Designing Distribution Networks And Network Design

Designing Distribution Networks and Network Design
Name
Institutional Affiliation
Date
Manufacturer storage with direct shipping network
Strengths
* Lower cost of inventory compared to others due to aggregation (Chopra & Meindl, 2016).
* The design offers a variety of items with ease.
* It is a fast model in terms of market delivery.
* The design allows for easy product availability as the customer orders directly from the manufacturer and direct shipping makes it easy (Chopra & Meindl, 2016).
Weakness
* Long lead time due to the long response time of about two weeks caused by distance and two stage order processing (Chopra & Meindl, 2016).
* Disaggregation of shipping and increased distance, the transportation costs for this design is high (Chopra & Meindl, 2016).
* Once the item is out of the manufacturer returnability is difficult and expensive making the design rigid on returnability.
* The cost of setting up information infrastructure for efficient information flow between the manufacturer and the customer is relatively high CITATION Mic18 \l 1033 (Hugos, 2018).
Retail storage with customer pickup
Strengths
* Low cost of transportation as the customer incurs the pick-up cost (Chopra & Meindl, 2016).
* The response time to item pick up is immediate as it depends on the customer’s response to picking an item at the pickup site.
* The design offers easier returnability compared to other options as the retail store can offer a substitute for the good purchased (Chopra & Meindl, 2016).
* Has a low lead time thus, making the time to market of a good fast CITATION Mic18 \l 1033 (Hugos, 2018).
Weakness
* Low product variety as the retail depends on the manufacturer’s products limiting the choice of products to customers CITATION Mic18 \l 1033 (Hugos, 2018).
* The cost of inventory is very high as the retail store's several items for the customer.
* The high cost of handling at the pickup sites with high investment in infrastructural development and information at the pickup centers (Chopra & Meindl, 2016).
The retail storage with customer pickup is more suitable for commodity items as compared to manufacturer storage with direct shipping. First, it offers a quick response countering the high demand for commodity items. Second, the design offers a low variety of products. Third, it is convenient for customers on commodity returnability CITATION Mic18 \l 1033 (Hugos, 2018).
The distribution network design for going global depends on whether the firm is targeting sales only or setting up a manufacturing plant. In the case of expansion of operations that includes manufacturing aptitudes, then the best option is the manufacturing storage with direct shipping (Jacobs & Chase, 2017). This method provides easy access to customers with product availability and variety to counte...