Ndesigning the distribution network in a supply chain pdf

Network modeling is a subset of supply chain network design in which mathematical models of the supply chain network are created. Inventory cost transportation cost facilities and handling related cost information system cost as the number of facilities in a supply chain increases, the. The case studies below are just a few examples of achievements from establish supply chain consultants together with clients. Designing a twoechelon distribution network under demand. Supply chain management supply chain management managing complex and dynamic supply and demand networks. This shows 300 shipments from atlanta to chicago with different modes. Choice of distribution network can achieve supply chain objectives from low. The stability of a distribution network depends on the fuzzy commitment of its distributors. Martel designing robust valuecreating supply chain networks. Distribution network design of a decentralized supply chain. Chapter 5 network design in the supply chain 2 outline 1. Due to rapid technological advancement, organisations with a basic supply chain can develop this chain into a more complex structure involving a higher level of interdependence and connectivity between more organisations, this constitutes a supply chain network. Present a multistage stochastic programming formulation.

Supply chain trends the experts are focusing on in 2018. Designing the supply chain network linkedin slideshare. A key player in a supply chain sc is the member who overlooks and leads others. Supply chains are a critical, and often unnoticed, part of our everyday lives. The role of distribution in supply chain distribution refers to the steps to move and store a product from the supplier stage to customer stage in the supply chain.

Here is the raw transportation rate file from the end of chapter questions. What is supply chain network design and how does it work. Samsung electronics ban the use of conflict minerals including tantalum, tin, tungsten and gold that are mined unethically in conflict areas in 10 african locations, including democratic republic of the congo dr congo. Although it can compel its autonomous members to follow the planning of a production distribution network pdn, the key player has to create an environment in which the partnership with suppliers can also grow accordingly. Lets get started by establishing a positive mindset to examining your current supply. Pdf designing the distribution network in a supply chain. A strategic framework for logistics network decisions 3. The question is how costeffective, serviceoriented and flexible is the strategy. Lectures in supplychain optimization stanford university.

Distribution occurs between every pair of stages in the supply chain. Support for managerial and policy decisions 74 a wellstructured supply chain is of key importance in achieving efficient operations amongst the suppliers, manufacturers. The whole supply chain configuration can be altered on the basis of the decisions made on the supply chain network design. The objective of this paper is to provide a framework for the design of distribution networks that are considered as components of supply chains. A are particularly important because of the enormous opportunities for abuse. Adapting your distribution network to changes in business strategy and growth is a path to competitive advantage.

The role of distribution in the supply chain marketing essay. A turn key solution has the ability to assist frustrated and time poor senior managers to boost supply chain performance by developing a new distribution network. Designing the distribution network in a cassava supply chain in. On a very high level, distribution channel is a subset of supply chain. The model introduced a linear program network representation of the supply chain, with multiple levels for the product and valueadding locations, i. Wielandwallenburg, 2011 supply chain management scm is the management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain. Supply chain network designwill help students, academics, and practitioners alike understand the importance of successfully designing and optimizing a global supply chain network, while also explaining in easy to understand steps how to make it happen. Changing the distribution network is something that a company is often reluctant to do in short range since it has direct impact on supply chain cost elements such as inventories, transportation, facilities and handling. For a more detailed discussion of the impact of the price of oil on the supply chain see this post. Maximizing value with network design and transportation. Distribution is a key driver of the overall profitability of a firm because it directly impacts both the supply chain cost and the customer experience. Distribution directly affects cost and the customer experience and therefore drives profitability. B may be guided by company rules and codes of conduct. Specialist supply chain network modeling software is used to allow cost and service optimisation of the network to be established.

The decision to redesign your logistics network can arise from many different factors, such as mergers and acquisitions, expansion into new geographic or product markets, relocation of key suppliers, the introduction of new technologies or processes in manufacturing or warehousing, etc. Our distribution strategy consultants can determine the optimal supply chain or distribution network to satisfy customer demand at specified service levels and at the lowest cost. Distribution is a key driver of the overall profitability of a firm because it affects both the supply chain cost and the customer experience directly. The role of distribution in a supply chain the key factors influencing distribution network design the design options for a distribution network assessment of the value, the strengths and weaknesses of various distribution options. Supply chain distribution network optimization industry professionals know about the volatility in emerging markets, how focus is on mitigating global supply chain risk, and the overall quest to limit supply chain overall costs with customer satisfaction and profitability strategies. Integration of logistics network in local food supply chains. A framework for designing a transportation strategy. N2 this paper describes a framework for designing the distribution network in a supply chain. Supply chain is the sequence of processes involved in the production and distribution of a commodity. For example, amazon with fewer facilities is able to turn its inventory about 12. As the number of facilities in a supply chain increases, the inventory and resulting inventory costs also increase as shown in fig. Assuming the supply chain is managed as a single entity, supply chain optimization models specify how chain performance is maximized by the optimal choice of a set of several productionrelated explanatory variables, such as number of stages in the supply chain, inventory levels, product differentiation, among others. We then discuss different choices of distribution networks and their relative strengths and weaknesses.

Distribution centres in agile supply chains school of management phd thesis. The design and operation of distribution centres within agile supply chains. Supply chain network design for critical needs with outsourcing. As one example, one auto manufacturer has 12 thousand suppliers, 70 plants. Optimization of supply chain network design for multiple. Ecoproduction environmental issues in logistics and manufacturing. This paper considers how research in operations management can support the development of strategies for the design and management of. This paper addresses the distribution network design problem in a supply chain system that involves locating production plants and distribution warehouses, and determining the best strategy for distributing the product from the plants to the warehouses and from the warehouses to the customers. Pdf analyzing distribution networks of supply chain in. A supplychain network scn is an evolution of the basic supply chain. The paper concludes by identifying distribution networks that are best suited for a variety of customer and. Nov 24, 2014 the importance of distribution in the supply chain david mayer november 24, 2014 industrial tips leave a comment while there might seem to be an incentive to purchase mro products direct from the factory that manufactures them, seemingly cutting out the middleman, the hidden costs of doing so will inevitably far outweigh any shortterm.

Most business units or functional areas within a company are impacted by a network design project. The brand is a leading competitor of nike and has continued to grow its market share through focus upon product quality and marketing. Designing the distribution network in a supply chain. Discusses theory and examples about designing distribution networks. We manage our supply chain based on the principle of an ethical distribution.

It is also referred to as network design or supply chain design. Production distribution pd network, as a part of supply chain network, has considerable effect on whole profitability of companies, because customer experience and supply chain cost are. The role of distribution in the supply chain distribution. Abstract this paper describes a framework for designing the distribution network in a supply chain. The key costs associated with your current supply chain network design. The ultimate solution of the complete model will yield the optimal supply chain network design. Caltagirone, lecturer and executive instructor of global supply chain. Distribution network performance evaluated along two dimensions at the highest level and when sustainability is explicitly considered, three. Optimization of a global distribution network for semiconductors that reduced the supply chain costs by 20%. Distribution strategy impacts all supply chain participants distribution strategy defines how we move goods to market. Various factors influencing the choice of distribution. Redesigning a distribution network in a supply chain.

A supply chain network design considering network density. But choosing the best distribution network design from the myriad of options is a challenge. Note that g represents the topology of the full supply chain network possibilities as in figure 1, for example. Designing transportation networks as one of the most important. As choice of distribution network can achieve supply chain objectives from low cost to high responsiveness. Adidas is one of the leading players in the sports shoe industry with a large market base and a strong sales and distribution network spread worldwide. D i i r b t v l c ti designing robust valuecreating supply chain. Supply chain is the sum of below three points, including the value addition activities in between like manufacturing, packing and etc. We design programs to strike the ideal balance between the centralized control you demand and the local flexibility you need to drive success centralized control means the supply chain and sites across your organization follow a single strategy. Locationbased decisions are fundamental to supply chain decisionmaking, design, and.

Mar 15, 2016 putting it simply, supply chain network design is the science and art of making decisions related to distribution network. Define the stochastic multiperiod twoechelon distribution network design problem. The primary purpose of a supply chain network design is to assess company policies and programs and to meet targets to accomplish long. Designing the distribution network for an integrated supply chain. Designing the right global supply chain network manufacturing. These decisions also help to prepare restrictions within which the inventories, transportation and most importantly, information can be utilised to increase or decrease the supply chain responsiveness and the supply chain. A supply chain network scn is an evolution of the basic supply chain. The importance of distribution in the supply chain. Zhang, dong, and nagurney 2003 generalized wardrops. Distribution refers to the steps taken to move and store a product from the supplier stage to a customer stage in the supply chain. Designing the distribution network for an integrated. Various factors influencing the choice of distribution network are described. Whats the difference between a supply chain and distribution.

Establish has a long trackrecord within supply chain design. But it is just a matter of time and sooner or later a company needs to reshape its distribution network. Therefore, supply chain management can be defined as. We denote the supply chain network consisting of the graph g n,l, where n denotes the set of nodes and l the set of links. Shortly, a distribution network is the system that a. Designing the right global supply chain network 2019. Designing an optimal supply chain network means the network must be able to meet the long. Traditionally, in many dc projects, business owners and stakeholders dont get involved until the very end when they give their approval on the overall output. Productiondistribution network design of a global supply. Designing a distribution network in a supply chain system. But in a network strategy study, our experts agree that engaging highlevel management early on is a must.

Plantsvendors ports warehouse retailers distribution centers customers raw materials and nished products that ow between the facilities. Introduction to supply chain optimization 1 overview supply chains. The different features of mathematical models in the literature are summarized in table 1, in the design of supply chain distribution network from 2010 to 2019 and are compared to the proposed model in this paper. Logix is a fullfeatured supply chain optimization and distribution network design software application that helps you quickly solve even your most complex supply chain problems. They expect flexible and fast delivery and moreover wish to choose the channel as per their wish, reach and convenience. D may be guided by the principles and standards of the institute for supply management. And making a change to your distribution network without understanding the impact on. Case studies in supply chain and distribution network strategy case studies in supply chain and distribution network strategy. Supply chain management, designing the supply chain network. C become more complex the more global is the supply chain. Supply chain network design distribution network supply. On their way from producers to end users and consumers, products pass through a series of marketing entities known as a distribution channel.

Kellogg school of management, northwestern university. Various factors influencing the choice of distribution network. T1 designing the distribution network in a supply chain. A few essential steps for forwardthinking network design optimization. Designing supply chain distribution network vskills blog. Supply chain management helps increase the efficiency of logistics service by minimizing inventory and moving goods efficiently from producers to the ultimate users.

Designing the distribution network in a supply chain 42 after this discussion, you should be able to understand. The supply chain for goods can involve a farreaching distribution network depending on the product and where the end customers are located. Almost everything that we purchase in a store comes to us as a part of a supply chain and managing these networks is a complex and ever evolving task. Due to rapid technological advancement, organisations with a basic supply chain can develop this chain into a more complex structure involving a higher level of interdependence and connectivity between more organisations, this constitutes a supplychain network. Distribution network design aligning for a competitive. And lastly, sustainability in modern supply chain networks. Flexible distribution network, omnichannel, optimization, supply chain, uncertainty. Levels of interaction i abstract to be able to retain the manufacturing industry durably, in europe in general and in sweden in specific, manufacturing companies have to be competitive also on the global market. Location intelligence plays a critical role in supply chain network design. Designing the distribution network in a supply chain sunil chopra kellogg school of management, northwestern university 2001 sheridan road, evanston, il 60208, u. Inventories transportation facilities and handling information as the number of facilities in a supply chain increases, the inventory and resulting inventory costs also increase as shown in figure 4. A systemoptimization perspective for supply chain network design for critical needs with outsourcing, as we demonstrate, captures, in a graphical manner, the options available, and provides.

Designing supply chain network for each industry involves arriving at a satisfactory design framework taking into all elements like product, market, process, technology, costs, external environment and factors and their impact on the business. A supply chain is coordinated if all supply chain members adopt the actions that optimize the entire systems performance. Changing the distribution network design affects the following supply chain costs. Optimal supply chain network design and redesign at. Distribution networks distribution refers to the steps taken to move and store a product from the supplier stage to a customer stage in the supply chain. We develop a game theory model for supply chain network competition in timesensitive markets in which consumers respond to the average delivery time associated with the various. Supply chain network competition in timesensitive markets. A framework for designing a supply chain distribution network.

Pdf this paper describes a framework for designing the distribution network in a supply chain. Supply chains and distribution channels introduction to. The supply chains of large corporations involve hundreds of facilities retailers, distributors, plants and suppliers that are globally distributed and involve thousands of parts and products. Designing the distribution network in a cassava supply chain in thailand. The role of distribution in the supply chain marketing essay type the document subtitle c09617817. Mw pvl international is continuously developing insight in the supply chain, logistics, and distribution industry this is the newest section of our knowledge center and it documents the supply chain and distribution network strategies of companies that we consider. Designing the right global supply chain network wharton faculty. Solution techniques for network design 1 optimizing facility location models 2 heuristic approaches 3 simulation. Regardless of company size or industry, every company participating in the global supply chain has some form of distribution strategy. We further note that our focus is not on industries where there is relatively less congestion and large economies of scale are realized by traveling through connections.

And designing distribution network is one of the crux factors of supply chain management. Designing the distribution network in a supply chain semantic. Topics to be covereddesigning the supply chain network designing the distribution network role of distribution, factors influencing distribution design options, ebusiness and its impact distribution networks in practice network design in the supply chain, role of network factors affecting the network design. Supply chain coordination is among the central issues in supply chain management. The supply chain consists of one manufacturer and set of independent candidate distributors that distribute products to geographically dispersed markets in a competitive manner. When an organisation is considering a redesign of an existing supply chain distribution network, it relies on their experienced management team who understand their business, the complexities and the real pace of change management. Meindl 2010 defines distribution as being the steps taken to move and store a product from the suppliermanufacturing stage to a customer stage within the supply chain. Designing the distribution network for an integrated supply chain jia shu. When designing a supply chain the following steps must be followed. Designing the distribution network in a supply chain borders.