Many industry players are struggling to meet customer demands in the era of digital commerce. New delivery standards may require significant investments in staffing, facilities, and technology—and such an endeavor is not always an option for most businesses. The rapid development of e-commerce has taken many organizations by surprise. Now, logistics companies are largely unprepared to adapt their operations to meet expectations in terms of quality, capacity, and speed.
Author Radiana Pit | Copperberg
However, there is a solution to meeting delivery expectations at the lowest cost possible: optimal network and warehouse design.
Logistics network and warehouse design is mainly concerned with delivering goods to customers and satisfying their needs with limited resources. This is why coming up with an optimal design holds great strategic value. But devising an optimal model is no easy feat, especially since most models stop short at minimizing costs. However, logistics professionals aim at optimizing their networks in a way that maximizes not only profit but also speed and sustainability. In order to achieve such objectives, comprehensive designs must take into account the number, location, role, and size of your facilities, which plant/vendor should produce which product, the raw materials and finished products that flow between facilities, and more.
Location—the key issue in facilitating optimal design
Determining the right number and size of your warehouses and/or plants is challenging enough, but getting the location wrong can be extremely detrimental.
However, the secret to getting the location right is to think of it as the only way to close the gap between your company and your customers. The closer the location is to your clients, the faster your goods will be delivered—and that's what today's impatient society expects from you.
So, start your design process by considering your location objectives and then identify the key factors that can make or break your network.
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