Supply Chain Distribution Network Model

When an organisation is considering a redesign of an existing supply chain distribution network, it relies on their experienced management team who understand their business, the complexities and the real pace of change management."A Turn Key Solution" has the ability to assist frustrated and time poor senior managers to boost supply chain performance by developing a new distribution network model within a virtual test environment. The operations management team can set customer expectations or service level targets to measure value chain initiatives in a risk free environment prior to implementation in the real world

Why a simulation model?

A distribution network model relies on vast amounts of data which is extracted several data sources that cover customer, vendor, warehouse, transport and inventory data sets. Labour costs, equipment and other site costs are also required as inputs into the new model. Once developed, the model only requires modifications to the flow of goods, equipment and other input constraints. Performance changes are captured for to address some of the following:

  • Logistics procurement decisions are made easier as service providers are added to create more physical warehouse locations through to your distribution centre.
  • Track and tracing of all imports from multiple vendor locations are managed easier to understand time and cost for sea freight or air freight consignments.
  • Customer order requirements can be modified to show changes in supply and demand and the impact that each have on customer service levels.
  • Warehousing and distribution functions from rceiving through to despatch can be observed to understand leadtime, cycletime and cost of each task.
  • Manufacturers and retailers are able to optimise their warehouse and distribution operations to create a competitive advantage.

Logistics distribution network Risks

Supply chain and logistics optimisation is all about continuous improvement, providing your customers the right value. A Turn Key Solution believes that a dynamic and responsive logistics distribution model can help your business manage risks better. By making changes to your business model and rerunning simulations, this information proves invaluable for decision making. The use of tradition analysis methods is limited in addressing some these challenges:

  • Implementing a decentalised inventory policy to service prospective customers from remote warehouses increases holding costs.
  • Additional remote warehouses are not space planned, have inbound dock limitations and increase an organisations fixed costs.
  • Line haul tranportation costs have increased to service remote warehouse locations within service level settings.
  • Product damage, obsolescence and returns add to space constraints becomming costly to processes out of the business. 

Network Modelling Approach

Our consultants are able to construct your new logistics distribution network model using the latest simulation software. Our team will spend time to understand your supply chain and logistics requirements, along with the pace you have in mind for the implementation. A Typical design includes the following:

  • Vendor supply point locations, order size, order frequency, order cost, order cycle time, order delivery time, type of inland transport, cost of inland transport.
  • Outbound logistics sea port locations, inbound receipt times, lead time to each port, process time, release time, loading time, sailing time and arrival time to port of destination.
  • Outbound logistics airport locations, inbound receipt times, lead time to each airport, process time, release time, loading time, flying time and arrival time to airport destination.
  • Destination warehouse locations, receipt cycle time & cost, putaway cycle time & cost, replenishment cycle time & cost, picking cycle time & cost, despatch cycle time & cost.
  • Customer locations, leadtime for deliveries, cost per delivery, service level for each delivery, customer returns to distribution centre, returns frequency and transportation cost.

Road Test your distribution network

Having undertaken a number of supply chain simulation projects, we understand time and data constraints that our clients are faced with in supporting a this type of project. What we can say with confidence is that you should never short cut a process and apply industry data to minimise your project costs with any consultant. Your new logistics model needs to reflect your existing cost and constraints as realistic as possible.

The commitment to reinvent your supply chain and logistics distribution network is an important one, which is why we take the time to learn more about your operations, listen to your experienced team and build your supply chain solution from the ground up. This approach delivers improvements from day one.

Logistics functions and business processes are modified to represent a future state model. From raw materials, sourcing a product or a service to a final customer delivery, the aim is to create a responsive supply chain.

Experienced developers will guide you through this process and apply their knowledge and skills to help implement the best solutions to improve any process, workflow or a defined area within your logistics distribution network. Take a look at some other models that we offer:

Next Steps:

Feel free to contact our office for advice or to discuss any specific supply chain and logistics project requirements.