How to Maximize Your Opportunities for Success With Distribution Network Design

Whether your distribution network is new or existing, it’s important to understand how you can maximize your opportunities for success. Distribution Network Design is receiving increasing recognition as a key driver of market success. However, implementing a new network or making changes to an existing one can be challenging unless you’re guided by the right experience.

What are the 4 types of distribution channel?

Understanding what is being distributed and how it is being delivered is the first step in designing a network. This includes defining the footprint and flow of product to and from customers and warehouses. Next, various conceptual alternatives are evaluated based on cost, service level and lead time requirements from warehouse to customers. These alternatives are compared with the baseline network and the returns on investment are determined. To further optimize the alternatives, sensitivity analysis is conducted by fluctuating various costs and savings to determine which alternative provides the greatest return.

The success of a Expert Distribution Network Planning network is dependent upon the ability to effectively manage inventory. For this reason, the best time to plan for inventory deployment into a network is during the initial network design process. Networks that are implemented without planning for this critical element often fail to meet their operational goals.

The success of a distribution network can also be impacted by the internal organizational areas that are involved with the management of a network. For example, marketing seeks to maximize sales by being accessible to the customer and having plenty of inventory to minimize back orders while production and finance want to reduce expenses by running long lots and pushing the product out the door as quickly as possible. These conflicting needs must be balanced to find the optimal solution to a network’s overall success.