• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • BLOG
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Designing Supply Chain Networks the Right Way

Designing Supply Chain Networks the Right Way

JanFeb16_Cover_SM_25.gif
March 4, 2016
SupplyChainBrain

Today's leading computer models are accommodating multi-echelon networks, with thousands of SKUs, and with nodes and links totaling in the hundreds of thousands. Further, the traditional problem of data availability is also not as limiting of a factor, since most companies have "Big Data" files that exceed the basic requirements of network models - data on products, sales, customers, orders, costs, freight and facilities. What is missing in most network planning, is conducting these projects with the business objective of strategic action-oriented designs.

Following are innovative practices for effective network designs:

• Design networks for decision-making. The operations strategy, with its required operational capabilities, should drive the network design for the enterprise. A multifunctional team should direct the work so that it produces the right business solution.

• The business objectives should drive the analysis. Include the operational capabilities, and the missions and functions of the needed facilities, along with the preferred flows of goods. Set overall targets for inventories.

• Instead of incorporating only the normal costs of outbound freight, warehouse operations, and inventory carrying, also include all inbound freight, real estate, order processing, planning and management, and taxes.

• Apply advanced analytics to the data. “Big Data”, while often including all that is needed to model the current state, is often not organized for network designs, nor is it analyzed for reasonableness and relevance. Analytics can yield insights that help define realistic scenarios.

• Design scenarios that address the supply chains. The real value of network design is found in its ability to meet the business strategies of the enterprise. Whatever these are - in markets, products, and product value propositions - must be delivered (enabled) by the supply chain networks. This means that scenarios should include DCs, FCs, cross-docks, alternative storage locations, and creative product flows.

• Traditional network planning has been designed to meet specific service levels at total minimum logistics costs, given sales forecasts. But, the real question should be, “how to set up the network to impact customer satisfaction, while operating at expected cost levels?” This objective requires advanced analytics to help frame the scenarios around what is possible, not what is forecasted to be needed.

• At least 3 to 5 business scenarios should be examined before selecting the right one for a company. Once the preferred scenario is clear, the business case should include value-based metrics that incorporate the “balanced scorecard” - i.e., financial as well as operational measures. Total investments should be clear, as well as estimated paybacks, along with expected total costs and margin implications, and expected revenue gains. These should all tie to the company financials and link with the business strategy that drove the network design. The risks should also be defined and mitigated.

The Outlook

Network designs in 2016 and beyond should be planned and produced much differently than those three years ago. Today, the right way takes into account the primary gaps and addresses the advanced principles that resolve the gaps and mitigates the risks. This will produce action-oriented network improvements that will satisfy and grow the customer base and thus can differentiate a company. We can expect to see more network designs, and hopefully more strategic and action-driven ones.

RELATED CONTENT

RELATED VIDEOS

Technology Transportation Management Logistics Consumer Packaged Goods Logistics Outsourcing Transportation & Distribution
KEYWORDS consumer packaged goods distribution network Executive Vice President Gene Tyndall Logistics Logistics Outsourcing logistics services Supply Chain Management Supply Chain Management: Network Design supply chain network design Technology Tompkins International Transportation & Distribution Transportation Management
  • Related Articles

    The Importance of Network Design to Supply Chains

    Network Design in the Supply Chain

  • Related Events

    Supply Chain Talent in the Digital Age

  • Related Directories

    Kuebix

SupplyChainBrain

100 Great Supply Chain Partners Issue 2009

More from this author

Get regular updates!
Subscribe to our newsletter

Enjoy curated articles directly to your inbox.

Popular Stories

  • 1209_themarketforlogistics

    How an Investment Banker Views the Market for Logistics and Supply-Chain Tech

    Technology
  • 1115_chinarareearthminerals

    Podcast | Can China’s Monopoly on Rare Earth Minerals Be Broken?

    Sourcing/Procurement/SRM
  • 1111_makeorbreakblockchain

    The Element That Can Make or Break Blockchain for the Supply Chain

    Technology
  • 1125_themodernfactory

    The ‘Modern’ Factory Remains a Dream for Many Manufacturers

    Technology
  • 1118_howconsumerproductscompanies

    How Consumer-Products Companies Are Wasting Their Digital Spend

    Technology

Digital Edition

55746

Subscribe today and receive the latest issue

Start Your Subscription

Case Studies

  • Locus Robotics Helps E-Retailer Deliver During Holiday Peak

  • Manufacturer Slashes Shipping Costs With AI Packaging Solution

  • Apparel Retailer Saves $45 Million With Reverse Logistics Solution

  • QuestaWeb Configures Fragrance Company’s Complex Procedures Into Its Advanced FTZ Software

  • Business Turnaround: Integrated Business Planning as a Management Tool

Visit Our Sponsors

  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • Webinars
  • The Magazine
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • 100 Great Partners Form
  • Resources
    • Newsletters
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us

All content copyright © 2016 - 2018 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing