Changing customer demands depending on the situation

Commercial-geographic considerations form the basis for estimations about the direction of customer demand. One particularly important factor is delivery time expected by the customer. While the expected delivery time depends largely on cultural differences, the long-range direction of customer demand is shaped by demographic and political changes.

Customers’ various delivery-time requirements

Indicators showing which delivery times Delivery time from a warehouse location are realistic can be determined with iso-time diagrams - so-called isochrones. Isochrones help define time windows during which certain destinations can be reached. These time windows apply to potential locations of distribution and supplier warehouses. If, for instance, 24-hour service to distant parts of Europe is required, a shift from a central warehouse system to a decentralized warehouse system must be undertaken [1].
The delivery-time requirements in Europe vary considerably. As a result of geographic features, a distinction can be made between national, regional and central networks [2].

Delivery-time requirements and network types for various products

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Long-range direction of customer demand

Key economic figures such as population size or gross national product provide indications about the long-term direction of customer demand. For instance, population growth in a particular region can make it worthwhile for this area to produce goods that previously were delivered from other regions. A population decrease can have the opposite effect. In both cases, the flows of goods between the regions change. In addition, the sales of some goods in Europe reflect the differences in gross national product.
The direction of demand is also affected by political changes and integration efforts undertaken by countries. One important example of this is the European Union’s integration in the 1990s. With the widespread introduction of the euro, western European integration can be considered to be completed. Today, the momentum is being primarily generated by the opening of central and eastern Europe. The previous “banana” stretching from Birmingham to Milan - considered the optimal area for logistics property - is being altered by the European Union’s expansion, creating new corridors Corridor to the east [1].