Scenario-wise Logistics Network Design

Our primary focus and the key service we offer to our clients is network design. We help to find a feasible and robust network solution. Where to locate our warehouses, how many do we need, what is their size? Due to changes in the environment like globalization, new markets opening up, mergers, acquisitions, new suppliers, customers, the performance is constantly under pressure.

Does our network still fits our needs? And is it still cost efficient? Answering these questions can be a tedious task and quite complex. Without some sort of structural approach or reduction of the problem it is virtually impossible to search for improvements. We offer a comprehensive approach to optimize the network and search for improvements. We use a state of the art modeling platform to help companies review their structure: LogicNet Plus XE. It is still one of the most strategic decisions to take, the structure of the network, where to locate plants, warehouses, capacities, customer assignments, service levels.

 

Need for change

The first step in the approach is to assess the need for change. Are there crucial changes, internal and external, that induced the need to change the network structure of alignment? All sorts of analysis are possible: Greenfield, current structure, what if we change our service? What if the market in Eastern Europe grows with 15%? What if the fuel prices go up with 20%? What if terrorist attack takes out our major port of entry?

Powerful tools

We have a long track record when it comes to network design and we make use of the absolute state-of-the-art. To map and design logistics networks we use the network optimization tool Logicnet Plus XE that enables us to successfully translate the business strategy and customer service objectives into efficient network solutions.  We use this packaged network design and planning approach that combines the advanced optimization technology with an easy-to-use graphical user interface to manage the world’s most complex supply chains. What makes us unique is the fact that we combine this strategic network design tool with our accurate transportation rates. This enables us to design logistics networks based on accurate rates and carrier performance. In the picture above a typical output is presented. Based on the number of warehouses, the total cost break-down is presented.

ArgusI will implement the defined scenarios in our simulation and optimization software LogicNet Plus XE and start with the calculations. After a thorough analysis of the available software packages for strategic network design in 2008, ArgusI came to the conclusion that ILOG’s LogicNet Plus XE was the best software available and purchased this tool. Since then, we have very successfully used it in a number of location studies, among which the European Network Optimization project discussed further on in this proposal. Here is what ILOG’s website says about the software tool: Please refer to ILOG’s website for additional information: LogicNet Plus XE.

Using actual rates

Nestor™ is ArgusI’s in-house developed software for benchmarking of transportation rates and performance delivered. It is fed from a large database containing many transport tariffs that are either negotiated tariffs of large multinational companies or published market rates. Based on this database, Nestor™ determines how well rate schedules perfom as compared to the available tariffs of its peers. In the added figure you find (1) Geographical distribution of shipment destination (customer sites); (2) Spend overview per country, compared to the simulated spend that would have followed from the ‘average of peers’ tariff; (3) Spend per weight class compared to best and average of peers tariffs; and (4) Delivery performance overview. . ..

 

This post is also available in: Dutch

Tags: , ,

2 Responses to “Scenario-wise Logistics Network Design”

  1. Bas Groothedde 2011/08/18 at 4:58 pm #

    Yet another test

  2. Bas Groothedde 2011/08/18 at 4:58 pm #

    Working. Test 012133

Follow us on LinkedIn for news on Jobs openings
Google+
X
X