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Strategic Network Optimization
Optimizing the configuration of procurement networks
Logistics networks are complex, delicately balanced entities in which service levels, capacities, and costs are directly interlinked. Tweaking any one element can disrupt the equilibrium and have far-reaching consequences for this dynamic, interconnected web. That’s why strategic decisions about network optimization need to be made with an eye on the big picture, taking into account all the parameters involved.
How can you optimize transports when bundling cargo or consolidating shipments through a hub? Where are cost savings possible? Are the higher transport costs for more frequent deliveries offset by lower storage costs? It’s important to give careful thought to these and similar questions when redesigning and optimizing procurement or distribution networks, especially when assessing performance and cost-effectiveness and weighing potential opportunities and risks.
Within the scope of strategic network optimization, numerous options can be unerringly analyzed and simulated for both inbound and outbound, such as:
- Evaluation of various procurement or distribution options in a multi-level supplier network (direct delivery vs. consolidation, etc.)
- Consideration of a new supplier, production facility, or consolidation hub
- Greenfield planning: design of an optimized network structure (regional carrier concept, milk runs, etc.) based on the required service levels and costs
- Brownfield planning: optimized configuration of sites, areas, supplier allocations, and transport structures
- Consolidation concepts and location planning of cross-docks, transshipment centers, depots, and hubs
- Sensitivity analysis based on growth forecasts
Strategic Network Optimization brings complete transparency to complex transport networks with their suppliers, forwarders, and existing structures. The solution looks at all the parameters that directly impact inbound and outbound logistics, making it possible to not only examine the status quo for potential optimization but also simulate possible scenarios for their effect on cost, service, and capacity utilization.
Comparing direct delivery and a platform concept helps optimize transport processes and usher in significant cost savings. Further potential savings come from redefining area boundaries and routing rules. In addition to geographical routing, exact timetables with departure and arrival times for the individual routes are also stored. This yields detailed information on service levels, costs, and capacity utilization. Additional network strategies can be simulated anytime, quickly and easily with no risk.
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