Logistics network design

Network design is a strategic subject for businesses. It calls for in-depth study to orientate crucial decisions such as:

• siting, sizing the right number of factories, platforms and warehouses
• defining the physical flows between the various links in the supply chain and distribution flows
• specializing (or otherwise) factory production lines
• stocking items in the right place for the best customer delivery terms
• outsourcing certain activities such as distribution.

Developing a powerful logistics network is a competitive advantage in the current economic context where competitive pressure is rife, the market volatile and globalized and raw materials costs are rising. An optimized logistics network makes for lower costs, a grip on logistics flows and providing excellent customers service.

As a decisional mathematics expert, Eurodecision has logistics network design skills with many projects to its credit. Our customers call on us because we use modeling and optimization tools to deal with this issue. There are many advantages to using these tools:

• all your supply chain characteristics and special features can be modeled (transportation or manufacturing costs, manufacturing batch constraints, storage constraints, operational constraints, and so on)
• we can come up with optimized network design solutions on the basis of our simulations, comprising solution costing and a detailed view of the network (flows between sites, individual factory output, etc.). Subsequently we make in-depth analyses to understand the model’s findings (e.g. explain a counter-intuitive solution).
• once the model is finalized, “what if” simulations can be produced, such as: What will happen if transportation costs rise by 2%? If this factory has more capacity, how will that alter matters?