6 Critical Success Factors to Consider When Developing a Distribution Network Design Strategy

Distribution Network Design is receiving more and more recognition as a key driver of supply chain success. However, the process of designing an efficient distribution network is complex and implementing any change can impact the entire supply chain.URL : logisticsbureau.com

What steps would you take while designing distribution channels?

In this article we’ll outline 6 Critical Success Factors to consider when developing a Distribution Network Strategy, including the importance of understanding the current network.

To understand the current network, you need to have access to accurate data regarding the size and location of warehouses/DCs in your company’s distribution network as well as the types of products and customer orders that are stocked there. This information is crucial in building a model that accurately reflects the current operation of your current distribution network and can be used to compare potential alternative networks.

Next, you’ll want to build an “Optimized Baseline” scenario that represents a best-case scenario with the highest level of performance that can be attained within your existing capacity constraints (i.e., all inventory is located at the right place and in the correct quantity, cheapest transportation carrier always available, no unscheduled downtime in production or distribution centers, labor pool optimized for daily workload). This can help you identify potential operating cost savings that can be achieved with your current network.

Finally, you’ll want to maximize sustainability in your distribution network as a means of decreasing environmental impact. This is a judicious goal for new network designs, and a noble justification for reviewing and adjusting an existing one. However, focusing solely on this aspect of distribution network design can lead to costly mistakes.

Leave a Reply

Your email address will not be published. Required fields are marked *