The globalization of trade and the strain on flows have forced companies to reconfigure their distribution networks to become more flexible, integrating an understanding of total supplier-to-customer costs to improve the position of the network hubs and to define flow logistics. These decisions involve a variety of criteria, such as service offer, financial performance, logistics maturity of the infrastructure and local service providers, regulatory standards and taxation, etc.
Our experience has shown us that the decisions made when defining the logistics configuration (service policy, distribution networks, etc.) condition its cost structure, potential for flexibility, and inventory levels to a great extent.
It is therefore essential for companies to regularly review their customer service/distribution network policy, and adjust it or even re-configure it, to offer the right service level at the lowest cost, while minimizing risks and anticipating business trends. The decision to change a company’s logistics network should only be taken following a critical analysis of the customer service policy (lead time, availability, Make To Stock/Make To Order (MTS/MTO), direct delivery or via warehouse, etc.).
This review should be supported by an in-depth study on the number and exact location of sites, their mixes, and their sizing (surface areas, costs, staff, etc.), which involves using cost optimization and modeling tools.
To arrive at an executable plan, operational constraints (social, tax, property, etc.) must form an integral part of the review. Lastly, the company must decide between operating its warehouse itself and outsourcing.
How can Argon Consulting help you?
- Analyzing the current service offer and its compatibility with the business strategy
- Assessing the performance of the current logistics network, in terms of transport, inventory, warehousing, and logistics organization, based on its recognized expertise and benchmark baselines that cover every type of industry
- Formalizing changes relating to strategy, activities, contracts, and customers, which may have an impact on the distribution network
- Modeling the current logistics network, to obtain a baseline and comparative base to assess change scenarios
- Mastering most of the distribution network optimization tools on the market (i2, Supply Chain Strategist, Radical, Barloworld, Cast, Llamasoft, Supply Chain Guru) and developing modules to allow them to get optimum use out of these tools (e.g. defining transport or warehousing costs, inventory modeling)
- Designing internal optimization tools for the logistics network, which, in a number of specific cases, are better adapted to the specificities of the client than market tools
- Identifying the target logistics network, through various realistic scenarios, developed as part of an approach that is:
- Analytical, thanks to our modeling tools
- Pragmatic, thanks to our knowledge of logistics markets from a geographical (road networks, labor pools, infrastructure, etc.) and regulatory (customs duties, import/export constraints, etc.) perspective
- Collaborative, by identifying and selecting scenarios as a project team, with an approach that fosters transparency, effective communication, and openness
- Assessing the quantitative and qualitative challenges related to the scenarios (service, inventory, transport, surface area used, productivity, etc.) and demonstrating the impact on business lines (organization and process)
- Defining the plan for migration from the current network to the target network, minimizing risks, and supporting change
- Implementing KPIs, dashboards, and alerts to track the progress of the objectives related to the target scenario
- Managing tenders, assisting in the implementation, managing the project, and securing risks during the deployment