Client Case Study – Global Network Design
Where in the World Should We Be?
A global manufacturer of semiconductor products was utilizing two main global distribution warehouses, located in the Asia-Pacific region. The facilities were beginning to experience some space constraints as well as some business model and operational changes that were affecting the logistics flow.
It was decided that the first step in evaluating the network was to perform a study to determine if the current network was still optimal given the changes and if it was not optimal what should the optimal network look like.
The Modeling Process
Establish utilized it’s global modeling expertise as well as the CAST (global supply chain modeling software from Barloworld Optimus) to design the optimal network.
With a portfolio of over 10,000 different products, strict delivery requirements of 48 to 72-hour delivery, and a diversified group of end customers in North America, Europe, Asia, and the Middle East, the model needed to be both flexible and precise to deliver the optimal network configuration.
Data was gathered from multiple sources on different continents to represent the total supply chain flows and costs for products moving through the network.
After gathering all of the data, a baseline model was developed that was an accurate representation of the current supply chain network. This model was used as the basis for comparison of all of the subsequent model runs.
A New Configuration
After numerous model runs, including changes in physical locations and number of locations, transportation modes, delivery requirements, potential customer changes, and product characteristic variations, there was an alternative configuration that was more cost effective with similar delivery service levels.
The new configuration was not a totally new configuration, rather a combination of existing locations along with the movement and consolidation of other locations that would produce an optimal configuration.
The company would be able to recognize a 20% savings in total supply chain costs by moving to the new configuration, and the process to migrate to the new network was undertaken.
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