Distribution Network Optimization

The distribution network analysis process, which requires the application of specialized distribution optimization software, is utilized for existing networks as well as development of new distribution networks.

To learn more about this process, read our recent article.

A shipping port
We identify cost savings and network efficiencies.

We employ this process across multiple industries & disciplines to identify:

  • Where new or additional DCs or plants should be located

  • How different options can impact costs for the company

Identifying the optimal cost & service distribution network to serve the current and potential customer base.

A sample cost driver matrix and sensitivity analysis

This requires the balancing of potentially conflicting objectives, including (but not limited to):

  • Inbound/Outbound Costs
  • Inventory Deployment Costs
  • Intercompany Movements
  • Labor Costs
  • Service Requirements
  • Production & Facility Constraints

Service & Cost Performance

The Network Analysis optimizes appropriate costs & measures changes in projected service performance.

Cost performance analysis

Sample Benefits of Distribution Network Optimization Planning

Sample benefits of network optimization

  • Identify optimal locations for facilities and warehouses
  • Determine improved structure based on supplier and customer locations and costs
  • Identify potential cost savings considering a large range of costs (inbound/outbound transportation, inventory costs, facility costs, labor costs, etc.)
  • Evaluate cost and service impacts to market shifts and growth patterns
  • Identify ways to improve service times based on location
  • Develop sensitivity analyses to determine impacts of changes in location
  • Evaluate “what-if” scenarios

Example: Current & Improved Networks

Example network graph

Example network graph

Example network graph

Optimized for Multiple Products, Plants & DCs

Projected savings = $33.2 million

Projected cost savings