When we talk about a distribution network, we refer to the supply chain management; in other words, we talk about the steps a product takes to get from the manufacturer or supplier to the final client.
Making this process efficient is essential for a company’s profitability because it involves operation costs that, in the end, impact the experience of our product’s user.
When we design a commercial distribution network, we are going after several goals, which may vary according to the business focus, it may be saving on costs or issues related to corporate responsibility. Therefore, the way distribution networks are planned may vary from one company to the next, even if they work in the same sector.
Moreover, a distribution network is one the main assets a company should assess and analyze constantly because its design affects the operational excellence, the level of service, and on-time deliveries. In this sense, many companies base their business model on the design of this logistics network, looking to optimally configure all their physical resources, which may include distribution centers, fleet, warehouses, cross docks, manufacturing plants, coordination with suppliers, and others.
There are several types of distribution networks according to the company’s needs and logistics requirements:
Companies may choose one or several types at the same time, depending on their needs and budgets but always keeping in mind that all the elements involved in designing or redesigning the network have an important relationship between them. Inventories, transport, infrastructure, and information should reach a balance in costs to result in the best possible distribution strategy.
Therefore, the efficient design of a distribution network becomes more relevant because it optimizes resources, saves on costs, and outlines the supply chain stage where it meets the end consumer, aiming always to provide quality services, a factor that often determines the competitiveness of a logistics supplier.
Redesigning a distribution network, or designing one from the start, should yield benefits like optimizing the company’s total logistics costs, improving service levels for intermediate and final clients, increase flexibility, improve the response capacity, and many others. In short, according to the experience of Accenture Mexico, the benefits of a distribution network focusing on the market are:
Hence the importance of putting time and effort into the creation or redesign of the distribution network, based on these considerations:
Having an efficient logistics distribution network implies reaching a balance between the level of service and the reduction of costs.
To meet these goals, the design or redesign of a distribution network should follow this process:
The key for turning your distribution network into a competitive advantage is to focus it on clients.
Customer satisfaction should be your main goal; aiming to reach a balance between the efficiency of the supply chain and the optimization of resources.
By integrating logistics solutions, Solistica offers clients the optimization of their supply chains with a distribution design that focuses on their current needs and with the potential of escalating it as their logistics processes adjust to meet the changes in the market.