No Long-Term Parking

Manufacturers' warehouses used to be sleepy places wherefinished goods waited around in dusty cartons. But no more.Today's distribution centers are beehives of activity wherefactory-fresh products may alight for only hours before shuttlingoff via high-speed conveyors to trucks headed directly for salesfloors.

Driving this change are the twin trends of lean retailing andproduct proliferation. You can see product proliferation everywherefrom grocery stores, which typically stock more than 49,000items-three times as many as 20 years ago-to onlinesuper-retailers such as Amazon.com and Buy.com that offer more than1 million stock-keeping units apiece. The other trend, leanretailing, is retailers' effort to shift onto manufacturers anincreasing share of the burden of product tracking and storage.Another development is too recent and, perhaps, too transitory tocall it a trend. As increasing border inspections aimed at keepingterrorists out of the United States add serious delays for goodscrossing the borders, it's even more difficult forentrepreneurs who import materials to meet inventory requirements.Add them up, and the old way of managing manufacturing is becomingunaffordable for an increasing number of manufacturers large andsmall.