A logistics network is the structure of internal physical facilities that a company sees as ideal to meet its demand. However, this concept of ideal structure is extremely subjective and depends on the evaluation of several strategic factors defined internally, in addition to other marketing variables. A company can have speed and innovation in its value proposition as fundamental pillars of its business, as is the case of industries in the technology sector, for example. In this case, an agile network capable of dealing with eventual setbacks in the availability of its products is preferable, even if it inevitably incurs higher operating costs. On the other hand, companies that have a value proposition of high volume and low contribution margin with products with more functional and less innovative characteristics cannot afford this luxury. The idea for this type of company is to have a structure of logistical facilities with the leanest possible flow, avoiding waste, excesses and extra operating costs as much as possible, even if this inevitably incurs a loss of agility and a lack of flexibility for eventual situations. unforeseen.
Therefore, in order to define an ideal logistics network, it is important to take into account the benefits and losses of each type of installation, as well as its alignment with the corporate strategy. A manufacturing unit, for example, may have production tax benefits that directly affect its sale price, making it a great option for direct sales to customers located in its vicinity. With the geographical distance of customers, one option to consider is opening a DC, which reduces transport costs and improves the level of service, however increasing storage operating costs and inventory opportunity costs. A transshipment point (PT) can also serve as an option, reducing transport costs and without major impacts on storage and inventory, however without major improvements in the level of service.
Several other surveys are also necessary for a good definition of the logistics network. Prospects of potential locations, cost surveys, estimates of future demand and investments in opening and closing facilities are fundamental activities for generating possible network scenarios to be evaluated.
In short, the ultimate goal of studying networks is to be able to direct network decisions to the ideal point on the curve. trade-offs between cost and service level. From the point of view of results, the implementation of an ideal network can reduce logistical and production costs without loss of service level, or, on the other hand, increase this service to the customer without consequent loss in cost.
And does your company have network definitions aligned with strategic objectives? What is certain is that well-planned and executed network decisions can generate significant competitive advantages for companies regardless of the complexity of the market in which they operate. The secret lies in the quality and robustness of the planning and implementation projects for these logistics network initiatives.
References:
FISHER, Marshall. What is the right supply chain for your product. Harvard Business Review, 1997.
