Over the last decade, distribution centres (DCs) in Australia have become much more advanced with automation in response to this era of immediacy and the rise of online shopping. 

This has led to the construction of complex large-scale DCs across the country that have brought in leading-edge equipment from automation suppliers across Europe and Asia.

From a warehouse with autonomous mobile robots (AMRs) to a fully automated high-bay DC, no matter the scale of the automation there are inherently immense variations and risks in the construction.

These risks range from the bespoke requirements of the automation, adapting highly advanced overseas equipment to Australian building standards and the procurement structure between the builder and automation supplier.

The investment in these automated facilities is significant and with more organisations looking to invest in automation from the rapid acceleration of ecommerce from COVID-19, they need to understand how to coordinate these projects to ensure costs do not blowout.

At TMX, we have designed and delivered some of the most significant automated DCs in Australia for the likes of Snack Brands, Woolworths, Coles, Symbion, Teys and Hilton Foods. In some of these projects we are coordinating 22 different suppliers for the automation alone, with the site peaking at 400 staff.

Through our experience we have learnt the key fundamentals in successfully delivering these projects.

The right procurement structure

Automated distribution centres are huge capital value projects and an organisation needs to understand what responsibilities to contract to the builder and to the automation supplier.

In Australia, we typically see the builder and automation supplier contracted separately. It is vital that responsibilities are set out in advance and the two contracts are structured with the right forms and terms that ensures the builder and automation supplier work together to minimise risk.

In many cases, we are able deliver these projects faster locally using Design & Construct & Prelease procurement. With these complex contracts come significant risk that can result in disputes. This can result in time delays, design quality issues and cost blowouts.

There must be strong documentation and processes that bind each party to coordinate collaboratively throughout the project. Once these processes are documented, they then can be incorporated into solid contracts for procurement of the builder, developer and automation supplier.

An international mindset

I’m an American who has studied in Australia and Europe and have worked most of my career in Australia. Throughout my career on projects and on building sites while communication has always been in English we might as well have been speaking a different language. The nuances in building, construction and automation terminology are different in each country.

The leading automation in the world comes from a multitude of countries across Europe, Asia and North America, with each using their own terminology and in different ways.

It is vital for projects here in Australia, that we have an international mindset and can listen and understand practically the scope of each party. This will ensure schedules and priorities are aligned and any issues are able to be addressed beyond a surface level of understanding.

Understanding Australian building conditions

With most automation suppliers being international to Australia, they must also understand Australia’s unique building conditions and high safety standards. Australians are world leaders in construction safety, with many overseas suppliers not used to our stringent safety requirements.

Additionally, international suppliers must educate themselves on the workings of industrial relations in Australia, which is different in each state and impacts labour.

In conclusion, these large-scale bespoke buildings with advanced technology are an immense investment and to avoid time or cost blowouts, the delivery of these projects require proportionate investment with stringent planning, coordination and localisation.

 

Andrew Johnsen is a Project Director and General Manager of Victoria at TMX, a specialist property and supply chain consultancy. Over his 20-year career, he has delivered a broad spectrum of complex projects from industrial automation to laboratory facilities. Andrew holds a Master of Project Management and a Master of Business Administration.