Optimize Supply Chain and Distribution Network
Optimizing the distribution network is an important activity for manufacturers and distributors of products. Computer-based modeling tools and projects to determine the right number and locations of distribution centers (and less frequently, where plants are located) have been successfully employed for decades. They continue to have value, and we recommend that companies re-analyze their networks every several years as business conditions and transportation costs change. We have conducted these projects with many of our clients.
But there are deeper issues of supply chain design that companies must also evaluate if they aspire to an optimal supply chain:
- What are the relationships with the significant suppliers, and what do we expect from them?
- Should suppliers be holding ready inventories of materials near (or at) our plants, to support our Produce-to-Demand operations?
- Do we have the right inventory strategy across purchased materials, work-in-process, and finished goods, to achieve the lowest cost and working capital supply chain possible for our material flow and customer service requirements?
- Does our distribution network perform the right activities? E.g. just warehousing and customer fulfillment, or some level of final assembly or packaging? Are locations optimized for the right combination of pallet picking, case picking, and cross docking?
- Do we have the flexibility and robustness built into the supply chain to accommodate disruptive weather, transportation availability problems, and political unrest?
- Have we thought of the best supply and distribution network alternatives, or do we need help conceptualizing them?
- Have we updated our near-term product flow planning to be consistent with the needs of our network? For example, a recent client had shifted their manufacturing strategy from full product line plants to focus plants without changing how they planned seasonal inventory builds and drawdowns – a significant omission.
In our experience with clients, conceptualizing the best feasible alternatives is actually the most difficult part of supply chain optimization, because it takes a larger perspective than most internal management teams have and knowledge of which current supply chain ideas (and buzzwords) are appropriate for a given business. Moore & Associates is available to bring this kind of deep expertise to clients.