6 supply chain drivers that impacts distribution network design

6 supply chain drivers that impacts distribution network design are

1) inventories
2)Transportation
3)facilities and handling
4)Response time :The other 2 drivers are 5) sourcing and  6)pricing

INVENTORY AND AFFECT ON SUPPLY CHAIN  a)As the number of facilities in the supply chain increase the costs also increases .To decease the inventory costs ,firms try to consolidate and limit the number of facilities in supply chains c)For example with fewer facilities Amazon  is able to turn its inventory 10 times a year, where as Barnes and nobles , with hundred of facilities is able to turn its inventory 3 times a year.

2) TRANSPORTATION AND SUPPLY CHAIN Transportation : Inbound transportation costs are the cost involved for bringing material into the factory.While outbound supply costs consist of  goods are transported out of the facility Outbound transportation costs per unit tend to be higher than inbound costs because the inbound lot sizes are typically larger

3) FACILITIES  PLANNING  AND SUPPLY CHAIN facility cost decreases as the number of facilities decrease because consolidation of facilities allows firms tro exploit economics of scale 4)Response time : if the firm wants to reduce its response time it might have to increase the number of facilities beyond the point that it minimizes logistics cost.