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Is Network Location Design Right for Your Business?

Here are several initial questions to ask that will help you understand if network location design could help your business: • Do you understand your
by Evan GLICK 07/09/2021

Here are several initial questions to ask that will help you understand if network location design could help your business:

• Do you understand your existing logistics network performance?

• Do you understand your existing logistics network costs?

• Are you meeting customer expectations?

• Is the supply chain meeting service levels?

 

We’ve provided some context, considerations, and starting points for each question.

 

Check out a chapter from our Network Location Design Guide to help you analyze your network and if it's time to complete a network location study. To download the full free network location guide — How Network Location Design Will Revolutionize Your Supply Chain click here!

DO YOU UNDERSTAND YOUR EXISTING LOGISTICS NETWORK PERFORMANCE?

Context & Considerations

• Understanding current performance lets you set a baseline for NLD improvement.

• Supply chain KPIs and metrics are a starting point for identifying

specific issues but do not exist in isolation.

• Further decision-making and optimization can be demonstrated by improvements

to these metrics.

Starting Points

  • Identify current cost reporting to see what measures are currently in place.
  • Audit existing cost reporting to ensure it accurately captures actual costs.
  • Review the breadth of supply chain cost reporting to see where there are gaps in understanding pricing and expenses.
  • Gather historic and current data so you have a snapshot of costs over time.

 

DO YOU UNDERSTAND YOUR EXISTING LOGISTICS NETWORK COSTS?

Context & Considerations

• Understanding supply chain costs is one of the biggest challenges for any organization.

• Reducing costs relies on deep insight into fixed and variable

expenses across every part of the supply chain.

• The “Total Cost of Ownership” for your supply chain must sum every

type of cost—obvious and hidden—wherever it occurs.

Starting Points

  • Identify current cost reporting to see what measures are currently in place.
  • Audit existing cost reporting to ensure it accurately captures actual costs.
  • Review the breadth of supply chain cost reporting to see where there are gaps in understanding pricing and expenses.
  • Gather historic and current data so you have a snapshot of costs over time.

 

ARE YOU MEETING CUSTOMER EXPECTATIONS?

Context & Considerations

• Customer expectations are primarily driven by speed, quality, and cost.

• This translates to “How quickly they receive goods,” “Whether the goods are

delivered successfully,” and “How much the goods cost, including shipping.”

• Improving any one of these areas will directly impact customer satisfaction.

Starting Points

  • Identify existing measures for speed, accuracy, quality, and cost.
  • Understand how these measures translate into the experience of the end customer, and identify failing metrics that create pain points.
  • See how you can relate data back to the customer experience, by reviewing customer support data, issues, and complaints that highlight supply chain problems.

 

IS YOUR SUPPLY CHAIN MEETING SERVICE LEVELS?

Context & Considerations

• You can only optimize parts of the supply chain under your direct control.

• Other supply chain performance will need to be addressed through service

level agreements (SLAs).

• These SLAs can be discussed and agreed with supply chain partners

to enhance areas that you do not have direct control over.

Starting Points

  • Map out your supply chain to understand the areas you have direct control over and the areas that are governed through SLAs.
  • Review SLAs that are in place with key supply chain partners, including the KPIs they need to reach.
  • Review reporting against SLAs to ensure all partners are performing according to contracted terms.

 

These four questions will help you understand your supply chain performance, where your costs are coming from, the impact on customer satisfaction, and the governance you have

over supply chain partners. This provides a useful foundation and baseline for network location design improvements.  GEODIS will help you optimize your supply chain and find the best locations to meet your cost and customer satisfaction needs. Get in touch with us to find out how we can take all your supply chain factors into account, build realistic forecasts, and provide you with a concrete list of recommendations to optimize your logistics.

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