Network design

What is the best distribution network that minimises costs and provides competitive levels of service?

This question may be prompted by forecast capacity constraints, imbalances or cost pressures in the existing network or a major change in where products need to be sourced or marketed. Whatever the driver, the aim in network design is to optimise the cost and service combination.

The role of distribution centres and warehousing varies along the chain. For manufacturing organisations, it is a stock buffer between the line and customers and a consolidation point. For retailers it increasingly to manage balanced and smooth flows between manufacturers and stores.

LCP Consulting provides a comprehensive network modeling and design capability that is driven by the definition and agreement of future requirements identified from the answers to such questions as:

• what customer service requirements will the network need to support?
• what are the future sales growth projections?
• what is the forecast customer and product sales mix?
• what are future product inventory holding requirements?

We collect cost and transaction data for the current network operation so that we can begin to model the existing case and then clearly show different future scenarios and the business benefits they provide. We use a range of modelling and simulation tools, the choice of which is dependent on the complexity of the network.

We develop the transition sequence that will make it a reality and support its realisation. This extends from designing and sourcing new warehouse facilities to selecting a logistics service provider for the future network.

We have completed numerous network strategies for companies across the sectors, including:

• designed and implemented a global distribution network for a telecommunication manufacturer
• modelled and developed a new distribution network and operations organisation for one of the largest chemicals businesses in China
• rationalised and reconfigured the distribution network for a major UK retailer to respond to rapid growth and international sourcing.

The combination of LCP’s experienced network modelling and design consultants and our distribution design and outsourcing expertise, means we can design the best network solution and also help deliver it.