the 3 golden rules of optimizing network design process:

1)The decision to allocate volumes and markets to plants is an important decision in the overall tactical decision system for the firm. The decision to locate these plants in locations where it has decided to is an important network design decision, which has significant implication on the supply chain performance

1)Firms can use linear programming model to decide an optimal network design and operations Deciding optimal location of services in a model a) where consumers need to walk in everyday involves different considerations as opposed to a model b) where “ its corporate employees are located at one point and with c) where its manufacturing locations are located across the country

2)Network design involves large amount of data , converting large amount of data into meaningful structured data into insights

3)Global firms spreads out their risks by having their manufacturing plant as dispersed across geographically possible and keep their excess capacity in network as a hedge against uncertainty in markets and prices of finished products and raw material

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Is your Supply Chain at risk due to Network Design failure

 Mitigating  your supply chain risk  during network design disruptions: 5 ways to  handle the supply chain risk

 1)INCREASE CAPACITY : Focus on low cost decentralisedGet capacity for predictable demand 

2)GET REDUNDANT SUPPLIERS :Get redundant supplies  for high volume demand and low redundant supply for low volume demand 

 3) INCREASE RESPONSIVE : Give  preference to  cost over responsiveness for a commodity item which has a long life cycle.In contrast   increase responsiveness over cost for shorter life cycle products 

 4)INCREASE INVENTORY: Decentralize inventory of predictable lower valued goods and decentralize unpredictable and higher valued goods or products 

5)INCREASE FLEXIBILITY : Favor cost over flexibility for high volume products. In contrast, favor  flexibility over cost for low volume products

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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.

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