How to Design a Distribution Network That Meets Your Business Needs

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The distribution network is receiving more recognition as a key element of market success. It’s a place to optimize customer service and flexibility while minimizing operating costs, capital investment and risk. It can be challenging to align this infrastructure with changes in business strategy or growth plans and justify the associated costs.

What is distribution in design?

A successful distribution network starts at the post-manufacturing phase, and includes all stages that deliver final products to consumers. Logistics Bureau Distribution Network Design requires strategic planning and specialized supply chain management and logistics capabilities. A company must determine whether a hub-and-spoke or decentralized distribution network is right for their product, how to manage warehouse space and inventory and what type of transportation fleet is optimal for the specific application.

This process requires a lot of data – from the location of your customers to a detailed breakdown of order sizes, frequencies and quantities. The most critical first step is building a baseline model that accurately reflects current operations and capacities. A good consulting partner can provide access to the tools needed, as well as the expertise and experience of people who design networks on a regular basis.

Once a baseline model has been built, the next step is to perform an optimization. This provides a picture of how the network could operate under perfect conditions (all inventory is at exactly the right locations, cheapest transportation carrier is always available, no unscheduled production line or distribution center downtime, etc.). The resulting optimal results are a good indicator of the potential savings to be realized by changing your current network.

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