Network Design


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•Network design is the prime responsibility of logistics managers since a firm’ facilities and structure is used to provide products and materials  to the customers.
•Logistics facilities typically include manufacturing plants, warehouses, cross-dock operations, and retail stores.
•Determining the number and type of facility required, their geographic locations, and the work to be performed at each is an important part of network design.
•In certain situations, some of the facility operations may be outsourced to service specialists.
•Network design determines the type of the inventory and the quantity to be stocked at each facility, and the assigning of customer orders for shipment.
•Network of facilities also includes information and transportation as a part of entire structure from where logistical operations such as processing of customer orders, maintaining inventory and material handling are performed.
•The network design must consider geographical variations.
•The factors influencing modifications of network design are:
(a)Change in demand and supply
(b)Product assortments
(c)Changes in suppliers’ source of supplies.
(d)Manufacturing requirements.
•The first step towards achieving competitive advantage lies in superior network design, as the real competition is not between two companies but between efficiency and effectiveness in managing their supply chain network.

 


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