Developing a Next Generation Supply Chain Network

It's a new era for you and your customers. With the pace of commerce rapidly changing, developing an efficient business to business supply chain network needs to be a top corporate priority.  However, in order to begin, a number of questions need to be addressed. For example:

• How do you determine the amount of extra capacity you need and where it should be positioned?
• How do you decide where to add and locate another distribution and/or facility?
• Will centralizing or decentralizing your distribution network have a positive or negative impact on your total network cost?
• If you manipulate any of these options, to what degree will it impact your customer service?

The key to accurately making these decisions is to ensure you understand all the potential impacts on the total supply chain network when making your evaluation.

To simplify the process, you want to evaluate the data structure, business requirements and constraints necessary to analyze your network. This will identify the optimal network without spending valuable time on components that are not major cost or service drivers during the evaluation process.

In addition, identifying the critical business rules and requirements along with the operational constraints will ensure feasibility during the modeling process and provide an optimal solution based on the inputs. This will provide visibility to the current business requirements and rules to help understand the true cost of your supply chain network. In the end, this will help determine where to focus to reduce cost in the network.

There are a variety of modeling tools (from spreadsheets to dedicated software solutions) designed to help solve this issue. Each tool has strengths and weaknesses, so it’s recommended that you work closely with your team to identify the specific problems that need to be solved. Once identified, you can develop a structured, continuous evaluation and feedback process. By the end of this process you will be able to identify your requirements and develop your future state vision.