4 Signs It’s Time for a Network Analysis.Transportfolio
Supply chains are innately complex. The dynamic global marketplace, ever-changing landscape of the transportation industry, and shifting business goals provide the right environment for complexity to thrive. That’s where working with a third party logistics provider (3PL) with knowledgeable supply chain engineers comes into play. With dedicated time and applicable knowledge, supply chain engineers give you the clarity and expertise that can help simplify—and improve—your supply chain.
Case in point. With over 25 warehouses, Company ABC was transferring significant amounts of product between those locations. This made it difficult for the company to accurately manage their inventory. Company ABC engaged with their 3PL’s supply chain engineer team, who performed a network optimization analysis and made a final recommendation to eliminate 20 of the warehouse locations.
The result? A simplified, streamlined supply chain with better visibility to inventory and optimal warehouse locations. After Company ABC aligned shipment destinations to the remaining strategically-located warehouses, they gained efficiencies throughout the supply chain and experienced wide-reaching benefits.
In addition to improved customer service—via shorter transit times and fill rates—decreased outbound transportation and warehouse costs, and decreased transfers, Company ABC could also decrease the amount of inventory they carried, which added another layer of cost savings.
Is network analysis a good fit for your company?
Many businesses are typically looking for a transportation spend reduction or total revenue solution. In truth, network analysis is a best fit for any organization that is ready, willing, and able to change. Change what? Well, that depends on what your analysis unveils. But it could mean changing manufacturing locations, distribution locations, vendors, vendor locations or volumes, shipment or ordering patterns, inventory practices, or product mix—and that’s just to name a few areas. I’ve spent 20 years in the supply chain industry, with nearly 10 working on network modeling projects, and I have yet to see a supply chain that has not improved savings or customer service—if the customer is willing to make the necessary changes.
If any of these scenarios sound familiar to you, consider asking your 3PL for a network analysis consult.
- Your organization is going through an acquisition or merger
- Your organization is experiencing significant growth or decline
- Your organization is encountering big changes in your business model, e.g., the introduction of new products
- You’re unsure if your distribution centers are in the right locations
Look for my next post in the coming weeks when I discuss how a 3PL’s engineering team can bring new insight to supply chain network modeling software.
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