Designing the distribution network in a supply chain. Changing the distribution network design affects the following supply chain costs. The role of distribution in the supply chain distribution. Almost everything that we purchase in a store comes to us as a part of a supply chain and managing these networks is a complex and ever evolving task. And making a change to your distribution network without understanding the. Designing the distribution network in a supply chain 42 after this discussion, you should be able to understand. Most business units or functional areas within a company are impacted by a network design project. Distribution directly affects cost and the customer experience and therefore drives profitability. The analysis is focused on determining the distribution nodes based on factors such as demand concentration, customer. Distribution is a key driver of the overall profitability of a firm because it directly impacts both the supply chain cost and the customer experience. Caltagirone, lecturer and executive instructor of global supply chain. The primary purpose of a supply chain network design is to assess company policies and programs and to meet targets to accomplish long. Abstract this paper describes a framework for designing the distribution network in a supply chain. Optimization of a global distribution network for semiconductors that reduced the supply chain costs by 20%.
Designing a distribution model for the future without. Designing the distribution network for an integrated. Thus warehouse location decisions are crucial determinants of whether the supply chain is an efficient channel for the distribution of products. It is also referred to as network design or supply chain design. Formulation and efficient solution procedure this paper addresses the distribution. Establish has a long trackrecord within supply chain design. Mw pvl international is continuously developing insight in the supply chain, logistics, and distribution industry this is the newest section of our knowledge center and it documents the supply chain and distribution network strategies of companies that we consider. Due to rapid technological advancement, organisations with a basic supply chain can develop this chain into a more complex structure involving a higher level of interdependence and connectivity between more organisations, this constitutes a supplychain network. Factors influencing distribution network design why do you require a distribution network between manufacturing facility and customer location. The model introduced a linear program network representation of the supply chain, with multiple levels for the product and valueadding locations, i. In supply chain management today, it is widely accepted that effective upstream operations drive efficiency further down the supply chain take, for instance, the degree to which suppliers are beginning to help customers reduce supply chain volatility through strategies such as vendormanaged inventories vmi and collaborative planning, forecasting and replenishment cpfr. Specialist supply chain network modeling software is used to allow cost and service optimisation of the network to be established.
Various factors influencing the choice of distribution network. Solution techniques for network design 1 optimizing facility location models 2 heuristic approaches 3 simulation. Designing an optimal supply chain network means the network must be able to meet the long. Understanding the optimization behind supply chain design projects kindle edition by watson, michael, hoormann, sara, cacioppi, peter, jayaraman, jay. Productiondistribution network design of a global supply. Designing the distribution network in a supply chain semantic. Changing the distribution network design affects the following supply chain costs notice that these are four of the six supply chain drivers we discussed earlier.
When designing a supply chain the following steps must be followed. Designing the distribution network for an integrated supply chain jia shu. Download it once and read it on your kindle device, pc, phones or tablets. A key player in a supply chain sc is the member who overlooks and leads others. Pdf designing the distribution network in a supply chain. For all supply chain executives, managers, strategists, and analysts. Designing valuecreating supply chain networks alain. Supply chain network design for competitive advantage. Network modeling is a subset of supply chain network design in which mathematical models of the supply chain network are created.
As the number of facilities is increased, total logistics costs first. In fact, a number of fortune 100 companies require such. What is supply chain network design and how does it work. Distribution centres in agile supply chains school of management phd thesis. Distribution occurs between every pair of stages in the supply chain.
Discusses theory and examples about designing distribution networks. Request pdf designing a distribution network in a supply chain system. Network designing plays an important role in all type of industries when delivering, sourcing and operations are crucial activities. The performance of no distribution network system or a distribution network in place or proposed has to be evaluated on two major dimensions. Its often useful to think about your supply chain as a network. The case studies below are just a few examples of achievements from establish supply chain consultants together with clients. Dalam scm ada banyak hal yang harus dipertimbangkan terkait dengan berbagai aliran dalam rantai pasok.
The paper concludes by identifying distribution networks that are best suited for a variety of customer and. Designing the supply chain network linkedin slideshare. Most leading companies perform supply chain network design scnd analysis to define the structure of their supply chain as well as the key operations that will be performed at each location in the resulting network. Supply chain design is being used to match the supply and demand under uncertainty by positioning and managing inventory.
Part ii designing the supply chain network chapter 4 designing distribution networks and applications to omnichannel retailing 69 factors affecting distribution network design in the supply chain 69 design options for a distribution network 74. Whether company is planning an alternative structure, establishing a new plant or going global, it is imperative to have strategic designing to. Supply chain management supply chain management managing complex and dynamic supply and demand networks. Designing the distribution network in a supply chain sunil chopra kellogg school of management, northwestern university 2001 sheridan road, evanston, il 60208, u. The lean supply chain flows to the beat of the customer, where all supplychain activities are triggered by the pull of the pacesetting process. A framework for designing a supply chain distribution network. Wielandwallenburg, 2011 supply chain management scm is the management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain. Chapter 5 network design in the supply chain 2 outline 1.
The analysis includes suppliers, manufacturing, warehousing, and distribution. Although it can compel its autonomous members to follow the planning of a productiondistribution network pdn, the key player has to create an environment in which the partnership with suppliers can also grow accordingly. A case study supply chain management has no doubt become companies strategy to enhance their competitiveness. Our distribution strategy consultants can determine the optimal supply chain or distribution network to satisfy customer demand at specified service levels and at the lowest cost. Supply chains are a critical, and often unnoticed, part of our everyday lives. T1 designing the distribution network in a supply chain.
Distribution refers to the steps taken to move and store a product from the supplier stage to a customer stage in the supply chain. Case studies in supply chain and distribution network strategy case studies in supply chain and distribution network strategy. The role of distribution in a supply chain the key factors influencing distribution network design the design options for a distribution network assessment of the value, the strengths and weaknesses of various distribution options. Use features like bookmarks, note taking and highlighting while reading supply chain network design. Designing the right global supply chain network 2019. A supplychain network scn is an evolution of the basic supply chain. The design and operation of distribution centres within agile supply chains. Designing the distribution network in a supply chain 0. The role of distribution in supply chain distribution refers to the steps to move and store a product from the supplier stage to customer stage in the supply chain. Designing supply chain network for each industry or business involves arriving at a satisfactory design framework taking into all elements like product, market, process, technology, costs, external environment and factors and their impact besides evaluating alternate scenarios suiting your. Ada tiga tahapan yang digunakan dalam menyusun scm yaitu, membuat desain jaringan rantai pasok, perencanaan rantai pasok, dan mengendalikan operasi.
Factors influencing distribution network design why do you. We then discuss different choices of distribution networks and their relative strengths and weaknesses. Designing a distribution network in a supply chain system. Design for supply chain supply and demand chain executive. But choosing the best distribution network design from the myriad of options is a challenge. Request pdf redesigning a distribution network in a supply chain. Designing the right global supply chain network wharton faculty.
Designing and implementing lean in your supply chain. Supply chain network design combines best practices, the latest methods in optimization and analytics, and cuttingedge case studies. Inventories transportation facilities and handling information as the number of facilities in a supply chain increases, the inventory and resulting inventory costs also increase as shown in figure 4. Focusing on the design of robust valuecreating supply chain networks scn and key strategic issues related to the number. Location intelligence plays a critical role in supply chain network design. Solution techniques for network design 1 optimizing facility location models 2 heuristic approaches 3 simulation technique 3 1.
Network design in supply chain management using excel om. Adapting your distribution network to changes in business strategy and growth is a path to competitive advantage. As the figure shows, every stop that a product makes between raw materials and a customer is a node of the network. Designing distribution networks warehouse supply chain. Putting it simply, supply chain network design is the science and art of making decisions related to distribution network. N2 this paper describes a framework for designing the distribution network in a supply chain. Redesigning a distribution network in a supply chain. Supply chain network designwill help students, academics, and practitioners alike understand the importance of successfully designing and optimizing a global supply chain network, while also explaining in easy to understand steps how to make it happen.
The goal of the lean supply chain is to deliver the highest value to the customer at the least total systems cost. Choice of distribution network can achieve supply chain objectives from low. A strategic framework for logistics network decisions 3. Distribution network design aligning for a competitive. Designing a distribution model for the future without breaking the bank certified retail solutions specializes in delivering highquality systems and services to help retailers manage their national technology deployment and onsite maintenance needs. A research conducted by amiri 2006 has addressed the issue of designing a distribution network in a supply chain including the location of facilities factories and distribution depots and yet determined the best strategy for distributing the product from the factory to the warehouse and from the warehouse to the customer. Supply chain design is the process by which a company structures and manages the supply chain in order to identify the right balance between inventory, transportation, and manufacturing cost. Various factors influencing the choice of distribution network are described. Designing valuecreating supply chain networks springerlink. Designing the distribution network in a supply chain management. Supply chain network analysis makes use of a big picture thinking approach to the supply chain network design from the conceptualization to the implementation. Request pdf re designing a distribution network in a supply chain. Having developed the definition of the lean supply chain, we need to determine how we can.