World's largest electronics distributor, Digi-Key, celebrates 'supersize' expansion
The new facility allows Digi-Key to pick, pack and ship nearly three times the previous daily average of 27,000 packages to customers in more than 180 countries around the world.
Digi-Key Electronics, which offers the world's largest selection of electronic components and automation products in stock for immediate shipment, celebrated the ribbon cutting of its Product Distribution Center expansion (PDCe) today, expanding the company's headquarters' footprint by 2.2 million square feet for a combined total of more than 3 million square feet.
Digi-Key celebrated the opening event with an official cutting of tape from a Digi-Reel and ceremonial first package handoffs to each of the company's four carrier partners: DHL, FedEx, UPS and USPS. Remarks were given by Digi-Key President Dave Doherty, Minnesota Department of Employment and Economic Development (DEED) Commissioner Steve Grove, Thief River Falls Mayor Brian Holmer and several other Digi-Key executives, as well as video messages from U.S. Senator Amy Klobuchar and Minnesota Governor Tim Walz.
"This is a significant milestone for all Digi-Key employees and our community," said Dave Doherty, president of Digi-Key. "Our new product distribution center expansion will help us continue to deliver excellence to our customers for many years to come. As exciting as this expansion is for us, our hope is that our customers truly don't notice a difference – the transition for them should be seamless, and if anything, result in an even better customer service experience than they are already accustomed to. For us, it's deeper roots in Thief River Falls and a commitment to continue investing in this community and the state of Minnesota."
On August, 17, Digi-Key unveiled its new $400 million, 2.2 million ft2 distribution center to invited partners, customers and media members. Coupled with its existing facilities in Thief River Falls, Minnesota.
The PDCe building was designed by Minnesota-based Widseth, and McShane Construction served as general contractor on the project. KNAPP, a leader in warehouse logistics and automation, partnered with Digi-Key on the internal automation and operational equipment.
"The state of Minnesota is thrilled to celebrate Digi-Key's growth milestone today," said Steve Grove, commissioner of Minnesota DEED. "Growth at this level is a win for the employees of Digi-Key, it's a win for the Thief River Falls community and it's a win for the state of Minnesota. The opening of this facility is made possible by local and state economic support which will contribute an additional $500 million in economic output, as well as the addition of more than 1,000 new jobs."
The opening of the facility comes at a time of record growth for the company – Digi-Key wrapped up 2021 growing faster than ever before with a 65% growth rate, and bookings in 2022 are up more than 25% over last year. This year has also been one of the largest years for supplier additions for the company with 250 suppliers already added for the year. Since construction began in 2018, Digi-Key has added 1,500 suppliers and 1.5 million part numbers to their inventory.
The new facility is nearly fully automated, the only task that is truly done by hand is the actual picking of parts. Among the racks of components, carts are wire-guided so that the only thing a cart driver will have to worry about is where to stop. The wire-guided system will save more than 10% of time and is significantly safer.
The product distribution center expansion features two primary conveyor systems to provide redundancy in the case of a breakdown and provide opportunities for future growth. Scalability and growth were top of mind in the plans and design of the new building, and the majority of the fourth floor is currently open for the time being. There are over 27 miles of automated conveyor belt in the new facility, and an average order will travel more than 3,200 feet inside the building.
The building features six backup diesel engines and pumps along with a water tank built for fire suppression. It also has its own storm sewer and run-off ponds so as not to contribute to any flooding or storage concerns in the community.
The state-of-the-art facility features multiple common work areas and break rooms with oversized windows for optimal natural sunlight, as well as the Two Rivers Café that features a range of food options from ready-to-eat salads and wraps to burgers and paninis cooked to order. Local vendor, Las Ranitas, serves authentic Mexican options from the café a couple days per week as well. Digi-Key is recognized by the state of Minnesota as a Breastfeeding Friendly Workplace and has 16 private Mother's Rooms throughout the PDCe for employees returning to work after parental leave. The building also has a spacious Quiet Room for employees to take their breaks, relax and recharge.
Outside of the new building there is a new Community Garden where employees can adopt a plot for the summer and plant seasonal flowers, fruits and vegetables. In the Skybridge connecting the original PDC to the PDCe building there is a "Digi-Walk" mapped out from end to end, offering a great place for employees to get in some extra steps during their breaks.
Sustainability was also considered during the planning and construction of the facility. The roof has a white membrane to reflect the sun's heat, sensor-activated LED lights to minimize electricity usage, and a specially designed conveying system which maximizes energy usage as well as efficiency.
To learn more about Digi-Key, visit the Digi-Key website.
About Digi-Key ElectronicsDigi-Key Electronics, headquartered in Thief River Falls, Minn., USA, is recognized as both the leader and continuous innovator in the high service distribution of electronic components and automation products worldwide. As the original pioneer in this space, Digi-Key provides more than 13.4 million components from over 2,300 quality name-brand manufacturers with an industry-leading breadth and depth of product in stock and available for immediate shipment. Beyond the products that drive technology innovation, Digi-Key also supports design engineers and procurement professionals with a wealth of digital solutions and tools to make their jobs more efficient.
Digi-Key Electronics was busting at the seams when it began planning a 2.2 million-square-foot, $400 million expansion in 2017.
Now, as the Thief River Falls company on Wednesday showed off the new space, one of the 10 largest warehouses in the country, it is growing at a pace that will outgrow the current addition in the next decade.
"Today is clearly a celebration," said Dave Doherty, Digi-Key's president, at a celebration lunch. "But this book is far from over."
In 2016, Digi-Key had annual sales of $1.86 billion and 3,200 employees. Annual revenue last year was $4.7 billion, and the company now has about 5,200 workers, 3,600 of whom work in Thief River Falls in the northwest corner of the state.
Digi-Key is a distributor of electronic components and automation products offering more than 13.4 million products to more than 857,000 customers each year in 180 countries.
"What's unique for us is we deliver lots of small shipments everywhere," Doherty said in an interview before the celebration for dignitaries and the community. "This model is about having inventory and having high service levels to get out the door."
Doherty refers to Digi-Key as a "broken pack" distributor. That means it takes any size order, including small custom jobs that many suppliers cannot handle.
The company began 50 years ago as a mail order catalog business. Thief River Falls remains Digi-Key's largest location, with additional support and distribution facilities in Fargo and a dozen other cities across the world.
The new building — which is the size of 22 football fields — will allow Digi-Key to not only ship more products but also offer more services to their customers and suppliers. The new building has automation built in as well, eliminating the long walks workers had before to fulfill orders.
Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development, attended the grand opening as part of his "Summer of Jobs" tour and later held a panel discussion on the area's economy at Digi-Key's next-door neighbor, Textron's Arctic Cat facility.
"It's a unique regional economy that I don't think a lot of Minnesotans know about, " Grove said in an interview before events on Wednesday.
One big impediment to the Thief River Falls companies — and others in northwest Minnesota including Marvin in Warroad, Polaris in Roseau, and Altoz and Central Boiler in Greenbush — is promotion. People might not know about the job opportunities.
The effort to sell Minnesota more broadly, similar to efforts in South Dakota, Nebraska and Wisconsin, is critical, Grove told the audience Wednesday.
"We advocated last legislative session to get DEED's first-ever marketing budget for talent, attraction and promoting our state to business," Grove said. "We're just not in that game."
Thief River Falls expansion
22 football fields: Size of new Digi-Key warehouse
4: Number of stories
27: Miles of automated conveyor inside the building
$400 million: Cost to build complex
$40 million: State of Minnesota grant for job creation
640: New jobs added since construction started
1,700: New parking spots added
