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SCM Session 7 - Network Design Strategy VKw670eBfh

The document provides information about a session on network design strategy for supply chain management at the School of Business, Management, Navi Mumbai Campus. It discusses network planning and design, considerations for success like customer service and costs, factors influencing decisions, and frameworks for network design including data collection, supply chain strategy, network optimization models, and configuration using supply chain planning tools.

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41 views

SCM Session 7 - Network Design Strategy VKw670eBfh

The document provides information about a session on network design strategy for supply chain management at the School of Business, Management, Navi Mumbai Campus. It discusses network planning and design, considerations for success like customer service and costs, factors influencing decisions, and frameworks for network design including data collection, supply chain strategy, network optimization models, and configuration using supply chain planning tools.

Uploaded by

apoorva vedpathak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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SCHOOL OF BUSINESS

MANAGEMENT
NAVI MUMBAI CAMPUS

Trim IV

Supply Chain Management


Network Design Strategy
Session 7

Prof. Anurag Garg


Network Planning

A process to design and plan the supply chain network in order to –

❖ Match supply and demand under uncertainty by positioning and managing inventory
effectively,

❖ Find the right balance between inventory, transportation and manufacturing costs,

❖ Utilize resources effectively by sourcing products from the most appropriate


manufacturing facility.
Network Design

Network design involves taking decisions and determining the following –

❖ Appropriate number of facilities like plants and warehouses.

❖ Location of each facility

❖ Size of each facility

❖ Layout and space utilization in each facility

❖ Sourcing required

❖ Distribution strategy.
Considerations for success in Network Design

Customer Service Factors Costs Factor

• Quick Response Time • Inventory costs


• Large Product Variety • Transportation cost
• Easy Product availability • Handling Cost including
• Order Visibility facilities cost
• Returnability • Information cost
Factors influencing Network Design Decisions

Socio-
Competitive
Economic
Factors
Factors
Macro-
Infrastructure
Economic
Availability
Factors

Technological Political
Factors Factors

Strategic Network Comparative


Factors Design Costs
Framework for Network Design
Data Collection and Aggregation

❖ Locations of customers, retailers, existing warehouses, manufacturing facilities and suppliers.

❖ All product details, including volumes and special handling needs ( e.g. refrigeration).

❖ Annual demand for each product, by location.

❖ Transport modes, rates, availability.

❖ Warehousing costs, including labour costs.

❖ Shipment sizes and frequency of delivery.

❖ Order processing costs.

❖ Customer service requirements and goals.

❖ Production and sourcing costs and capabilities.


Phase I – Supply chain Strategy

A. Organization's Competitive Strategy -


▪ Defines set of customer needs that it aims to meet through its products and services.

B. Value Chain Perspective –


▪ Product Development /manufacturing / sales & Marketing Strategy
▪ Supply Chain strategy and achieving strategic Fit.

Finance, Accounts, IT, HR


New Product Marketing
Operations Distribution Services
Development & Sales
Network Optimization models

• Which markets to address and what regions to go to ?


• Evaluate Regional Demands, tariffs, economies of scale
Phase II – and costs.
• consider regulatory environment, geo-political situation.

• Identifying and evaluating specific sites and locations for


Phase III & IV – facilities.
• Assessing all costs associated to a location.

▪ Use of Supply Chain Planning tools ( SCP tools) for Network configuration.
Thank You

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