
Understand the Site
Site analysis to understand site potential and identify opportunities and benefits
Proximity
- Map proximity to surrounding Nike DCs in the event of temporary DC closure
- De-prioritize sites that cause inefficiencies in economics (i.e. not on a logistics route
Masterplanning
- Understand opportunities for site planning
(E.g., best position for sports facilities, point of arrival, natural light exposure, views, security, general access) - Prioritize sites with optimal storage space/facilities to minimize quantity of truck runs
- Undertake scenario mapping exercise to ensure site is able to accommodate shift rush prior to DC go-live
- Maximize energy efficiency
(E.g., consider building orientation to reduce solar heat/gain, reduce potential heat/cooling loss at warehouse and loading docks)
Sustainability
- Prioritize sites with access to low-carbon shipping routes
- Prioritize sites with renewable energy sourced in region/ability to produce on-site
- Prioritize sites with opportunities to nourish and increase, not just maintain biodiversity
Understand the Future
Preparing for future risk and scenarios to maximize longevity and success of the DC
Flexibility
- Understand commitments and liability limitations of potential lease commitments
(E.g., number of years, opportunities to extend) - Understand flexibility of site boundaries and / or opportunities for future expansion
Risk Mitigation + Continuity
- Refer Global Hazard Mitigation Standards and work alongside Nike's Global Resilience Team to identify and plan around potential site hazards prior to DC go-live
- Work alongside Nike's Business Continuity Team to develop continuity plan prior to DC go-live
- Understand opportunities for site to be independent from external energy grids
Security
- Understand physical security required for site and occupants based on area and local regulations / safety law