Network Planning: Suppliers, Manufactures, Distributors, Customers

Network Planning
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Network Planning
The main aim of having logistics in an organization is to minimize resources and save time as well. Several considerations should be made when designing an optimal logistics network for a single warehouse. For an optimum logistics network, a hierarchical approach is necessary since the decisions on network design, inventory management, and utilization of resources are combined to reduce costs and improve the quality of services in the warehouse.
Logistics network designing involves making decisions on sourcing size, location, and number of manufacturing plants. Inventory management decisions such as stocking points and stock selection facilities that will be used to place orders and keep minimum inventory. Also the decisions on the production and packaging of different products need to be done and ensure that it is done at the right facilities. The sourcing strategies need to be done and how much should the plants produce to meet the demand (Zhang, Li, & Qin, 2014). Therefore an optimal logistics network should look like this:
SuppliersManufacturesDistributorsCustomers
After the raw materials have been received from suppliers and products have been manufactured they are kept in a warehouse. They become stock of goods while in the warehouse and include raw materials, finished products, and work in progress (WIP). Having a single warehouse means a company has less space; therefore, a warehouse manager should manage the inventory in an effective manner. Effective management of the inventory ensures that the right inventory is at the right place at the right time. This will help in designing an optimal logistics network that will reduce costs in the company while providing quality services that will satisfy the needs of the customers (Fleischmann, Bloemhof-Ruwaard, Beullens, & Dekker, 2004). Since there is only one warehouse, the company should have an inventory policy, which is an approach that is used in determining how the inventory of the firm should be managed. The characteristics of the supply chain of the company should be observed when developing an inventory policy. The demand level of the customers should also be known to avoid wastage of resources. The demand can be known from historical data and through possible estimations of variations. The managers of the company should also consult each other to agree on what quantity of products the company should produce, stock, and distribute to their customers with the one warehouse that they have (Das, & Chowdhury, 2012). This will allow them to avoid overstocking of products in the warehouse that will reduce space and increase of costs such as maintenance, holding, insurance and transportation costs.
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