Network Design

Putting the right distribution network in place

Things have a way of getting out of hand as you experience growth and face changes in your supply chain or your customer base. Suddenly you have an over-sized, over-extended network that meets your customers’ needs, but isn’t cost efficient. We can help you identify the right number of distribution locations, in the right places.

We’re committed to solving one of your company’s most widespread challenges. It’s our business to redesign logistics networks for maximum speed and flexibility. To ensure every link in your supply chain is strong, our experts assess:

  • Site selection
  • Mode selection
  • Routing
  • Inventory and transport costs

Global Reach, Local Know-How

Our distribution and network design expertise spans multiple continents. With a complete understanding of your specific distribution needs and operational conditions, we’ll be your road map to future success.

We set up your network for speed and efficiency by selecting and analyzing locations for your facilities and integrating them into your supply chain. Our goal is to help you anticipate how the local realities affect operations and address them proactively throughout your network, whether it’s nationwide, regional, or local.

The Connecting Link in Your Delivery Chain

To streamline delivery and improve costs, our experts:

  • Establish the optimal facility assignments within your network
  • Determine the ideal number, placement and size of facilities
  • Coordinate shipping and delivery across all business units
  • Provide actionable transportation mode analysis
  • Offer counsel on continuous realignment
  • Analyze the impact of network changes in sourcing, etc.

6 Common Questions About Network Design

What is Network Design? 

The planning and design of manufacturing, warehousing or distribution facilities, as well as transportation routes, with an emphasis on speed, efficiency, and cost, is referred to as network design. Sometimes it's necessary to revise network architecture to account for changes in the consumer base, the supply chain, or business methods that are more sustainable. For instance, a company may decide to create a more efficient distribution network in order to decrease waste, save money, and lower its carbon impact.

What Are the Five Elements of Network Design? 

The five elements of network design are as follows:

  • Storage, warehousing and materials handling
  • Packaging
  • Inventory
  • Transport
  • Information and Control

Why is Logistics Network Design Important?

Network design is a key component of any supply chain. The main goals of any supply chain design are to reduce costs associated with transportation, working capital, and inventory. Additionally, a stable network design improves visibility, identifies chances for cost savings and minimizes risk.

How Does Network Design Impact the Supply Chain?

The structure of the supply chain and the limits they impose on how the other supply chain drivers may be employed to either reduce supply chain cost or boost responsiveness poses a substantial influence on supply chain performance.

What are the Three Levels of Supply Chain Network Design? 

The three levels of supply chain network design are the strategic level, tactical level and operational level.

The Strategic level involves the creation of long-term plans outlining the organization's overarching objectives and goals falls within this level of supply chain management. It requires determining and evaluating the firm's strengths and limitations, choosing strategically where to concentrate resources, and developing a vision for the future. Such level of planning focuses on long-term choices and takes the larger picture into account.

Tactical planning entails creating detailed strategies to accomplish goals within the parameters of the strategic plan. These plans could include identifying priorities, creating goals, and developing plans to reach those goals. Planning for particular goals and objectives is the emphasis of tactical planning.

The Operational level is defined by putting the tactical strategies into effect to accomplish them. This often involves working with several business divisions to coordinate systems and processes that assist in execution and making sure that all stakeholders are always updated on the status. Operational planning focuses on daily duties and specifies how these tasks should be completed to meet the goals of the business.

What are the Objectives of Network Design in Supply Chain? 

The goal of supply chain network design is to strike a balance between service levels and expenses associated with manufacturing and purchasing, inventory carrying, facilities, transportation, and other costs.

Supply Chain Management

Lead Logistics Provider

Penske understands how to centrally manage and optimize the most complex supply chains.

Consulting Services

Penske understands that you have immediate challenges that require a responsive strategy.

Network Design

Penske can design your network for maximum speed and flexibility, covering every link in the supply chain.