Strengthening your supply chain one link at a time. 

Is Your Distribution Network Prepared for Future Uncertainty?

It seems that the only thing certain in the future of supply chain is uncertainty.   Is your supply chain ready for uncertain events of the future?  Is your supply chain strategically designed for resilience and sustainability?

The last 5 years have seen a global pandemic, violent attacks on major shipping lanes, unexpected shifts in market forces, natural disasters, port closures, and many other such events at a seemingly increasing pace.  The question is not whether these external factors will continue to occur but when and to what degree it will affect your supply chain.  Coupling the unknowns with more normal business considerations of demand forecasts and the adoption of progressive technologies, it is crucial to be prepared for what lies ahead.

Perhaps it has been a while since the last strategic network analysis, or you’ve never engaged supply chain modeling experts to do a full study of your distribution footprint.  If that’s the case it may be time to get up to speed with a network analysis complete with a robust network modeling effort.   Such an analysis is important for being able to effectively service business growth, reduce costs, improve service times, mitigate risk factors, and plan for a host of possible contingencies.  Common “what-if” scenarios that are evaluated as part of a modeling effort may include but are not limited to the following:

1. Greenfield analysis to understand the best number and location of distribution nodes.
2. Maintain existing nodes with one or more additional nodes in optimal location(s).
3. Identifying which distribution point(s) should be removed from the network.
4. Analyzing opportunities for direct plant shipments.
5. Identify nodes where increased capacity is needed.
6. Optimize customer sourcing locations.
7. Relocate specific product groupings to more optimal locations.
8. Quantify the cost to achieve service level goals.
9. Consolidating shipments to a customer through crossdocking or some other strategy to increase shipment size profiles without sacrificing frequency and service.
10. Manufacturing location changes.
11. Evaluate synergies of mergers and acquisitions.
12. Rationalizing customer ship to points to simplify and reduce costs.
13. Combine strategies in various tested scenarios to quantify total opportunity.
14. Identify the order and timing of network changes to be rolled out in the future state.

An effective network model built by experienced experts will include the necessary elements to consider and test the above scenarios.  It will also be built in such a way that it can be easily updated in the future given revised demand forecasts, possible mergers and acquisitions, manufacturing changes, etc.  The knowledge and insight of supply chain modeling experts is recommended to build a custom and complete model that checks all the boxes of designing your future supply chain.

A strategic network analysis is necessary and appropriate for nearly every industry from pharmaceuticals to fashion retail to food and beverage and beyond.  The benefits of knowing that your company is well-positioned to reduce costs, drive efficiencies, and withstand the uncertain challenges ahead is well worth the cost and effort to perform a network analysis.  For those who prepare now for forecasted changes and growth as well as the inevitable disruptions in the supply chain, you will be able to approach the future with confidence and peace of mind.
 
—Eric Payne, St. Onge Company
 
 

Enter your email to subscribe to "Links":

Email*