Distribution Network Design

Are you concerned that your transportation and warehousing costs are getting out of hand?  Is your distribution network a result of historical evolution as opposed to strategic design? Are you wondering whether it would make sense to outsource some of your logistics operations to 3PL providers? Are you writing off considerable sums of obsolete inventory now and again?  Are you able to meet the service requirements of your customers in different markets and product segments?

A distribution network design project addresses these issues:

  • Network design: Locations and sizes of warehouses, customer service requirements for those warehouses and outbound logistics startegies to meet the requirements.  Inbounds logistics considerations such as manufacturing locations and major sourcing considerations.
  • Inventory positioning: Determining optimal stocking points and inventory control mechanisms for different types of SKUs within your value chain in order to maximize your ability to meet service requirements and minimize risk of obsolescence and stocking out.
  • Value chain configuration: Determining the right points within your value chain to perform value adding operations such as production, assembly and packaging.  Creating a planning process to help you plan for capacity.

Sometimes it is useful to just lay open the existing distribution network and make the hidden costs buried in it visible.  This exercise may be the catalyst you need to create buy-in for a major distribution network reconfiguration project.