Network Planning

Abstract

The demand and supply planning methods described in earlier chapters are required for ensuring that a company is performing the tactical steps required to align supply with demand, which will support high customer service and fill rates and minimize cost variances. However, operating metrics and profits are also dictated by the cost structure of the supply chain, which includes purchase prices for raw material, facility costs, labor costs for manufacturing and distribution, and transportation costs across the network. This analysis of the network for opportunities is one of the areas of supply chain management that is performed poorly or inadequately by most companies, largely due to the difficulty related to data gathering and use of analytical models. This chapter covers simple processes and approaches for analyzing the network, and easy-to-use models for performing quantitative analysis.