Introduction
The supply chain sector of a business is one of the primary operations of ensuring ultimate success of the company. Appropriate management of this division of an organization is important as it takes into consideration activities of sourcing the various raw materials and ensuring their prompt delivery. Corporations identify the importance of conducting a supply chain network planning to balance the cost trade off in inventory, transportation and manufacturing activities. The key components of the logistics network are to develop seamless communication between the company’s warehouse, manufacturing plant, and the individual suppliers. The planners take into consideration the primary needs of the organization that will limit the costs in terms of waste and maximize possibility of earning profits. The competitive nature of business operations in the modern market prompts the organizations to implement a logistics network that enables economic growth. The following report identifies ways of designing a logistics network that has a single warehouse.
Designing Logistics Network
The design of a logistics network takes into consideration various aspects of the company that would guarantee optimal functioning. The following design identifies that the organization has only one warehouse. In this regard, the plan for the logistics network should recognize the various methods that the system will incorporate as a measure of improving efficiency and objective goals of the firm (Simchi-Levi, Kaminsky, & Simchi-Levi, 2007). Taking into consideration that the warehouse stores a variety of raw materials for the company, the network will observe ways of ensuring close monitoring of effective use of space. The design will also provide the organization with effective methods of storing and removal of goods to eradicate waste of time (Jia, 2010). The plan for creating the supply chain network should also look into effective measures of improving sustainability and competitive advantage of the business. Research shows that consumers are not as loyal to brands as was the case a few decades ago. Therefore, the logistics network should incorporate means of ensuring flexibility of the system to the changing trends in the industry.
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Steps to Design the Optimal Network
The process of developing an effective network for the firm should first observe the current practices in the industry. Usually, the management personnel are under increased pressure from subordinates and the owners of the company to adopt innovative technology without relevant knowledge from the group (Fuhrman, 2015). In light of this occurrence, severe mistakes that could set back the company financially may delay optimal operation. Failure to monitor trends in the market could prevent the firm from meeting the regulation standards set by the state and federal government. Furthermore, the systems used by suppliers and retailers will be accounted for as a measure of ensuring seamless communication. The corporation should collect a huge amount of data that for the proper functioning of the system. The coordination of transportation and inventory of goods is an integral factor in the supply chain. Therefore, if data collected does not reflect the practices of the business, the system will be faulty (Fuhrman, 2015). It is also important to identify the various constraints and limitations that may hinder optimal functioning of the logistics networks, which helps develop appropriate solutions to prevent such an occurrence.
Required Information and Data
During a logistics network planning, the assumption is that there is a single decision maker to identify the appropriate design for the company. The planners will require access to a wide array of data including, cost of supply chain activities, annual demand, all product information, and location of different facilities. The latter identifies the distances between the supplier, production plant, warehouse, retailer, center for distribution, and consumers (Petridis, 2015). The information collected will enable in effective communication between the different locations such that completion of the finished product in the retailer stores will help the distribution center and production plant demand for an increased supply of raw materials. Product information focuses on the amount of supply required to make finished products and the time taken to realize this (Biswas, & Samanta, 2016). Annual demand enables preparation on making large inventory purchases particularly for goods whose market prices fluctuate frequently.
Strategy Employed in the Network
The logistics network will employ a simulation modeling strategy that will enable optimal functioning and operation of the system. The process involves creation and analysis of the digital prototype to help predict the performance in the real world. During this strategic measure, the designers of the logistics network incorporate different conditions of the market to identify parts of the system that may fail (Biswas, & Samanta, 2016). The technique focuses on enabling the optimal functioning of the network even under the poorest situations. The network will also incorporate a heuristic strategy to improve efficiency in the performance of the multiple operations (Jia, 2010). Research shows that the nature and practices of supply chain management are constantly changing. Therefore, it is important to ensure the network system of the company can collect data that can help improve its effectiveness and operation. In this case, intelligent tracking of the movement of goods from one location to the next improves the firm’s ability to reduce costs and maximize profits.
Conclusion
From the above planning of a logistics network for an organization with a single warehouse, meticulous choosing of the design is crucial to fit the needs of the company. The firm identifies the various information and data to collect over this process along with the steps one should take to meet the needs. An effective strategy is also important as it ensures the validity of the network and ability to provide competitive edge for the company.
References
Biswas, T., & Samanta, S. (2016). A strategic decision support system for logistics and supply chain network design. Sadhana, 41 (6), 583-588. doi:10.1007/s12046-016-0496-5
Fuhrman, E. (2015). Today's Enhanced Logistics Software Offers More Solutions for Supply Chain Management. Refrigerated & Frozen Foods Retailer , 24-29
Jia, S. (2010). An Efficient Greedy Heuristic for Warehouse-Retailer Network Design Optimization. Transportation Science, 44 (2), 183-192. doi:10.1287/trsc.1090.0302
Petridis, K. (2015). Optimal design of multi-echelon supply chain networks under normally distributed demand. Annals of Operations Research, 227 (1), 63-91. doi:10.1007/s10479-013-1420-6
Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2007). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies (3rd Ed.). New York, NY: McGraw-Hill/Irwin
