Wednesday, December 28, 2016

Factors That Influence Distribution Network Design

By Carl Cox


Supply chains have greatly evolved over the past few decades. The modern logistics manager is now faced with competitive pressures, extensive product lines and greater expectations from customers. The manner in which these changes are handled by businesses could mean the difference between survival, burnout and even extinction. So whether you're seeking to tweak your business strategy or control costs, you need to keenly adhere to the various elements that affect distribution network design.

The unpredictable elements that characterize the modern business environment must be taken into account while developing a distribution network. Here, you need to take into account both planned and unplanned events that may have an impact on your operations. Perhaps the biggest inhibitors to flexibility are the equipment and operations that support the supply chain. The capability to exploit emerging channels and uphold efficiency can only be acquired with versatile resources. So even if it means putting up with some hiccups in the short term, carry out the radical changes required to update your distribution facilities and tools.

In a global marketplace, it's always important to have the right product, at the right place at the right time. After all, this is what a demand-driven supply chain is about. Successful firms have focused on an end-to-end strategy that streamlines the flow of both incoming raw materials and outbound finished products.

As you may be aware, laws from all levels of government greatly impact supply chain operations. And it's the responsibility of business executives to learn these policies and how they affect their respective niches. Taking up an active role in legislative processes is also required in order to track regulations and make your concerns known. Being proactive is the best way to know what policies will positively (or negatively) impact on your own logistics operations.

Paperwork and keypunching in daily distribution activity are not only tedious, but also lead to errors. This is far from ideal, especially in logistics, an area where timely and accurate information is always required. The best solution would be a paperless system that enforces protocol in addition to ensuring that the right products are picked and packed. Your firm would greatly benefit from standardized, industry-tailored programs that can support the high growth associated with a successful distribution operation.

Businesses that aren't able to speedily fulfill orders can't be competitive for long. An efficient, quick supply chain is highly critical, especially in this digital era. From vendor compliance to execution systems, your entire logistics network needs to keep pace with current e-commerce speeds. Streamlining your distribution nodes would greatly help in matching your clients' expectations. Besides, you'll be better placed to account for the increased inventory turnover, short product lives and other elements that characterize modern commerce.

Upholding accountability within a logistics department is critical for a number of reasons. And this requires establishing performance benchmarks, exploring improvement opportunities and constantly tracking resources. Also necessary is a form of reward for exceptional performers. However, care must be taken that any incentives are tied to something that benefits the entire organization.

No matter how well-designed, a distribution network will start to show signs of age as time goes by. Regular optimization is thus needed to create streamlined delivery processes. And to pull this off, you need to gather some data and develop models suitable for your own entity, since no two supply networks can be identical. To ensure you get the right results, it would help to engage an experienced consultant throughout your project.




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