Suppliers, manufacturing plants, distribution centers and customers all make up a supply chain network. When optimizing your supply chain network, customer demand must be satisfied while keeping logistics costs steady and under control. According to Optimum Profit Consulting, “Strategic Network Optimization calculates the most optimal (highest profit or lowest cost) way to source supplies, production and distribution across the supply chain network.”
SD Retail Consulting, a business solutions provider who specializes in the retail industry, stated seven steps in optimizing your supply chain network, which are transferrable across all industries:
- Assemble the Right Project Team
- Data Accumulation and Input
- Define Strategy & Initiatives and Develop Projections
- Run Models
- Define the Impact of Potential Scenarios
- Make the Decision
- Plot the Course
There are many benefits you can receive from optimizing your supply chain network.
The biggest benefit being that you have the opportunity of significantly lowering your transportation costs, while also lowering your inventory and operational costs. Another benefit is saving time. You can lessen lead-time and create shorter shipment times to your customers. It is definitely worthwhile for you to optimize your supply chain network.
However, these steps are often easier said than done. Many third party logistics (3PL) providers specialize in helping businesses with each of these in an effort to not only optimize your supply chain network, but maximize your results.
To learn more about how you can reduce your transportation costs by optimizing your supply chain network, contacts us today for a free Transportation Cost Analysis.