DATA, ANALYTICS & AI USE CASE

Strategic Network Design Study

Improve cost efficiency and get overall network transparency. Compare scenarios, and get digital representation of all relevant parameters for inbound and outbound logistics.

AI and machine learning in data strategy

Networks usually evolve over the course of a company’s history. With each passing day, every new customer, each new production facility, and each new warehouse, the network continues to evolve. 

The network is the central structure of every company, finely tuned to operate optimally, efficiently, and with minimal errors. Any adjustment to a factor in the network has repercussions on the entire network. Therefore, in a Network Design Study, a comprehensive analysis must be conducted, considering all parameters. These may include economic viability, performance, political factors, resource availability, all while taking into account potential strengths, weaknesses, opportunities, and threats.

The challenges in a Network Design Study are typically as follows:

    • Adjusting a network structure while considering company culture and corporate history (e.g., unalterable locations, a willingness for cultural change)
    • It is nearly impossible to consider all existing factors 100%
    • The costs, conversion, and transition of network adjustments, as well as the establishment time, must be actively considered in the decision-making process
    • Providing a diverse range of data for analysis – Various data types are needed (suppliers, transport costs, forecasting, inventory, etc.)
    • Making correct and appropriate assumptions – Due to the dynamic nature of the market, it is challenging to make the most relevant assumptions

    In a network study, fundamental questions are typically addressed, such as:

      • Baselining – What are the current costs with all relevant network stakeholders?
      • How do warehouse costs evolve when growth “g” arises?
      • Is it worth it to increase transport intensity compared to the development of warehouse costs?
      • Where is the ideal location for an additional warehouse if the market in region “r” grows by “p” percent?

      Thanks to a strategic Network Design Study, various optimizations in the areas of inbound and outbound can be modeled, simulated, and evaluated.

      • Influence of a new strategic stakeholder in the existing network (new supplier, new production facility, or new warehouse/hub)
      • Structured evaluation of various options for procurement or distribution in a multi-tiered transport network
      • Location planning and consolidation projects for cross-docks, transshipment centers, depots, and hubs
      • Simulations of growth forecasts on the network and its stability/performance
      • Greenfield Planning involves defining a new and optimized network structure without existing locations, considering the relevant parameters
      • Brownfield Planning – Optimization with existing locations, areas, supplier/customer assignments, and transport/network structures

      With a strategic network design study, a highly complex transport network structure involving various stakeholders can be cleanly depicted and transparently presented through detailed parameterization. Consequently, all relevant parameters for inbound and outbound logistics are digitally represented. Baselining enables showcasing the current status and swiftly presenting further possible scenarios on the same benchmark (costs, service, capacity) simply and efficiently.

      Thus, cost savings become directly visible and comparable. A well-founded and cleanly derived decision basis has been developed, which can be adjusted without risk and used for validating implemented measures. The goal is to create a more effective and resilient supply chain that aligns with the organization’s strategic objectives.

       

      Contact us

      Sandro Breandle, Chief data and analytics officer in Log-hub AG

      Chief Data and Analytics Officer

      Sandro Brändle

      Have a question about our Data, Analytics & AI Consulting Services? You can contact our CDAO directly.

      Schwandweg 5, Schindellegi

      Switzerland 8834

      Tel: +381 60 358 52 83

      support@log-hub.com

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