The Many Flavors Of Network Optimization
When it comes to network optimization, no one thing drives the decision to locate facilities in one part of the country over another. Instead, key decision drivers often vary by industry.
You see a new distribution center rising from the ground, you read the discouraging news that a local plant is closing, or you learn that a new company is breaking ground in an industrial park outside of town and think that there must be some inherently good or bad things about those locations. After all, aren’t the three most important things in real estate: location, location, location? Maybe it’s the quality of the site, access to the highway, tax incentives, or the cost and availability of labor. But what happened prior to this? Which factors caused the company to get interested in that location, or to get out of Dodge, in the first place? Why did an organization focus on that part of the country, at this point in time and with those site, building, and workforce requirements? How did that location fit into an overall network or supply chain network strategy, or, alternatively, what changed to make it a less optimal location?
You might think that there is one set of rules to help companies optimize their networks and enable their supply chain strategies, but in reality, the answers to those questions vary by industry and how a company goes to market to service its customers. Often, the reasons are different than you might think. Let’s look at some of the key decision drivers in network optimization and how they often vary by industry.
It’s Not the Building
Let’s start by looking at something that doesn’t matter all that much: the building you saw rising from the ground and the piece of ground from which it is rising. To anyone who has lived through the experience of building their dream house on the perfect piece of land, that sounds counterintuitive because people invest so much time, energy, and money in getting everything just right. But the truth is that in a supply chain network: “Real estate is a rounding error.”
This complete article is available to subscribers
only. Click on Log In Now at the top of this article for full access. Or, Start your PLUS+ subscription for instant access. |
Latest News
Port of Baltimore May Not Reopen Until Summer Sales & Operations Planning (S&OP) Mastery A New Priority Greets Procurement Professionals in 2024 Cargo Shipping Remains on Hold in Baltimore Following Bridge Collapse Maximizing the Bottom Line: The Power of Procurement More NewsLatest Resource
Sales & Operations Planning (S&OP) Mastery In this Special Digital Edition of Supply Chain Management Review, you will find insights on the importance of sales and operations planning (S&OP) to an organization’s bottom line.All Resources
Download Article PDF |
You see a new distribution center rising from the ground, you read the discouraging news that a local plant is closing, or you learn that a new company is breaking ground in an industrial park outside of town and think that there must be some inherently good or bad things about those locations. After all, aren’t the three most important things in real estate: location, location, location? Maybe it’s the quality of the site, access to the highway, tax incentives, or the cost and availability of labor. But what happened prior to this? Which factors caused the company to get interested in that location, or to get out of Dodge, in the first place? Why did an organization focus on that part of the country, at this point in time and with those site, building, and workforce requirements? How did that location fit into an overall network or supply chain network strategy, or, alternatively, what changed to make it a less optimal location?
You might think that there is one set of rules to help companies optimize their networks and enable their supply chain strategies, but in reality, the answers to those questions vary by industry and how a company goes to market to service its customers. Often, the reasons are different than you might think. Let’s look at some of the key decision drivers in network optimization and how they often vary by industry.
It’s Not the Building
Let’s start by looking at something that doesn’t matter all that much: the building you saw rising from the ground and the piece of ground from which it is rising. To anyone who has lived through the experience of building their dream house on the perfect piece of land, that sounds counterintuitive because people invest so much time, energy, and money in getting everything just right. But the truth is that in a supply chain network: “Real estate is a rounding error.”
SUBSCRIBERS: Click here to download PDF of the full article. |
Subscribe to Supply Chain Management Review Magazine!
Subscribe today. Don't Miss Out!Get in-depth coverage from industry experts with proven techniques for cutting supply chain costs and case studies in supply chain best practices.
Start Your Subscription Today!
It’s high time to go beyond visibility Driving supply chain flexibility in an uncertain and volatile world View More From this Issue