Logistics Network Design: Overview
Bisham has the necessary commercial expertise and practical operational experience to critically evaluate the performance and robustness of current and future logistics and supply chain networks. Bisham use many different propriety modelling tools to help design optimised supply chain networks for our clients. This covers the physical location of DCs, cross-docks and production facilities, inventory policy and optimisation of transport volumes. Whatever the format and scope of your existing network; be it a domestic network in a single country serviced by a dedicated fleet or multiple facilities in a regional or global scope serviced by shared-user transport networks or across the globe.
Logistics Network Design: Typical Client Challenges
Is our distribution network fit for purpose and, if not, what do we need to do to make it so?
How do we rationalise our current network and make it robust enough to service future business growth plans?
How do we maximise customer service levels efficiently and sustainably in a fast-changing market-place?
How efficient is our existing logistics network in terms of cost and service level performance?
How can we ensure a more effective deployment of stock and improve our return on capital employed?
What factors do we need to consider and how can we adapt the network in the light of the new business strategy?
What are the key risks our business will face in rationalising our existing network operations?
What is the true cost of servicing our customers?
How do we make change happen without disrupting customer service levels and introducing unacceptable levels of risk?
Network Design: Service Elements
Physical Infrastructure Review and Potential Rationalisation
Bisham Consulting, can undertake network design, as a ‘stand alone’ project, encompassing a strategic review, or as a part of another project, aimed at optimising a specific aspect of the supply chain as outlined below:
- Review of physical logistics infrastructure and locations,
- Centre of gravity modelling to ascertain likely potential options for optimisation modelling
Review Strategic Transport Network
- Review existing planning processes and effectiveness
- Optimisation of strategic transport plans, be it dedicated fleet or multi-mode networks
- Review use and set-up of existing planning applications
Review Inventory Policies
- Overall stock deployment model
- Application of demand planning processes
- Effectiveness of inventory management
General Scenario Modelling
- Adding, closing or change in use of locations, based on COG models
- Integration or synergy impacts of collaboration e.g. acquired companies
- Cost and service-level impacts of potential logistics changes
- New routes to market
- Assessment of financial and service-level impacts
Specific 'What if' Scenario Modelling
- Detailed overlay of different operational assumptions
- Delivery profile changes
- Volume growth projections
- Inventory level changes
- Improved transport planning processes
- Sensitivity analysis of model outputs
- Assessment of detailed financial and service-level impacts
- Detailed overlay of different operational assumptions
Network Design: The Client Benefits
Bisham’s consultants have conducted a wide-range of network optimization projects in the UK, Europe, US and globally. Benefits that have been delivered to our clients include:
- Rationalised DC infrastructure
- Reducing the number of DCs required to service a regional market
- Creation of an optimally located centralised DC
- Associated reduction in inventory levels, through consolidation of safety stocks.
- New and Optimised Transport Network Design
- Improving vehicle utilization through improved usage over the day & week
- Maximizing vehicle fill will mean less wastage
- More efficient sub-contracting strategy
- Use of appropriate modes and shared-user networks
- Improved Planning & Resource Scheduling Capability
- Introduction of improved planning processes, creating the capability to sustain optimization over the long term.
- Improved mode selection
- Intelligent use of sub-contractors
- Use of Transport Management Systems
- Improved Inventory Management
- Appropriate and better-defined stock keeping rules
- Improved demand management processes
- Inventory that matches service level aspirations
- Cost reductions and/or service level improvements
- Cost reductions will be obtained in the range 8% – 30%. This will depend on inefficiency levels in the network at project start and application of service-level trade-offs
- Potential improved order cut-off times
- Potential improvements in 1st time pick availability
- Modelled Costs for Different Potential Network Set-Ups
- Improved decision-making based on total logistics cost modelling i.e. cost and service-level impacts of potential changes.
- Improved budgeting of logistics costs
Network Design: Modelling Tools
For network modelling Bisham use a variety of tools, as appropriate to the scope, scale and composition of the customer’s existing networks. Optimising and design software will fall into a number of categories, aimed at either daily, tactical or strategic planning.
For example, networks containing a significant element of own-fleet or dedicated sub-contracted resources, PTV Optimiser, (formerly DPS) or Paragon may be the favoured option. For more complex regional or global networks involving multiple sites, inventory and multiple transport modes; then the more data demanding Llamasoft’s Supplychain Guru, (formerly CAST Aurora) might be the recommended tool. There are also a number of tools which are designed to specifically analyse the cost to serve specific customers, customer categories or markets.
In summary, it is important to select the right tool for the job, to ensure the project is conducted, efficiently, cost effectively and geared to delivering the most optimum result, in line with the needs of the business.