Supply chain network design aims to analyse and design the infrastructure of the supply chain network (production and distribution) which best fits the supply chain strategy. The aim is to optimise both the level of service towards your customers as well as cost of the supply chain.
Most supply chains are a result of legacy operations and strategic choices, not designed to drive value for an organisation in the future.
Whilst these supply chains are sometimes “good enough”, the rapidly changing business environment and growing complexity of many businesses and their supply chain networks make a strong case to step back, define and then implement the optimal network configuration and operational characteristics.
Signals suggesting room for improvement of the supply chain network tend to include:
A network optimisation is a modeling-led activity that defines the physical ‘shape’ and high-level operational characteristics of a distribution network. It is different to operational modeling in a way that it deals with a longer time horizon (3-5 years) during which answers to key strategic questions are to be provided.
It helps organisations create a robust solution that balances all of the strategic objectives, while considering all constraints and inputs to drive profitable revenue growth, increased operating margin and increased asset turns.
Dependant on company objectives and constraints, a network design study can be used for different sections of the supply chain; upstream, downstream, or different product segments. Experience shows that network design can drive client's performance in a wide range of different industries.
On past engagements our team has realised reductions in operating costs of up to 15%. This was done after analysing the current network design of our clients and consequently defining and implementing the optimal supply chain network.