Supply chain and distribution network

A distribution network is a channel that a company uses to get its products from the manufacturer to the end customer.

Supply chain and distribution network

Onge Company, Paul Evankosenior vice president, St. According to Marc Wulfraat, the key question many companies are now evaluating is: At what point does it make economic sense to add more distribution facilities to reduce inbound and outbound miles?

Mike Jones, is also seeing the same changing business strategy scenario play out in many of the studies that his firm is doing. That desire to reduce inventory drove the consolidation of facilities. Now, with low interest rates decreasing the carrying costs of inventory versus the rising costs of freight, many have argued for more facilities.

Supply chain and distribution network

The more facilities you have, the shorter the lead times, the lower your outbound freight. However, the more important your inventory sizing and deployment strategy becomes. Paul Evanko, senior vice president, St. You can see what the incremental cost would be to add a facility that might yield a significant reduction in greenhouse gases.

Companies are becoming much more sophisticated.

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A good distribution network redesign encompasses a number of key areas of the business that all need to be considered and questioned. Wulfraat lists some of critical questions that need to be answered: What are the storage and throughput capacity constraints associated with my existing distribution network?

What perceived service level requirements are required for major markets being served in order to be competitive? If the delivery lead-time is changed then what is the anticipated impact on sales revenues for a given market?

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What are the logistics operating expenses, one-time expenses, inventory assets and capital investments required for the baseline scenario? How do these compare to alternative scenarios?MW PVL International is continuously developing insight in the supply chain, logistics, and distribution industry..

The topics that we write about are different because they are based on real companies that are doing real things to improve their businesses.

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Distribution Network Design is sometimes referred to as Logistics Network Design or Distribution Network Optimization. The scope covers the structure, or footprint, for distribution of finished goods from manufacturing and suppliers.

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