Introduction
Logistics has become one of the most important factors in the business world today. The logistics managers are faced with the challenge of designing the most effective logistics network, able to reduce the costs as well as help organizations in providing the best services. It is imperative to note that the level of competition in business has become so high. Therefore, organizations need to develop strategies that can help them remain competitive. Such strategies should include any activity that will reduce the operation costs. In addition, offering the best customer services will be highly effective (Blecker, Kersten, & Ringle, 2014). This gives logistics design the upper hand when it comes to improving and maintaining the competitive advantage of an organization. This article will focus on the ways and steps that should be followed in designing an effective logistics network. The focus will be on a logistics network that contains two warehouses.
Steps that should be followed in designing a logistics network
When designing a logistics network of two warehouses, it is important to ensure that the two structures are in proximity to each other. The following steps can be followed to determine the network.
Define the business objectives. Every business has its objectives. All the activities and all the departments should be geared towards achieving these goals. This is arguably one of the most critical decisions that need to be made in designing a logistics network (Fleischmann, 2009). The aspects that need to be considered are the mode of transport to be used, the level of customer service required as well as the level of demand. It is also important to determine customers to be supplied by certain warehouses as well as the location of each.
Gather supporting data. It is important to ensure that one has solid data that will support one’s decisions. For instance, the data should support the decision to construct two warehouses and locate them at a given site. The data should help in reducing the costs and achieving top customer services.
Model the supply chain network. This is an important step in designing a logistics network. The supply chain network should be designed in such a way so that it could reach all the customers at the right time. The two warehouses should be located in such a manner for them to be properly connected. With the advanced technology, it is easy to connect them so as to improve the level of communication between the two (Simchi-Levi, Chen & Bramel, 2014). They should also be able to serve the customers effectively. Cost is an important factor to be considered.
Analyze the network. Once the network has been designed, it is important to analyze it to ensure that all the factors have been considered and that it is set to meet the required objective. If there are factors that are not well addressed, they should be revisited. This will reduce the chances of loss.
Implement and refine. The network should then be implemented. It should be noted that logistics is dynamic. Therefore, the network should be revisited regularly and redesigned to incorporate any changes that may occur in the business environment. This will ensure constant and satisfactory service to customers.
Two warehouses: Logistics network design
There are several factors to be observed when designing a logistics network. Similarly, the factors should be observed when locating and constructing a warehouse. The factors mentioned include infrastructure, security, the commodity to be stored in the warehouse and the distance to the customer as well as from the supplier.
Infrastructure. This refers to the road networks that are used to access the warehouse location. The availability of electricity and water is also an important aspect of infrastructure that needs to be taken into consideration. If transportation is easy, the time taken to transport goods will also be reduced significantly (Keßler,2013). As a result, it will be easy to ensure that goods are availed within the required time. This is a factor that plays an important role in reducing costs and improving customer satisfaction.
Security. It is also important to ensure that the warehouses are located at a secure place for goods to be safe at all times. It will avoid suffering losses because of theft. It will also reduce the costs that may be incurred due to theft as well as the need for hiring security.
Type of commodity to be stored. Different commodities require different storage methods. Some commodities are fragile, while others are bulky, and some are prone to rust, etc. It means that products should be stored in a special way to ensure they are in good condition.
Customer location. The warehouse should not be too far from the final consumption point. This will reduce the cost of transportation as well as the time spent to deliver the goods. It will mean that the goods can be availed to the customers in time and hence ensure a constant supply. The supplier should also be not too far from the warehouse (Timm and Kotzab, 2009). The logistics managers should, therefore, be able to locate a place for the warehouse at a central point between the supplier and the consumers or at a location that is convenient to both.
References
Blecker, T., Kersten, W., & Ringle, C. M. (2014). Next Generation Supply Chains: Trends and Opportunities. Berlin: Epubli GmbH.
Fleischmann, B. (2009). Advances in distribution logistics. Berlin: Springer-Verlag.
Keßler, M. (2013). Logistics network design in Africa: Integrating aid flows and national self supply. Bern: Haupt.
Simchi-Levi, D., Chen, X., & Bramel, J. (2014). The logic of logistics: Theory, algorithms, and applications for logistics management. New York: Springer
Timm, G and Kotzab. H. (2009), Comprehensive Logistics. Heidelberg: Springer.