Optimum Supply Chain Strategy

For some operations the optimal infrastructure solution is relatively self evident, and easy to determine, for others arriving at the correct solution can be very challenging. This is particularly the case with operations involving international supply chains, where the trade off between transport and warehousing costs is finely balanced or the trade off between different manufacturing methods and logistics is not straightforward.  To cope with the complexity of the problem many companies simplify the task, and resort to ‘averages of averages’, this can lead to important details being missed and an incorrect solution achieved.

Davies & Robson Mixed Integer Infrastructure Model

To assist companies determine the optimum infrastructure our supply chain consultants have developed our own mixed integer infrastructure model to evaluate a range of possible operational solutions quickly and cost effectively.

Typical uses of the model include the following:

• Determining the optimum size & location of warehouses
• Determining the optimum use of cross dock facilities
• Determining use of consolidation centres
• Determining optimum stock levels by product group
• Determining which products should be stored in which warehouse
• Understanding individual and customer profitability
• Evaluation of alternative customer service levels 
• Evaluation of alternative ’what if scenarios’

All infrastructure modelling projects commence by configuring the model to address the evaluation required. Data is normally taken at order line level in order to capture daily and seasonal variations. Costs and productivity standards can either be provided by the client or, if they are not available, we will use our own.

Once the model has been configured and populated with the necessary data it is a relatively straightforward task to run a series of iterations in order to evaluate and refine possible solutions.