Network Optimization: Don’t Fall Into the “Single Best Answer” Trap
September 13, 2012
Network optimization software solves the complex equations that help distribution center (DC) operators determine the configuration of their supply chain networks along with the optimal number, location, and size of these centers to effectively support their business models and growth projections.
Ultimately, the optimized network model is the one that generates the maximum amount of flexibility and cost savings while at least meeting, if not exceeding, required service level expectations. Sophisticated software analysis cannot do this alone. Often there are several future-state scenarios that project significant savings on paper, but may not be realistically attainable. A creative quantitative analyst and an experienced supply chain management practitioner are critical to the process of systematically identifying and evaluating which models are practical in terms of real-world logistics, i.e., the unique requirements a standard out-of-the-box software system cannot incorporate.
This paper will discuss the relative efficacy of standard network analytics software packages vis-á-vis the custom-configured optimization model with its inherent adaptability and flexibility.