Network design
Optimal design of physical distribution networks is critical for our clients. Spend in the network from supplier, through factory, to DC and customer typically accounts for between 5 and 20% of business costs - and also has a major impact on the competitiveness of your service offer.
Improving working capital performance
Our network design services typically identify opportunities for clients to enhance customer service, reduce costs and improve working capital performance by:
- Eliminating unnecessary ‘touch points’ and network tiers
- Realigning inventory/working capital to better serve the customer
- Reducing transport costs by increasing vehicle and load utilisation, as well as identifying backhaul opportunities
- Factoring in tax, customs and free-trade agreements in international networks
- Optimising production allocation (capacity balancing) between production facilities
- Reflecting the internet’s impact on changed customer buying behaviour and service expectations. LCP Consulting are industry leaders in network design and optimisation – for national, regional and global networks. Our team use methodologies developed over 30+ years with clients such as Unilever, Walmart, Shell, Tesco and McDonald’s. We use a mix of bespoke optimisation tools tailored to clients’ specific needs and industry standard solutions such as Supply Chain Guru.
Enhancing customer service
Working closely with our clients, LCP’s four phase process provides a rigorous journey from the development of strategic concept, through business case, to detailed operational design. Examples of the areas we focus on include:
- Segmenting the fulfilment capabilities to better reflect the client service offering/different channels of supply/customer ordering patterns/product source and characteristics
- Stretch-thinking on where improved planning can reduce inventory and touch points, whilst delivering the same or improved service
- Factoring in the impact of e-commerce
- Leveraging advances in automation of operations, warehousing and distribution
- Advances in network optimisation tools - which enable multi-time period modelling, the inclusion of service penalties, tax and site open/closure costs within network optimisation
- Sensitivity analysis regarding how large capital investments with a lifespan of 30+ years may be impacted by fuel prices, exchange rates, labour cost trends and tariffs
- Minimisation of transport costs by using largest feasible vehicles, trading-off inventory with transport costs and operational best practice for dynamic planning and backhaul.
