distance affects delivery delay of supplies between stockpiles/modules connected by a delivery system. so it's similar to current system, but much faster and doesn't require hundreds of crew.
but the main advantage to automated delivery systems, is that players can actually centralize their reactors to a heavily protected core of their ship.
this means that the essential core parts of the ship would be well protected and tougher to crack, unlike the more exposed exterior parts. this will work well with deadlier weapons and emphasis on dodge maneuvers rather than solely on damage tanking.
this way, even if the weaker exteriors get ganked by the deadlier weapons, the inner core of the ship can still attempt to escape and get itself repaired and retrofitted with replacement guns.
ship repairs/retrofitting can be done easily. just tag your ship for repairs and a ship designated as a repair ship will approach it and start the repairs. (don't tag your ships currently engaged in combat for repairs, otherwise you expose your repair ship to enemy attack. ships currently engaged in combat should rely mostly on repair crew already in that ship's roster for minor repairs)
repair ships have weapons and ship part stockpiles (usually taken from production ships). the repair crew will take those items and deliver them to the ship that needs repairs to replace any destroyed parts. usually via EVA (extra vehicular activity) in their space suits.
for parts that only need minor repairs, most ships already have their own repair crews in their roster, and they will automatically repair those parts over time.
