Network design - a strategic imperative

Are your DCs where they should be, to best service your customers?

Streamline Your Supply Chain For An Amazing Boost In Profitability.

This is important to any company, and imperative for all organizations in acquisition mode.

While supply chains are extended and lead times grow longer, customer service expectations are rising. Distribution costs are increasing at a faster pace than product prices, a situation that only exacerbates the margin pressure companies are currently experiencing. Managing a tight supply chain is one key to increased profitability. An optimized distribution network will reduce logistics costs, improve asset utilization, increase inventory turns, and enhance customer service levels. Network design is the first step toward creating streamlined supply chain.

Strategic network design has proven effective at:

  • Reducing supply chain costs and improving profitability
  • Improving existing customer fulfilment and service levels
  • Minimizing supply chain impact of opening / moving / closing manufacturing & distribution facilities
  • Maximizing the profitability of acquisitions and divestitures through a supply chain impact analysis

Most companies, though, do not have the personnel or the right tools to perform this analysis on a regular basis. As a result, logistics decisions are made based on intuition rather than data-driven analyses.

TOTALogistix has the expertise and resources to provide the insight you need to drive costs from your supply chain. Our experienced professionals use state of the art modeling tools to combine sophisticated data analysis with valuable human insights to create high-impact solutions.

Network Design – Before and After


Strategic network design in action

Background: A growing consumer electronics manufacturing client with transportation spend over $20MM. Challenge/Opportunity: With a growing number of customer complaints from delivery delays, the company recognized that the firm’s growth was challenging its existing distribution network.


Actions: TOTALogistix conducted a strategic network design:

  • Analyzed the company’s existing supply chain, identified bottlenecks and established baseline cost and service levels
  • Redesigned and streamlined the network to decrease distribution costs and improve fulfillment times
  • Advised management on the implementation of the network redesign

Typical benefits of strategic network design include:

  • 10-20% savings in distribution costs (transportation plus warehousing costs)
  • 15-20% reduction in inventory
  • 20-30% improvements in delivery performance

Project Time frame: 60 – 120 days

Results: After implementation, the company:

  • Reduced transportation costs by more than 25 percent
  • Cut inventory levels by more than 20 percent, thereby increasing liquidity
  • Improved percentage of customers receiving 3-day service from 50 percent to over 95 percent
networkcase
    There is no room for Jackson Pollock in your supply chain.

What Our Clients Say:

“TOTALogistix has helped us grow our business. It’s not just about reducing costs, but about creating a competitive advantage. As our distribution has changed, including increased production overseas, they’ve helped us compete in ways we didn’t think were possible before.”

Joel Botwick

President - Prestige Window Fashions

“Whether you are a growing company expanding into new markets or a mature company focused on improving your bottom line, reevaluating your distribution network can help you achieve the desired results. Total’s expertise was instrumental in supporting and quantifying network design decisions under very different business scenarios.”

David Hakula

Vice President of Finance - Crestron

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