When it comes to successful supply chain management, every piece of the puzzle matters. This is especially true when the process takes place on a global scale, as is the case with FedEx. Recently, the courier services company announced it plans to make a substantial investment in its facilities at a French airport.
FedEx Drives Forward in Distribution Strategy
According to Fortune magazine, FedEx plans to double its capacity at the Charles de Gaulle International Airport, located in Roissy, a suburb of Paris. The project has an estimated cost of $1.5 billion, though the majority of this price will go toward 30 years of rent. Approximately $220 million contribute to physical expansion, turning the Charles de Gaulle International Airport distribution center into FedEx's second-largest distribution center worldwide.
The project will add approximately 270,000 square feet to its already existing facility, which will lead to major developments in logistics at this location. This expansion has potential to open between 200 and 400 jobs in the area, as well. Construction will begin next summer, with a project completion date in 2019.
Maximizing Distribution Center Strategies
With such a large project to expand its Paris distribution center, it seems logical for FedEx to also consider revamping its internal processes at the location. After all, it's not the greater amount of space itself that contributes to enhanced efficiency but how supply chain management utilizes it.
According to Global Trade magazine, FedEx plans to do just that, and its new technology is expected to lead to a 40 percent increase in package sorting capacity. To do this, the company will integrate an automated sorting system for especially large packages. FedEx Express CEO and President David Bronczek believes additions like this will drive greater consumer satisfaction, maximize cost containment and make the supply chain more efficient, according to Globe Trade magazine.
"This strategic expansion in Paris is an example of how we will continue to invest to move goods faster and more reliably across borders, which means our customers can decrease costs, improve their supply chain and identify new opportunities for growth and profitability," said Bronczek.
According to Supply Chain 24/7, there are plenty of other ways companies like FedEx can maximize the capabilities of distribution hubs. For one, setting up vendor compliance programs can go a long way in reducing the handling of products, streamlining processes and increasing efficiency overall. A strategic relationship between vendors, partners and businesses involves having clear policies regarding labeling requirements, standard case quantities and other practices. Additionally, instead of relying on negative reinforcement, incentives offer a more effective way to ensure all stakeholders maintain terms of the agreement.
Supply Chain 24/7 also emphasized the importance of using a hands-free order selection process. Technology that makes picking more efficient and accurate can aid in overall supply chain effectiveness. For example, those involved in picking processes may benefit from using voice picking technology. This hands-free solution can improve productivity by 20 percent and lead to a potential 99.9 percent accuracy rate. This technology also cuts training time in half.
With any new development, it is important for those in supply chain management to look at the big picture and determine what adjustments can lead to the most positive overall change.