From Austin Consulting
Ensuring that your supply chain is as efficient as it can be is not top of mind for everyone these days – but maybe it should be. Often times, we are accustomed to sit back and rely on “that’s the way we’ve always done it,” but that isn’t always the best way. Sometimes changing the way things are done is the best way to find new efficiencies and cost savings.
As businesses grow, their supply chain needs change. From purchasing to shipment, all aspects of the supply chain need to be reviewed every so often. What worked when you were first starting out might not be the same as what works now.
Knowing where to start is the key, since analyzing your entire supply chain network is no simple task. We typically recommend that companies start with a Distribution Network Analysis. In a good Distribution Network Analysis, many factors are taken into consideration, such as:
Inbound and outbound shipping
How customer locations receive product from company facilities
Manufacturing and distribution facility locations and costs
Mode of transportation
While these are just a few of the main criteria, it is important to start with the aspects that are most important to your business. Starting at the top and working your way down will help you to see the quickest return on investment.
Identifying benchmarks is the first step to any great analysis. The benchmark will give you a starting point to show your current operational costs. Once a benchmark is identified, it is important to always look at multiple scenarios to determine the most optimal outcome. Looking at adding new plants, relocating plants or even consolidating plants, will help you to determine new cost or savings opportunities associated with your desired outcome.
Whether you take on this endeavor yourself, hire consultants or use a powerful software tool, the objective is to ensure you have the most efficient supply chain as your business needs and goals change. There is certainly a cost differential between the various approaches to a Distribution Network Analysis, but the costs are miniscule compared to the cost benefits of an optimized supply chain network solution. The analysis is one of the most important investments you might make in your business.
Contact Austin Consulting for more information.
Austin Consulting’s blog