SCM 303 Lecture 18: Network Design & Integrated Logistics
Document Summary
Network: the number and location of facilities, and the linkages between them for both information and material flow. Design: implies intentional action vs. organic/evolutionary growth over time: network design is a major driver of supply chain performance. Organic network growth: build factory with attached warehouse, accommodate market growth as long as possible, build another factory with warehouse, repeat. Service levels: look for patterns and clusters, balance economies of: Network dimensions: vertical integration: how much of the supply chain is outsourced, flexibility: ability to respond to changes, cooperation: strength of integrated info within network between network and customers, geographical dispersion. Facility location factors: cost: land, taxes, customer service level: service level, accessibility: transportation (inbound and outbound), proximity to customers, availability: labor, materials. What is integrated logistics: management of entire logistics chain as a single entity, instead of separate management of individual logistics function, facilities and assets must function as a network rather than independently.
