Increased demand for industrial real estate—driven in part by pandemic-induced changes in how products are produced, purchased, and delivered—shows no signs of slowing down. In fact, Prologis, the real estate logistics firm, recently announced that it has entered into a definitive merger agreement to acquire Duke Realty, the leading U.S. industrial Real Estate Investment Trust (REIT), in an all-stock transaction. With this transaction, Prologis will gain high-quality properties in key markets, and affirm its alliance with the industrial sector.

Change within the industrial real estate sector isn’t by means limited to just acquisitions or mergers. The last few years have shined a light on the importance of omnichannel operations for manufacturers, distributors, and retailers of products across industries and categories.

Increased demand for goods fueled by the booming e-commerce channel forced businesses to think outside the box when it came to manufacturing, warehousing, and distribution. Faced with a limited amount of available industrial real estate, many retailers converted brick-and-mortar stores into mini-warehouses focused on supporting curbside pickup or shipping to other stores or residences. Now, consumers expect to shop for products online and then very quickly obtain those products via their channel of choice. They expect seamless options to learn about, order, pay for, and receive a product across online and physical spaces. And these same expectations have permeated all areas of commerce—B2C and B2B.

The Role of Digitization and Automation

While consumer demand for many products continues to grow, so do issues with supply. And the industrial sector—like most industries—is facing a skilled and unskilled labor crisis. As a result, many manufacturers are focused on digital transformation to solve for the inherent complexities brought on by omnichannel operations while also addressing labor shortages. But digitizing the factory is not just improving productivity or optimizing systems. Rather, it’s about creating new intelligence, new capabilities, and new ways of analyzing data to deliver a competitive advantage. Some of the biggest trends taking shape include:

• Implementing collaborative robots (or cobots), which are designed to share a workspace with workers and make it safer for workers
• Leveraging automation and artificial intelligence to better understand consumer demand, enhance production for greater profitability, and reduce reliance on highly skilled, hard-to-find labor
• Collecting data from plant floors of multiple facilities in a consistent way in order to enable real-time monitoring and on-the-fly operations adjustments

The Need for a Strong Digital Connectivity Foundation

Realizing the power of these trends impacting the industrial real estate sector requires manufacturing companies to have a sound digital transformation strategy in place, and an equally strong digital connectivity foundation in their facilities to support that strategy.  

Here are four factors for industrial CRE leaders or industrial facilities managers to consider:

1. Enabling automation means having the connectivity in place to support control systems, systems integration, and manufacturing controls providers.
2. Ethernet has become the de-facto platform for digital connectivity. It streamlines the process of connecting the devices, machines, and production lines required to create a digital factory and enable real time transfer of data across an organization. Newer technologies such as power over Ethernet and single pair Ethernet­­­ can support more devices at greater distances.
3. Wireless technologies (Wi-Fi and 5G) improve the ability to connect mobile devices today, such as cobots, and will further simplify deployments moving forward.
4. Time-sensitive networking (TSN), originating with AV communication, helps when applying Ethernet to more applications across industrial automation.

Download our solution guide, Network Infrastructure for Commercial Real Estate, to learn more about robust, reliable solutions for commercial real estate environments.

With end-to-end connectivity from the enterprise to the last edge device, Panduit is focused on providing infrastructure that’s needed to modernize manufacturing facilities. Learn more about them by visiting our commercial real estate solutions website and our industrial networks solutions website.