Distribution Network Optimization
We’ll tell you the optimal number & location of distribution points.
How do you find your center of gravity?
Mergers. Consolidations. Business expansion. Business contraction. All may require changes to your distribution network and transportation modes.
Your challenge is to understand the financial and service impact of such changes and recommend the approach that makes the most sense. But often companies move forward without knowing the facts. That’s where Trans-solutions comes in.
We are supply chain consultants that give you the hard data to make decisions that result in six and seven-figure savings to your organization.
Our approach to transportation network modeling
Trans-solutions does both strategic and practical network optimization projects, the latter being more granular.
Strategic analyses are comprehensive projects that allow you to explore a variety of distribution network options at a high level.
Practical analyses, our niche at Trans-solutions, can be done in a fraction of the time and far more affordably than a comprehensive study. These practical modeling projects are designed to provide precise, objective answers to real business questions like “How will my costs and service levels change if I relocate distribution from Memphis to Chicago?”
- Read our paper “Practical, Affordable Distribution Network Modeling.”
We start by building models that mirror your current operation. Using these models as a baseline, we can analyze a variety of strategic choices and precisely measure the cost and service impact of each new variable. The analysis can include changes to locations, methods, carriers, services, freight rates, and a dozen other supply chain variables. The result is a number you can use to establish your budget.
Beware: modeling tools alone can’t provide the answer
Transportation network modeling tools are good for directional input since they allow you to quickly do many “what if” analyses. But the results are imprecise since they are based on aggregates and averages. Another caution point: many of the supply chain consultants conducting modeling exercises have never run a warehouse or managed freight. Because they have no nuts-and-bolts operating knowledge, they may not have the practical perspective to know that the numbers simply don’t make sense.
Inventory management
Distribution network optimization must address the critical issue of inventory management. This is an underemphasized aspect of the supply chain that is often not totally within the control of people making supply chain decisions. Major decisions continue to be made without due consideration of the costs of holding the inventory.
If you are concerned with this issue, contact us for a discussion of your challenges. We can share our perspective and point you in the right direction.
Third-Party Logistics Selection (3PLs)
We’ve all heard the expression, “The job is easier when you have the correct tool."
Supply chains are no different.
Supply chain problems often stem from the misalignment of providers and service goals. We see shippers choosing 3PLs without a solid knowledge of where those firms hold a competitive advantage and expertise. For example, a company with a large number of shipments within 1000 miles may use a national LTL carrier for the work. Not only are the long-haul carrier’s base rates higher for short haul moves, but its network does not support regional distribution.
When it comes to 3PL selection, handing the keys to a company that forgets your account after the initial assessment will drive profit for them, and poor service for you.
The single most important thing a shipper can do in 3PL selection is to map out its goals, deliverables, and challenges. This is a lengthy process that involves multiple departments and levels of management. But, once you have it, you can start to fit goals with providers that have those core competencies. If your service standard is 2 days, don’t overpay for next day service. If you service standard is next day, don’t pay an expedited fee. Get the carrier whose standard is next day service.
Trans-solutions can manage a comprehensive logistics RFP management process, from identification of a short list to final 3PL selection.
