Center of Gravity
Optimize your Supply Chain Design.
What it is
- The Center of Gravity App calculates the weighted centers of your customers.
- It is a great starting point for Supply Chain Analysis and Redesign.
What it delivers
- Optimize Network Design for future demand changes.
- Simulate expansions in new markets and regions.
- Preconfigured dashboards for result interpretation and analysis.
What are the benefits
- Compare scenarios with a different number of centers and analyze the results based on important KPI’s like total costs, average distance to a center etc.
- Impressive result visualizations on animated maps.
Center of Gravity vs. Center of Gravity Plus vs. Fixed CoG?
_____
What’s the difference?
Center of Gravity
- Calculates the weighted centers based on one dimension (weight)
- The optimization criteria is to minimize “weight x distance” for all customers.
Center of Gravity Plus
- Calculates the weighted centers based on up to three dimensions (weight, volume, revenue)
- The importance of the three dimensions can be adjusted via sliders
Fixed CoG
- Calculates the centers based on already existing center locations
- Sensitivity Analysis shows up the saving potential by moving existing centers
Calculate scenarios with As-Is and new locations
____
Sensitivity Analysis included
Find out the optimal locations of your weighted centers while considering your existing locations. Use Sensitivity Analysis to get saving potentials of moving existing centers.
Using Center of Gravity for Supply Chain Analysis and Network Design
____
Select your current cutomers
To get started, you’ll need a list of your current customers and last year’s revenue. Select the data in Excel and link it to the “Addresses” table as shown below. After the data is selected and the link icon on the right turns green, click on the “Calculate” button.
Visualize your data on the map and dashboard
Once the calculation is done, open the map and the dashboard to get an overview about the results. In the sample map below, you’ll notice that the program calculated three centers of gravity: one center is close to Berlin, one center is in the western part, where most of the customers are, and one center is in the south.
Use the Dashboard to analyze the quality of the results
The dashboard provides you with an overview of the most important KPIs. As you can see in the example below, the average distance to the customer and the maximum distance is quite high. If the calculated result does not fulfill your service requirements, you can adjust the number of centers, which in turn would increase the service level.
Adjusting the number of centers
To increase the service level, you can easily adjust the number of centers with the slider control as shown below. After you have adjusted the number of centers, click on the “Calculate” button again to recalculate.
Check the new results
Adjusting the number of centers increases the service level. You can repeat the last two steps until your requirements have been fully met.
Simulate expansions in new regions
You can also use the Center of Gravity App to simulate changes in your demand or possible expansions in new regions. Just add your potential customers with the estimated revenue to your input data and start the calculation again. In the example below you can see a simulated expansion into the French market.
Center of Gravity Tutorial
_____
Learn how to run multiple Center of Gravity analyses and compare different scenarios.
Combine Center of Gravity with other tools
_____
Achieve better results with our recommendations.
Distances
Calculate distances on street level worldwide.
Network Design
Calculate the optimal number and locations of your warehouses.
Geocoding
Translate worldwide addresses to coordinates and vice versa.
