The need to perform a global review of your distribution network is driven by the continuous demand to reduce total network operating costs, while constantly maintaining or improving customer service levels.

This type of study is often the result of one of the following:

• Acquisition - how can one consolidate distribution?
• Merger - two or more companies or product categories
• Growth - lack of existing capacity due to increased sales, new retail point-of-sales, addition of product lines
• Customer service level demand - customer demands shorter delivery lead-time and improved order fulfillment
• Downsizing - decrease in sales and/or customers, elimination of product categories
• Evaluation - benchmark your transportation & operational costs, or those of your wholesaler

Any of these situations will generate the following initial questions:

• How many distribution centers (DC) are required?
• Where should the DC be strategically located?
• What product mix is required per DC?
• What are the associated operational costs?

Group 4L² utilizes proven methodologies in conjunction with powerful software enabling us to incorporate large amounts of historical data and easily produce multiple scenarios for comparison. Although the tool is very powerful, it remains flexible enough to allow us to easily model your existing network and to compare all future scenarios for impacts on your distribution requirements.

Many factors are considered in the equation for determining the optimal location(s) such as;

• customer and supplier locations
• customer and supplier volumes
• taxes, insurance & service fees
• availability of workforce
• local salaries
• mid to long-term corporate objectives

The scenarios modeled may include:

• A single DC
• Multiple DCs
• Regional fast with centralized slow-mover facilities
• Cross-docking
• etc.

The results include facility sizing requirements, modeling operational & transportation costs, resource & equipment requirements and all capital investments. Once evaluated and reviewed a Return-on-Investment (ROI) will be calculated for each scenario.

At Group 4L² we understand the amplitude and importance that these decisions represent for a company. This is why we work hard at incorporating the most data possible in our evaluations to ensure that our models most closely reflect reality. Before investing large sums of money it is important to collect and analyze as many relevant decision factors as possible to create and model scenarios that are easily adjusted, evaluated and compared.

Some key questions that should be answered prior to investment are:

• Cost to build?
• Cost to operate?
• Resource requirements and availability?
• ROI?

For the answers to these types of questions and more contact us today to see how we can work together towards achieving YOUR objectives.