Network Planning Issues - Essay Example

Network Planning Contents Contents 2 Introduction 3 Discussion 3 Steps for optimal network 3 Required information for the process 4 Strategy to be employed in this network 5 Conclusion 6 References 7 Introduction Network planning in logistics can be defined as a set of tools that is required so as to perform analysis of the inventory levels, transportation costs and warehouse locations so that these elements are able to support effectively the level of customer service. Network is one of the best scientific methods that are used to analyze and determine the services and the costs that need to be met by the warehouses so that the specified objectives of the customer service can be addressed. The company that has a single warehouse has a different network planning model that is needed to be followed in comparison to those having many regional warehouses. Discussion Steps for optimal network The network planning model refers to a smooth structured approach that eliminates some of the redundant elements from the system so as to obtain an optimal network. The logistic network for a single warehouse needs to encompass all the essential elements of the logistic activities so that there is smooth flow of products and information along the logistic chain consisting of a single warehouse. The single warehouse would serve as a centralized warehouse for the overall business operations and would comprise of all the necessary facilities that would be required for the effective coordination amongst all the other elements encompassing marketing department to the customers (Radhakrishnan, 2001). The first step that would be essential for the network design would be proper analysis of all the required information of the company’s operations. This information analysis would enable in incorporating the best strategy for the logistic network. Since there would be a single warehouse that needs to be centralized and handle all of the operations starting from inventory keeping to that of semi-finished or finished products it is very much important to decide on the size and location of the warehouse that would be the next step of the logistic network planning. The next step in designing this optimal network would be calculation of the facility and transportation costs. There needs to be a proper estimation on what are the major costs that is associated with the logistic framework that would be required in the network set up comprising of single warehouse (Waters, 2010).The next step for the design of optimal network would be consideration of various facilities such as vendors, manufacturing center, customer service and the distribution center. These facilities need to be given importance as there is continuous flow of finished products and raw materials amongst these facilities (Ross, 2004). The most essential step for this optimal network design would be involving the higher management in the process. In the planning phase of the network design all the departments of marketing, operations, sales, and manufacturing needs to be involved so that the single warehouse is able to meet all the requirements of the different departments. Required information for the process The design of the optimal network of the logistic system that comprises of a single warehouse requires proper information and data that is to be analyzed as it forms one of the critical areas of the business operations. The logistic network design does not only encompass the manufacturing process and delivery of the goods to the customers or the end users, but it comprises of various sub parts that needs to be considered so that the network planning proves to be effective (Gudehus & Kotzab, 2012).In order to execute the steps that are designed for the planning of the optimal network the most important information is about the costs that is related to the company’s operations. All of the departments of the company that is manufacturing, sales, customer service, distribution, etc., need to be aligned and give the valuable information that would be required in the planning process. The incorporation of all the information that is given by these departments would be able to portray as to what are the important activities that needs to be handled effectively while designing the optimal network (Ghiani, Laporte & Musmanno, 2004).The major information required would be the different operations that are undertaken by the company so as to meet the desired level of customer service. Strategy to be employed in this network The concept of using a single warehouse in the logistics network reflects the overall cost reduction and complexity that is often noticed when there are more of regional warehouses as it makes the operations of the company distributed. The first strategy that is employed in such designing of the logistic network is the cost reduction and optimal utilization of the resources that are available. The network would comprise of all the departments and activities performed by the company and the approach would be more of centralized and not distributed in nature. The presence of a single warehouse indicates that inventory handling and distribution of the finished products would be processed through this warehouse which would enable not only cost reduction but a more tight control over the operations of the company (Schönsleben, 2003).The major strategy that is to be employed in the network would be effective utilization of all the elements that are present in the logistic chain at the minimum cost possible so that the level of customer service and demand can be effectively met by the company. The network would require efficient coordination amongst all the departments so that there is smooth flow of information and data across the network and the major responsibility of a centralized warehouse is to facilitate such coordination and monitor the entire logistic process. However the most important strategy is to reduce the cost factor and make the system more of centralized so that the structure is competitive in nature and meet the standards of an effective logistic design. Conclusion Network planning is a scientific tool that helps utilizing the available tools in the most effective way at the lowest cost possible without any form of compromise with the performance standards or the level of the customer service. The logistic design with a single warehouse requires certain information that needs to be considered so that all of the activities are effectively synchronized. The transportation, manufacturing and distribution costs need to be analyzed properly so that there is no such flaw in the network planning. All the key personnel in the system need to be incorporated in the optimal network planning so that the entire process can work successfully. References Radhakrishnan, P. (2001). Logistics and Supply Chain Management. New Delhi: Allied Publishers. Waters, D. (2010). Global Logistics: New Directions in Supply Chain Management. Hong Kong: Kogan Page Publishers. Ross, D.F. (2004). Distribution Planning and Control: Planning and Control: Managing in the Era of Supply Chain Management. USA: Springer. Gudehus, T., & Kotzab, H. (2012). Comprehensive Logistics. New York: Springer Ghiani, G., Laporte, G., & Musmanno, R. (2004). Introduction to Logistics Systems Planning and Control. Great Britain: John Wiley and Sons Schönsleben, P. (2003). Integral Logistics Management: Planning and Control of Comprehensive Supply Chains. USA: CRC Press Read More