Supply chain network design is critical to realize step change improvements. Eighty percent of the supply chain costs are locked in at the start. Supply chain network design is about determining the optimal footprint for a company in terms of number, mission, location and size of distribution centers, manufacturing plants and suppliers. Supply chain network design aims to determine which plant should produce which product and/or determines which warehouse should fulfil demand of a certain customer.
The objective of supply chain network design is to balance service level against production and purchasing costs, inventory carrying costs, facility costs, transportation costs and risks.
Successfully determining the optimal manufacturing and distribution footprint requires a combination of data driven engineering solutions, operations knowledge and breakthrough thinking capability.
In the past, companies were reviewing their manufacturing and distribution footprint every 5-10 years. In today’s environment with ongoing mergers and acquisitions, new markets and channels as well as technological developments, the frequency and need of reviewing the manufacturing and distribution footprint has increased.
Supply chain network design starts with a review of the current distribution network. This could be initiated by an upcoming (renewal of) lease of a distribution center, a merger or acquisition, or an entry into a new market. Distribution network analysis enables a fact-based review of the current distribution network and provides all necessary insights and answers to questions such as:
BCI is a leading firm in the field of supply chain network design. Our services include the strategic evaluation of a part of a footprint or a comprehensive end to end supply chain footprint in terms of cost, service, flexibility, scalability and risks. This can be a stand-alone existing network, a distribution network analysis related to pre/post acquisition or a cross-divisional manufacturing and distribution footprint review.
BCI uses state of the art supply chain network optimization software which includes Llamasoft´s SC-Guru, LogicNetPLus and SAILS. Our state of the art models are powered by BCI’s inhouse developed databases which provide regional inputs such as labor costs, labor availability, transportation distances and related costs across all transport modes, real estate and utility costs and alike.
Although strategic objectives differ by client, BCI’s services are aimed at defining the best manufacturing and distribution footprint for our client in terms of:
Our proven approach in distribution network analysis includes a five-step approach which encompasses:
For each scenario, BCI assesses the landed supply chain costs, the service levels in the network, the distance to the customer base etc. The visual below illustrates an example of an outcome of a supply chain network analysis.
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