AGILE Logistics Design

What is AGILE Logistics Design?

AGILE Logistics Design is a decision-support-system (DSS) that addresses the unique requirements of case-pick & unit-pick operations prevalent in retail & wholesale distribution. Our DSS comprises:

  • Structured but flexible modeling framework that improves decision quality & shortens project delivery time by leveraging available client data sources in an adaptable way
  • Third-party software applications, such as routing & mapping, CAD, spreadsheet, data visualization and business intelligence, as well as proprietary programs written in SAS® programming language
  • Application of principles from logistics network design, distribution center design, storage & handling systems design, warehouse slotting, inventory management, activity-based-costing & project finance
  • Logistics expertise, judgment & business acumen

AGILE Addresses Three Design Areas

AGILE integrates three inter-related logistics design areas:

  • Distribution Center Design & Optimization
  • Logistics Network Optimization
  • Logistics Network Strategy & Design

We solve each using our AGILE modeling framework, which has the same fundamental goal of deploying logistics resources in a manner that best satisfies future demand.

Uniquely Effective For Distribution Network Design

Our AGILE process was principally developed to be an advance in distribution network design for those networks that ship in less-than-pallet quantities (cases / totes / inners / units).

Our solution matches the strengths of existing supply chain design software, but without the attendant shortcomings.

The Incumbent Solution: SCDS

Supply Chain Design Software (SCDS)

Supply Chain Design Software (SCDS) is commonly used to design or optimize supply chain networks of plants, suppliers & distribution facilities.
The same software is also used for distribution network design with the focus exclusively on the distribution-related portion of the supply chain (distribution centers, warehouses, terminals)

How SCDS (essentially) works

A user loads the software with a variety of cost assumptions, plus existing & potential facility locations. SCDS uses linear programming to identify the specific network layout that optimizes a single objective, which is typically annual cost minimization.

SCDS Strengths

SCDS is a user-friendly tool that can evaluate many network configurations relatively quickly, no matter how large or complex the network.

SCDS Weaknesses

SCDS’ shortcomings are particularly apparent in distribution networks shipping less-than-pallet quantities (case-pick or unit-pick).

  • The SCDS model wrongly assumes that a distribution center will have a single handling (variable) cost rate that remains fixed under alternative facility demand profiles (order/assortment/customer). This is a fundamental failing that cannot resolved when relying on mathematical optimization
  • Due to data aggregation, SCDS cannot calculate distribution center labor costs by work type (receiving, putaway, letdown, selection, packing, loading, etc.)
  • SCDS wrongly assumes facility throughput relates directly to fixed costs as a step-cost function; such an assumption creates unrealistic marginal costs
  • SCDS uses facility throughput as the primary driver of distribution center capacity, which is rarely the bottleneck in SKU-intensive case-pick or unit-pick distribution centers
  • SCDS considers facility location as the primary design parameter & cannot consider all relevant network design parameters to formulate network strategies
  • To identify the optimal network, SCDS optimizes against a single criterion though there are actually many criteria (financial and non-financial) that should be jointly considered

AGILE vs SCDS

AGILE overcomes SCDS’ key shortcomings while duplicating its core strengths.

  • Replicates SCDS’ scalability in terms of relevant options
  • Identifies & evaluates all relevant strategies, including facility design and storage and handling system design
  • Accurately models all options and not just the finalists by using sound design principles logisticians can understand & validate
  • Relies on experts to ask the right questions, while deploying computer modeling to answer these questions accurately & quickly

AGILE Modeling Framework