December 9, 2011

Designing the Distribution Network in a Supply Chain



Factors Influencing Distribution Network Design

Why do you require a distribution network between manufacturing facility and customer location?

The performance of no distribution network system or a distribution network in place or proposed has to be evaluated on two major dimensions.

1. The customer needs that are being met.
2. Cost of the network or costs incurred in the meeting those needs.

The distribution network can change the satisfaction of the  following customer needs that differ from product to product as well as from  distribution outlet to distribution outlet.

Response time
Product variety
Product availability
Customer experience
Order visibility
Returnability


When customers demand less response time, the firm needs more outlets close to the customer. When customers are happy with larger response times, the firm can more centralized facilities.


Updated 2.1.2013

Paper by Sunil Chopra - Available on his web page
http://www.kellogg.northwestern.edu/faculty/chopra/htm/research/deliverynetwork.pdf


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