6.4 Distribution network design
11 min read•august 21, 2024
Distribution network design is a crucial aspect of supply chain management, connecting manufacturers to consumers. It involves optimizing product flow, reducing costs, and enhancing through various network types tailored to specific business needs and market demands.
Efficient network design balances multiple factors, including product characteristics, customer demand patterns, transportation costs, and service level requirements. Optimization techniques, such as and , help create the best possible network configuration for a company's unique needs.
Types of distribution networks
- Distribution networks form the backbone of supply chain management, connecting manufacturers to end consumers
- Efficient network design optimizes product flow, reduces costs, and improves customer satisfaction
- Various network types cater to different business needs, product characteristics, and market demands
Direct shipment networks
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- Involve shipping products directly from manufacturers to customers without intermediaries
- Eliminate need for warehouses or , reducing handling and storage costs
- Ideal for perishable goods (fresh produce) or customized products (made-to-order furniture)
- Offer faster delivery times and reduced risk of product damage
- Challenges include higher transportation costs for small orders and limited inventory consolidation
Warehousing networks
- Utilize centralized or decentralized warehouses to store and distribute products
- Enable inventory consolidation, reducing overall holding costs
- Facilitate bulk shipments from manufacturers, leading to lower transportation costs
- Allow for value-added services (product customization, packaging)
- Provide buffer against demand fluctuations and
- Require significant investment in facilities and systems
Cross-docking networks
- Involve transferring products directly from inbound to outbound vehicles with minimal storage
- Reduce handling costs and inventory holding time
- Ideal for fast-moving consumer goods (FMCG) or time-sensitive products (newspapers)
- Require precise coordination of inbound and outbound shipments
- Rely heavily on advanced information systems for real-time tracking and scheduling
Hub-and-spoke networks
- Utilize central hubs to consolidate and redistribute shipments to spoke locations
- Optimize transportation efficiency by consolidating shipments for long-distance transport
- Reduce overall transportation costs through economies of scale
- Enable faster and more frequent deliveries to spoke locations
- Commonly used in air freight (major airports as hubs) and parcel delivery services
- Require sophisticated routing and scheduling algorithms to maximize efficiency
Factors influencing network design
- Network design decisions significantly impact overall supply chain performance and costs
- Effective design balances multiple, often conflicting, objectives to create an optimal solution
- Continuous evaluation and adjustment of network design ensure adaptability to changing market conditions
Product characteristics
- Physical attributes (size, weight, fragility) influence handling and storage requirements
- Shelf life affects inventory holding strategies and distribution speed
- Value density impacts security measures and transportation mode selection
- Customization needs may require postponement strategies in the distribution network
- Hazardous materials necessitate specialized handling and storage facilities
Customer demand patterns
- Geographical distribution of customers shapes network structure and facility locations
- Seasonality influences inventory levels and workforce planning
- Order frequency and size affect transportation strategies and warehouse design
- Service level expectations drive decisions on network responsiveness
- Demand volatility impacts safety stock levels and risk mitigation strategies
Transportation costs
- Mode selection (truck, rail, air, sea) based on product characteristics and urgency
- Trade-off between transportation and inventory holding costs
- Fuel prices and distance impact overall distribution costs
- Economies of scale in shipment consolidation
- Last-mile delivery costs often represent a significant portion of total transportation expenses
Inventory holding costs
- Include capital costs, storage costs, and risk costs (obsolescence, damage)
- Influence decisions on number and size of warehouses
- Trade-off between centralized and decentralized inventory strategies
- Impact of product value and turnover rate on inventory policies
- Safety stock levels affected by demand variability and lead times
Service level requirements
- Define customer expectations for and delivery speed
- Influence network responsiveness and proximity to customers
- Trade-off between service levels and distribution costs
- Impact inventory positioning and safety stock levels
- May vary by product category or customer segment
Network optimization techniques
- Optimization techniques aim to find the best possible configuration of a distribution network
- Utilize mathematical models and algorithms to balance multiple objectives and constraints
- Require accurate data inputs and assumptions to produce meaningful results
- Often involve iterative processes to refine solutions as conditions change
Facility location models
- Determine optimal number, size, and location of facilities in a distribution network
- Consider factors such as demand patterns, transportation costs, and fixed facility costs
- Include models like the Center of Gravity method for single facility location
- Utilize more complex algorithms for multi-facility problems (p-median, set covering)
- Incorporate capacity constraints and service level requirements into the optimization process
Transportation models
- Optimize the flow of goods through the distribution network
- Minimize total transportation costs while meeting demand requirements
- Include classic problems like the Transportation Problem and the Transshipment Problem
- Utilize linear programming techniques to solve large-scale problems
- Consider various constraints such as vehicle capacity and delivery time windows
Mixed-integer programming
- Combines continuous and discrete variables to model complex distribution network problems
- Allows for more realistic modeling of real-world constraints and decisions
- Can incorporate both facility location and transportation optimization simultaneously
- Handles fixed costs and economies of scale in facility and vehicle operations
- Requires sophisticated solvers and may be computationally intensive for large problems
Distribution center considerations
- Distribution centers play a crucial role in efficient supply chain operations
- Design and operation of distribution centers impact overall network performance
- Balancing cost efficiency with operational effectiveness is key in distribution center planning
Location selection criteria
- Proximity to major transportation hubs (airports, seaports, highway intersections)
- Labor availability and cost in the area
- Land and construction costs
- Tax incentives and regulatory environment
- Natural disaster risk and climate considerations
- Accessibility to key markets and suppliers
- Potential for future expansion
Size and capacity planning
- Based on projected throughput and storage requirements
- Consideration of seasonal fluctuations and peak periods
- Flexibility to accommodate future growth or changes in product mix
- Trade-off between fixed costs and operational efficiency
- Impact of automation and technology on space utilization
- Consideration of value-added services and their space requirements
Layout and material handling
- Efficient flow of goods from receiving to shipping
- Optimization of picking and packing operations
- Selection of appropriate storage systems (pallet racks, automated storage and retrieval systems)
- Implementation of lean principles to minimize waste and improve productivity
- Ergonomic considerations for worker safety and efficiency
- Integration of technology (conveyor systems, sortation equipment, robotics)
- Flexibility to handle diverse product types and order profiles
Last-mile delivery strategies
- Last-mile delivery represents the final step in the distribution process to the end consumer
- Often the most expensive and challenging part of the supply chain
- Significantly impacts customer satisfaction and brand perception
- Requires balancing cost efficiency with service quality and convenience
Home delivery vs pickup points
- Direct home delivery offers convenience but increases delivery costs
- Pickup points (lockers, stores) reduce failed deliveries and allow for shipment consolidation
- Click-and-collect models combine online ordering with in-store pickup
- Parcel shops provide flexible pickup locations for customers
- Trade-off between customer convenience and distribution costs
- Impact on inventory management and store operations for omnichannel retailers
Crowdsourced delivery options
- Utilize independent contractors or gig workers for last-mile delivery
- Provide flexibility to handle demand fluctuations and peak periods
- Reduce fixed costs associated with maintaining a delivery fleet
- Challenges include quality control and consistent service levels
- Examples include food delivery services (Uber Eats) and package delivery (Amazon Flex)
- Legal and regulatory considerations regarding worker classification and rights
Autonomous delivery technologies
- Include drones, self-driving vehicles, and delivery robots
- Potential to reduce labor costs and increase delivery speed
- Suitable for certain types of deliveries (small packages, urban areas)
- Regulatory challenges and public acceptance issues
- Ongoing development and testing by major retailers and logistics companies
- Integration with existing distribution networks and last-mile operations
Performance metrics
- Key performance indicators (KPIs) measure the efficiency and effectiveness of distribution networks
- Enable continuous improvement and benchmarking against industry standards
- Provide insights for strategic decision-making and operational adjustments
- Should align with overall business objectives and customer expectations
Order fulfillment rate
- Measures the percentage of orders successfully completed and delivered on time
- Indicates overall distribution network effectiveness
- Impacts customer satisfaction and repeat business
- Calculated as (Number of orders fulfilled / Total number of orders) * 100
- May be broken down by product category, customer segment, or geographical region
- Helps identify bottlenecks or inefficiencies in the order processing and delivery process
Inventory turnover
- Measures how quickly inventory is sold and replenished over a given period
- Indicates efficiency of inventory management and working capital utilization
- Calculated as (Cost of goods sold / Average inventory value)
- Higher turnover generally indicates better inventory management
- May vary by product type and industry standards
- Helps balance between stock availability and holding costs
Transportation costs per unit
- Measures the average cost to transport each unit of product
- Helps identify opportunities for cost reduction and efficiency improvements
- Calculated as (Total transportation costs / Total units shipped)
- May be analyzed by transportation mode, route, or product category
- Influences pricing decisions and profitability analysis
- Helps evaluate the effectiveness of transportation strategies and carrier selection
On-time delivery percentage
- Measures the proportion of deliveries made within the promised timeframe
- Directly impacts customer satisfaction and service level performance
- Calculated as (Number of on-time deliveries / Total number of deliveries) * 100
- May be analyzed by carrier, route, or customer segment
- Helps identify issues in or execution
- Influences decisions on network design and service level agreements
Technology in distribution networks
- Technology plays a crucial role in optimizing distribution network operations
- Enables real-time visibility, data-driven decision making, and process automation
- Improves efficiency, reduces errors, and enhances customer service
- Requires significant investment and ongoing maintenance
Warehouse management systems
- Software solutions for managing day-to-day warehouse operations
- Optimize inventory placement, picking routes, and labor allocation
- Provide real-time inventory visibility and tracking
- Enable advanced features like wave planning and cross-docking
- Integrate with other supply chain systems for seamless data flow
- Improve accuracy and efficiency in order fulfillment processes
Transportation management systems
- Software platforms for planning, executing, and optimizing the movement of goods
- Enable carrier selection, , and load consolidation
- Provide real-time tracking and visibility of shipments
- Facilitate documentation and compliance management for international shipments
- Offer analytics and reporting capabilities for performance monitoring
- Integrate with GPS and mobile technologies for real-time updates
RFID and tracking technologies
- Enable automatic identification and tracking of products throughout the supply chain
- Improve inventory accuracy and reduce manual counting efforts
- Enhance visibility of product movement and location in real-time
- Facilitate faster receiving and shipping processes
- Enable advanced applications like smart shelves and automated replenishment
- Challenges include implementation costs and standardization across supply chain partners
Environmental considerations
- Growing importance of sustainability in supply chain operations
- Regulatory pressures and consumer expectations drive focus on environmental impact
- Balancing economic and environmental objectives in distribution network design
- Opportunities for cost savings through eco-friendly practices
Reverse logistics
- Manages the return flow of products from customers back to manufacturers or distributors
- Includes product returns, repairs, refurbishment, and recycling
- Requires specialized processes and infrastructure for efficient handling
- Impacts inventory management and warehouse space utilization
- Opportunities for value recovery and improved customer service
- Challenges include unpredictable volume and condition of returned items
Green transportation options
- Utilization of alternative fuel vehicles (electric, hydrogen fuel cell)
- Optimization of routes and load factors to reduce emissions
- Intermodal transportation strategies to leverage more efficient modes (rail, water)
- Implementation of driver training programs for fuel-efficient driving
- Use of aerodynamic vehicle designs and low-rolling resistance tires
- Challenges include higher initial costs and limited infrastructure for alternative fuels
Packaging optimization
- Redesigning packaging to reduce material usage and waste
- Utilization of recyclable or biodegradable packaging materials
- Optimizing package sizes to improve transportation efficiency
- Implementing reusable packaging systems for closed-loop supply chains
- Balancing product protection with environmental impact
- Considering the entire lifecycle of packaging materials
Global distribution challenges
- International distribution networks face unique complexities and risks
- Require careful planning and adaptation to diverse market conditions
- Impact of geopolitical factors on supply chain strategies
- Need for flexibility and resilience in global distribution networks
International trade regulations
- Compliance with customs regulations and import/export laws
- Management of tariffs and duties in different countries
- Adherence to product safety and labeling requirements
- Navigation of trade agreements and preferential treatment
- Challenges of dealing with changing regulations and political climates
- Importance of documentation accuracy and completeness
Currency fluctuations
- Impact on costs and revenues in international transactions
- Need for hedging strategies to mitigate exchange rate risks
- Influence on sourcing decisions and supplier relationships
- Effects on pricing strategies in different markets
- Challenges in financial planning and forecasting
- Importance of monitoring global economic trends
Cultural differences in logistics
- Variation in business practices and negotiation styles across cultures
- Impact on customer service expectations and communication
- Influence on packaging design and product presentation
- Differences in holiday schedules and business hours
- Importance of local knowledge and partnerships
- Need for cultural sensitivity in marketing and branding strategies
Future trends in distribution
- Rapid technological advancements reshaping distribution networks
- Increasing focus on customer-centric and personalized logistics solutions
- Growing importance of data analytics and artificial intelligence in decision-making
- Continued emphasis on sustainability and circular economy principles
Omnichannel distribution
- Integration of multiple sales channels for seamless customer experience
- Challenges in inventory management across online and offline channels
- Need for unified view of inventory and order fulfillment capabilities
- Importance of consistent pricing and promotions across channels
- Leveraging stores as mini-distribution centers for online orders
- Implementing ship-from-store and buy-online-pickup-in-store (BOPIS) options
Blockchain in supply chain
- Enhances transparency and traceability throughout the distribution network
- Improves security and reduces fraud in transactions and documentation
- Enables smart contracts for automated execution of agreements
- Facilitates faster and more efficient cross-border transactions
- Challenges in widespread adoption and standardization
- Potential applications in product authentication and recall management
Artificial intelligence for optimization
- Utilization of machine learning algorithms for demand forecasting
- AI-powered route optimization and dynamic rerouting
- Predictive maintenance for vehicles and equipment
- Automated decision-making in inventory management and replenishment
- Chatbots and virtual assistants for customer service in logistics
- Challenges in data quality and algorithm interpretability
Key Terms to Review (37)
Artificial intelligence for optimization: Artificial intelligence for optimization refers to the application of AI techniques and algorithms to enhance decision-making and improve the efficiency of various processes. This approach uses data-driven methods to analyze complex systems, identify optimal solutions, and automate decision-making in areas such as supply chain management, resource allocation, and distribution networks.
Automated sorting systems: Automated sorting systems are technologies used to organize and distribute items efficiently within warehouses and distribution centers. These systems leverage advanced algorithms, conveyor belts, and robotics to streamline the sorting process, ultimately improving accuracy and speed in handling goods.
Blockchain in supply chain: Blockchain in supply chain refers to a decentralized digital ledger technology that records transactions across multiple computers securely and transparently. It enhances traceability, accountability, and efficiency in the supply chain by allowing all parties involved to access and verify data in real-time. This technology can significantly impact various aspects, such as inventory management, distribution networks, and overall supply chain strategy.
Centralized distribution: Centralized distribution is a logistics strategy where all products are stored and shipped from a single location rather than from multiple warehouses. This approach can streamline operations and reduce costs but may lead to longer delivery times for certain customers depending on their proximity to the central hub. The efficiency gained through centralized distribution often translates into better inventory management and simplified supply chain processes.
Cross-docking networks: Cross-docking networks are logistics systems designed to facilitate the quick transfer of goods from incoming shipments directly to outgoing shipments with minimal or no storage time in between. This approach enhances efficiency and reduces handling costs by streamlining the distribution process, allowing for faster delivery times and reduced inventory levels. Cross-docking is especially valuable in supply chains where speed and responsiveness are critical, making it a key strategy in effective distribution network design.
Cultural differences in logistics: Cultural differences in logistics refer to the variations in customs, values, behaviors, and communication styles that exist among different cultures and how these differences impact logistics operations. Understanding these cultural nuances is essential for efficient distribution network design as it influences decision-making, negotiation processes, and relationship management with partners across global supply chains.
Currency fluctuations: Currency fluctuations refer to the changes in the value of one currency compared to another over time. These variations can be influenced by a range of factors, including economic indicators, interest rates, inflation, and political stability. Understanding currency fluctuations is essential as they can significantly impact facility location decisions and distribution network design in global operations.
Customer satisfaction: Customer satisfaction refers to the measure of how products or services meet or exceed customer expectations. It's essential for building customer loyalty and drives repeat business. High levels of customer satisfaction can serve as a competitive advantage, influencing not only purchase decisions but also brand reputation and overall market success.
Decentralized distribution: Decentralized distribution refers to a system where the distribution of goods and services is managed across multiple locations or facilities rather than relying on a single central hub. This approach can enhance flexibility and responsiveness in meeting customer demand by allowing for localized decision-making and logistics management, which can improve service levels and reduce transportation costs.
Direct Distribution: Direct distribution refers to the process of delivering products directly from the manufacturer to the end consumer without the involvement of intermediaries such as wholesalers or retailers. This approach allows manufacturers to maintain greater control over their sales processes, pricing, and customer relationships, often leading to increased profit margins and better customer service.
Direct shipment networks: Direct shipment networks refer to logistics systems where products are shipped directly from the manufacturer or supplier to the end customer without going through a distribution center. This approach streamlines the supply chain by minimizing handling and storage, often resulting in faster delivery times and reduced costs. It is particularly beneficial for companies seeking to enhance customer satisfaction through quicker service while optimizing their inventory management.
Distribution Centers: Distribution centers are specialized warehouses designed to store goods and manage the efficient flow of products from suppliers to customers. These facilities play a crucial role in supply chain management by ensuring that products are stored, picked, packed, and shipped effectively, thus optimizing delivery times and reducing costs.
Facility location models: Facility location models are mathematical and analytical tools used to determine the optimal placement of facilities within a network to minimize costs and maximize efficiency. These models take into account various factors such as transportation costs, facility costs, service levels, and demand distribution. By strategically locating facilities, organizations can improve their supply chain efficiency and customer service.
Fill rate: Fill rate is a key performance metric in inventory management that measures the percentage of customer orders that are fulfilled from available stock. It reflects how well a company can meet customer demand without stockouts and is critical for maintaining customer satisfaction and loyalty. A higher fill rate indicates efficient inventory management and effective order fulfillment processes, which are interconnected with aspects like order quantity, safety stock levels, and distribution network design.
Green transportation options: Green transportation options refer to environmentally friendly methods of moving goods and people that minimize pollution and reduce carbon footprints. These options encompass various modes of transport, including electric vehicles, public transit systems, biking, walking, and alternative fuels, all aimed at promoting sustainability and reducing the negative impact on the environment. Incorporating these options into logistics can significantly enhance efficiency in distribution network design by optimizing routes and reducing operational costs.
Hub-and-spoke networks: Hub-and-spoke networks are a system of transportation or distribution where a central hub connects to multiple peripheral locations or spokes. This design enhances efficiency and reduces costs by centralizing logistics operations while allowing for flexible distribution routes to reach various destinations. It’s especially relevant in supply chain management, as it can streamline inventory management and improve delivery times.
International trade regulations: International trade regulations are rules and laws that govern trade between countries, ensuring fair competition, protecting domestic industries, and promoting economic cooperation. These regulations impact various aspects of cross-border trade, including tariffs, import/export restrictions, and compliance with international agreements. They play a critical role in shaping supply chain decisions, influencing where companies choose to locate facilities and how they design their distribution networks.
Inventory Management: Inventory management is the process of overseeing and controlling the ordering, storage, and use of a company's inventory. It aims to strike a balance between ensuring that there is enough inventory to meet customer demand while minimizing costs associated with holding too much inventory. Effective inventory management is critical as it ties into process efficiency, supply chain coordination, and demand forecasting.
Inventory stockouts: Inventory stockouts occur when a business runs out of a specific product, leading to an inability to meet customer demand. This situation can result from poor inventory management, unexpected spikes in demand, or disruptions in the supply chain. Stockouts can significantly affect customer satisfaction and a company's bottom line, making effective inventory control crucial in distribution network design.
Lead Time: Lead time is the total time it takes from the initiation of a process until its completion, often measured from the moment an order is placed to when it is delivered. Understanding lead time is essential in managing various operations, as it affects inventory levels, production schedules, and overall customer satisfaction.
Lean supply chain: A lean supply chain is a systematic approach to managing and optimizing the flow of goods and services, focused on minimizing waste while maximizing value for customers. This concept emphasizes the elimination of non-value-added activities, improving efficiency, and streamlining processes across all levels of the supply chain, from suppliers to end customers. By fostering collaboration and reducing excess inventory, organizations can better respond to customer demands and enhance overall performance.
Mixed-integer programming: Mixed-integer programming (MIP) is a mathematical optimization technique that involves problems where some decision variables are required to be integers while others can be continuous. This approach allows for a blend of discrete and continuous decision-making, making it particularly useful for complex problems like distribution network design, where decisions about quantities and locations must be made under various constraints.
Network design modeling: Network design modeling is a systematic approach to designing a distribution network that optimally connects various nodes, such as suppliers, warehouses, and customers, while considering costs, service levels, and constraints. This process helps organizations make informed decisions about the location and capacity of facilities, transportation routes, and inventory management. Effective network design modeling enhances efficiency and responsiveness in meeting customer demands.
Omnichannel distribution: Omnichannel distribution is a sales approach that integrates multiple channels to provide customers with a seamless shopping experience, whether online or in physical stores. This strategy allows businesses to connect with consumers through various touchpoints, including websites, social media, mobile apps, and brick-and-mortar locations, ensuring that customers can interact with the brand in a consistent and personalized manner.
Order fulfillment: Order fulfillment is the complete process of receiving, processing, and delivering orders to customers, ensuring that they receive the correct products in a timely manner. This process not only includes picking, packing, and shipping but also involves managing inventory and customer communication. Efficient order fulfillment is crucial for maintaining customer satisfaction and loyalty, as it directly impacts a company's ability to meet demand and manage its distribution network effectively.
Packaging optimization: Packaging optimization refers to the process of designing and producing packaging that maximizes efficiency, reduces waste, and minimizes costs while still ensuring product protection and consumer appeal. It plays a crucial role in the distribution network, as effective packaging can significantly impact shipping, storage, and handling costs, leading to overall improvements in supply chain performance.
Reverse logistics: Reverse logistics is the process of moving goods from their final destination back to the manufacturer or a designated location for the purpose of recapturing value or proper disposal. This concept is crucial for organizations as it encompasses the management of returns, recycling, refurbishment, and waste management. Efficient reverse logistics can enhance customer satisfaction, reduce costs, and support sustainability efforts by minimizing waste and maximizing the reuse of materials.
RFID and Tracking Technologies: RFID (Radio Frequency Identification) and tracking technologies are systems that use electromagnetic fields to automatically identify and track tags attached to objects. These technologies play a crucial role in improving the efficiency and accuracy of distribution network design by providing real-time visibility and data on inventory levels, shipment status, and location of products throughout the supply chain.
Rfid technology: RFID technology, or Radio-Frequency Identification technology, uses electromagnetic fields to automatically identify and track tags attached to objects. This technology plays a vital role in improving efficiency and accuracy across various processes, especially in managing inventory and logistics, facilitating smooth supply chain integration, enhancing material handling systems, and optimizing distribution network design.
Route Optimization: Route optimization refers to the process of determining the most efficient path for transportation and delivery, minimizing costs while maximizing speed and reliability. This technique is crucial in distribution network design, as it ensures that goods are delivered in the shortest time possible while considering factors such as traffic patterns, vehicle capacity, and delivery windows.
SCOR Model: The SCOR Model, or Supply Chain Operations Reference Model, is a framework that helps organizations analyze and improve their supply chain processes. It provides a standard language and a comprehensive set of metrics, enabling businesses to understand their operations better, enhance cycle time reduction, and align their supply chain strategy. This model emphasizes integration across various functions, from procurement to distribution network design, allowing companies to streamline their operations and optimize performance.
Supply chain disruptions: Supply chain disruptions refer to unforeseen events that interrupt the flow of goods, services, or information within a supply chain. These disruptions can arise from various sources, including natural disasters, economic shifts, supplier failures, or geopolitical tensions, and can significantly affect distribution network design by altering routes, inventory levels, and lead times.
Transportation Management Systems: Transportation Management Systems (TMS) are software solutions designed to manage and optimize the logistics of transportation. They help companies plan, execute, and analyze the movement of goods, providing visibility into the shipping process and improving efficiency. By utilizing TMS, organizations can streamline their distribution network, reduce costs, and enhance customer service by ensuring timely deliveries.
Transportation Models: Transportation models are mathematical formulations used to determine the most efficient way to transport goods from multiple suppliers to multiple consumers while minimizing costs. These models help businesses and organizations design and optimize their distribution networks by considering various constraints, such as supply and demand, transportation costs, and route availability.
Transportation planning: Transportation planning is the process of evaluating and designing efficient systems to move goods and people from one location to another. It involves analyzing various transportation modes, their interactions, and the impacts they have on distribution networks. Effective transportation planning ensures that resources are allocated efficiently, minimizes costs, and enhances service quality in the context of delivering products to customers.
Warehouse management systems: Warehouse management systems (WMS) are software applications designed to support and optimize warehouse functionality and distribution center management. They facilitate the tracking of inventory levels, orders, deliveries, and the overall workflow within a warehouse. These systems help improve efficiency, accuracy, and visibility in the supply chain, making them crucial for effective distribution network design.
Warehousing networks: Warehousing networks refer to the interconnected system of warehouses that are strategically positioned to facilitate the storage and distribution of goods. These networks play a crucial role in optimizing supply chain efficiency by balancing inventory levels, transportation costs, and service requirements across different locations. A well-designed warehousing network ensures timely delivery and effective management of resources, ultimately enhancing customer satisfaction.