A supply chain system depends on a complex logistics life cycle of purchasing raw materials to transportation, warehousing, and distribution. Optimising the distribution network is a critical factor that makes a business agile and responsive to the customer’s needs. Some classic examples of such optimisation are Amazon and Walmart, which used strategic options such as distribution centers and decentralisation. In this article, let us look at strategies to ensure your business runs on an optimised distribution network.
A distribution network is a series of interconnected transportation systems that facilitate the movement of goods from the manufacturer to the end consumer. The network is responsible for storing, handling, and delivering the goods to the customers. Therefore, an optimised distribution network ensures that a business achieves an improved bottom line. The primary purpose of such a logistics process is to minimise transportation costs, reduce delivery time, and provide reliable service.
A robust distribution network will depend on the goals you want the network to achieve for your business. Hence, a comprehensive study of the factors that influence the distribution network and the type of transportation system that will suit your business needs must be completed before building such a system. The following sections discuss these elements in detail:
A multi-tier distribution system involves multiple distribution centers in different regions, each serving a specific geographic area. It helps reduce the distance goods need to travel by taking advantage of regional transportation networks. It also reduces transportation costs as the distance the goods need to travel is minimized, and the number of vehicles required is also reduced.
Investing in technology can help streamline operations, automate processes, and provide real-time visibility into the movement of goods throughout the supply chain. This can improve delivery times and reliability and minimise transportation costs.
Technologies like Transportation Management Systems (TMS), Warehouse Management Systems (WMS), and Real-time Tracking Systems help automate processes, provide real-time visibility into the movement of goods, and enable organisations to make informed decisions about their supply chain operations.
Collaborating with order fulfillment service providers can help optimise the distribution network as you get access to their transportation and storage infrastructure, expertise, and technology. The service providers also help improve the reliability and efficiency of the supply chain, as well as reduce transportation costs and delivery times.
Regularly reviewing the distribution network is crucial to ensure its continued optimisation. This can help identify areas that need improvement and ensure that the network remains efficient and effective.
When reviewing the distribution network, factors such as transportation costs, delivery times, and delivery reliability should be considered. By regularly monitoring these factors, businesses can make informed decisions about their supply chain operations and ensure that their distribution network remains optimised.
Optimising the distribution network is crucial to ensure the efficient and effective delivery of goods in the supply chain. By considering factors such as the nature of products, network size, and geographical locations of distribution centers, designing a robust distribution network becomes more accessible. With the help of the strategies discussed above, you can optimize the distribution network in the supply chain seamlessly.
A distribution network is a series of interconnected transportation systems that facilitate the movement of goods from the manufacturer to the end consumer.
An optimised distribution network can minimise transportation costs, reduce delivery times, and increase reliability.
Factors such as the nature of products, network size, and geographical locations of distribution centres should be considered when designing a distribution network.
Strategies for optimising the distribution network include:
– Implementing a multi-tier distribution system.
– Investing in the right technology.
– Collaborating with service providers.
– Conducting regular reviews.
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