Focus on order accuracy, OTIF (on‑time in‑full), inventory accuracy, pick throughput per hour, dock‑to‑stock times, and cycle count frequency. Include clear penalties/bonuses for SLA misses, visibility requirements (real‑time WMS access), and defined onboarding KPIs for ramping seasonal volumes.

Closer proximity reduces drayage and time-in-transit, enabling lower safety stock and faster replenishment. It also increases carrier choice, which drives rate competition. Evaluate actual drayage lanes, container turn times, and local congestion patterns to quantify landed cost savings.

Require racked and bulk storage, segregated ambient/refrigerated space if needed, WMS with real‑time APIs, pick‑and‑pack optimization, kitting, labeling, returns processing, and options for batch/automation to handle peak windows without service degradation.

Build a TCO model including inventory carrying cost, safety stock, transit cost per zone, expected service days, and stockout risk. Compare centralized savings on inventory vs. distributed reductions in last‑mile cost and delivery time; run scenarios for peak demand and SKU proliferation to inform placement.