Why 59% of Manufacturers Prioritize Warehouse Proximity, but Only 35% Are Within 10 Miles

In WSI’s 2026 manufacturing survey, 59% of leaders said physical proximity between the warehouse and plant was “very important.” Yet only 35% had their primary facility within 10 miles of production. 

The two figures make warehouse network proximity worth a fresh look for any manufacturer working with an inherited footprint. Distributed manufacturing warehousing, which places different inventory in different locations based on the work each site performs, is one way to respond. Whether it fits depends on what moves between the warehouse and plant, how frequently it moves, and how much delay production can absorb.

These are separate measures for the survey population. The findings do not establish how many respondents who prioritize proximity meet their own distance target. They do, however, make warehouse network proximity a relevant question for manufacturers assessing whether the inherited footprint still supports the business. 

The answer depends on what moves between the warehouse and plant, how frequently it moves, and how much delay production can absorb. 

What proximity means for production 

A short replenishment route can support frequent deliveries and quicker responses to schedule changes. When materials are consumed throughout a shift, distance influences how many delivery cycles can be completed and how much stock must remain at the plant. 

The useful measure extends beyond mileage. Gate queues and receiving hours can make a nearby warehouse difficult to use. A somewhat longer route with dependable access may offer better service than a shorter route with unpredictable delays. 

The survey’s 10-mile measure is a reference point, not a universal design standard. A plant receiving high-frequency component deliveries has different requirements from a facility holding slow-moving finished goods. For the first, elapsed replenishment time may be critical. For the second, access to customers or rail service may carry greater weight. 

Warehouse network proximity therefore needs a defined purpose. “Close to production” becomes useful when it translates into a replenishment commitment the warehouse and transportation arrangement can consistently meet. 

Warehouse and factory real estate are changing the calculation 

Current industrial market conditions show why suitable nearby space cannot be assumed. CBRE’s Q3 2026 report put national industrial vacancy at 6.4%. Year-to-date construction deliveries were 17% below the comparable 2025 period, even as space under construction increased. 

A national vacancy rate says little about whether a suitable building exists beside a particular plant. An available warehouse may lack the floor capacity or handling infrastructure a commodity requires. Nearby space may also compete for the same labor pool as production. 

Factory investment adds another consideration. Census Bureau data published through FRED placed manufacturing construction spending at an annualized pace of about $170.7 billion in August 2026.

The logistics requirements attached to those projects develop on their own timelines. A plant can have a confirmed production schedule while suitable offsite storage remains unresolved. Buildings also require staffing and system connections before they can support a launch. 

The issue is visible in WSI’s survey: roughly a third of respondents were adding US warehouse capacity to support reshored production (35%) or repositioning facilities closer to new manufacturing locations (34%). The survey findings suggest that warehouse placement is already part of manufacturing investment decisions. 

Why the existing footprint persists 

Warehouse networks often reflect a sequence of reasonable decisions made at different times. One building accommodated an acquisition. Another provided inexpensive overflow space. A long-term lease preserved capacity during an earlier shortage. 

WSI found that 75% of respondents agreed their networks evolved organically rather than being designed strategically. That network history helps explain why a facility can remain useful while its location becomes harder to justify. 

Moving also has real costs. Specialized equipment and trained employees cannot always be transferred quickly. A manufacturer may need parallel inventory during a transition, adding temporary expense before the new arrangement produces value. 

As Paul Simmons, president of WSI, observed in the survey report, “The warehouse competes with the plant for capital, for management attention, for skilled labor.” 

The implication is a need for deliberate review. A facility’s continued availability does not establish that it remains the best place for every inventory category. 

Where distributed manufacturing warehousing fits 

Distributed manufacturing warehousing assigns inventory to multiple selected facilities according to the work each location needs to perform. It can combine production support near a plant with finished-goods distribution closer to demand. 

This allows proximity to mean different things within one network. Critical components may need a short, dependable replenishment route, while customer-facing stock may benefit from a regional distribution point. 

Inventory or network requirement	Location priority	What must support the location
Components consumed frequently by production	Dependable travel time to the plant	Replenishment schedules, inventory accuracy, and coverage during production hours
Finished goods serving regional customers	Access to customer demand and outbound routes	Suitable inventory allocation and carrier availability
Bulk materials arriving by rail	Rail access with a workable connection to production	Unloading capability, storage suitability, and coordinated final delivery
Inventory with specialized handling requirements	A qualified facility within an acceptable service radius	Appropriate equipment, trained employees, and product controls
Seasonal or temporary overflow	Capacity that preserves the main warehouse’s throughput	Defined transfer rules and visibility into available stock

Additional locations also add expense. Inventory can become fragmented, and interfacility transfers can consume expected savings. A distributed network needs enough benefit from each location to justify those obligations. 

Transportation pressure makes the tradeoff visible 

Manufacturers’ associations provide further context for evaluating distance. In its Q3 2026 Manufacturers’ Outlook Survey, the National Association of Manufacturers reported that 77.3% of respondents cited freight rates as a challenge and 74.1% cited fuel costs. 

Those findings support scrutiny of repeated warehouse-to-plant movements. A location with a lower storage rate can require longer shuttle routes or additional equipment to maintain the same replenishment frequency. 

The comparison needs all service requirements. Relevant costs include facility occupancy, transportation, and inventory carrying expense, along with handling created by transfers. Premium freight and production interruptions should be evaluated as risks using the manufacturer’s own history and planning assumptions. 

The nearest building will not automatically produce the lowest total cost. The objective is a location and service model that supports production at a sustainable expense. 

Proximity supports resilience when the handoffs work 

Manufacturing supply chain resilience depends on the ability to respond when demand changes or an expected movement fails. Nearby inventory can shorten that response, provided it is available for use, and the warehouse can release it promptly. 

That requires accurate status information. A material on quality hold should not appear ready for production. An urgent request needs a defined escalation path, and the transportation arrangement must match the required response time. These controls connect location strategy with manufacturing inventory control. 

Geographic separation can also support recovery from a local disruption. Two nearby facilities may share exposure to the same weather event or access restriction. A production-support warehouse and a regional reserve location can serve different resilience needs, depending on the product and replenishment window. 

The right distance depends on the job 

The 59% and 35% findings make a useful starting point for reviewing whether warehouse placement supports manufacturing priorities. They do not prescribe one radius or require every manufacturer to add sites. 

The strongest case for distributed manufacturing warehousing begins with the inventory and the service it must support. A successful network gives each facility a clear role, with travel times and inventory controls that make that role achievable. Proximity then becomes a measurable contribution to production continuity and customer service, rather than a favorable location on a map. 

Frequently asked questions

What is distributed manufacturing warehousing?

Distributed manufacturing warehousing assigns inventory to several selected facilities based on the work each location performs. A network might keep production components near the plant and hold finished goods at a regional distribution point closer to customers.

How close should a warehouse be to a manufacturing plant?

It depends on what the warehouse supplies. Components consumed throughout a shift usually need a short, dependable replenishment route, while slow-moving finished goods may be better placed near customers or rail service. In WSI’s 2026 survey, 59% of manufacturing leaders called proximity very important, and 35% had their primary warehouse within 10 miles of production. Ten miles is a useful reference point, but the better measure is the replenishment time production needs.

How does warehouse location affect supply chain resilience?

Nearby inventory can shorten the response when demand changes or a shipment fails, as long as its status is accurate and the warehouse can release it quickly. Geographic separation matters too. Two nearby sites can share exposure to the same weather event, so a production-support warehouse paired with a regional reserve location can cover different risks.