Our Guiding Principles

To optimize your distribution network design process we follow four key principles:

We evaluate more than just facility locations

The primary goal of distribution network design is to determine the optimal location & mission of facilities. But there are numerous other parameters that can have an impact. Distribution center design is one important example, as changes within the four walls can significantly influence the overall distribution network design.

We apply systems thinking

Logistics networks are systems in which an arrangement of parts (warehousing, transportation, inventory) interact within the system’s boundaries (supply, demand). To evaluate strategic design changes, we only use computer models that reasonably reflect the behavior (activity, resource, cost drivers) of these interactions.

We put modeling accuracy first

Though strategic in nature, distribution network design also requires ‘tactical’ design accuracy and the use of reliable mathematical models. This is needed to consider a more comprehensive range of design parameters.

We recognize software limits

Commercial supply chain design software wrongly assumes distribution network design can be solved through mathematical optimization against a single cost objective. However, in reality, only by evaluating alternative designs against a broad range of financial & non-financial criteria (some of which is highly subjective) can the optimal strategy be developed. Software can’t do this – only human decision makers can.

Key Features of AGILE Network Design

Comprehensive Design Parameters

We consider a broader range of strategies in three core design areas:

  • Logistics Network Design
  • Distribution Center Design, including Storage & Handling Systems
  • Transportation

For more information, see our Network Building Blocks

Distribution Center Modeling Accuracy

Within our network design process, we apply facility design principles that are more commonly reserved for detailed design projects.

  • Storage & handling systems developed to satisfy SKU-driven capacity requirements (inventory, selection, throughput)
  • Facility layout & sizing based on the design-year requirements of individual subsystems or chambers
  • Accurate direct labor requirements & costs with activity-based costing of individual work type & sub-system using time / distance productivity calculations

Transport Modeling Accuracy

We address the specific aspects & requirements of multi-stop retail / wholesale transportation.

  • Trailer load building, including order pallet-building (or other load carrier) using logical design rules based on weight / cube breaks & trailer capacity
  • Private-fleet costs with route costing based on key drivers of route distance & travel / stop time
  • Outsourced freight with the direct integration of carrier rate tables into transport modeling
  • Multi-stage & multi-leg routes, incorporating crossdock terminals, cross-yards, empty / return legs, trailer repositioning
  • Inbound transport with costs based on vendor shipping terms

Proper Treatment of Financials

We bridge the gap between logistics & finance.

  • Financial statements mapped to logistics operations working directly from client financials to build scenario-based economic maps for every defined strategy
  • Proper baseline development with options generated for individual demand scenarios, each capacity-checked & adjusted to ensure feasibility for each year of the planning horizon
  • Proper economic analysis with all options evaluated using the same capital budgeting methods employed for project investment analysis

Iterative & Knowledge-Building

To zero in on the optimal strategy & design, we go through a logical process that involves:

  • Deploying custom business intelligence tools & center of gravity analysis tools to generate viable distribution strategies
  • Applying a logical parameter-based system to define unique strategies
  • Integrating best-of-breed software tools to model with unprecedented accuracy
  • Networking powerful computers & batch processing to model numerous relevant options
  • Generating an extensive range of outputs to better understand & evaluate results
  • Developing valuable insights from multiple rounds of modeling to help identify potentially better strategies
  • Continuing the iterative process by modeling & evaluating all relevant options until an optimal strategy is produced

Strategic Decision-Support

We develop effective strategies that account for future demand uncertainty by answering questions such as:

  • Do we proceed with the most financially attractive option or opt for one that offers more balanced returns against multiple demand scenarios?
  • What would be the trade-offs of postponing a decision or deferring an investment?
  • What profit is sacrificed in return for future decision flexibility?
  • By committing to a particular strategy, which options will still be available in the future and which will become prohibitively expensive?

Extensive Outputs

To ensure your network design team makes best-informed decisions, we will supply them with every relevant detail including:

  • Complete Network Diagnostics
  • Key Inputs & Assumptions
  • Annual Labor Requirements
  • Storage & Handling System Requirements
  • Facility Layout & Sizing (including CAD layouts)
  • Facility Assortment Plans
  • Customer-SKU Fulfillment Policy
  • Detailed Financials (including proforma financial statements)
  • Business Case Quality Outputs
  • Network Planning & Implementation Roadmap

Client Benefits

Identify Your Optimal Strategy & Design

You benefit from a definitive process that is entirely designed to produce the optimal solution by:

  • Considering all relevant design parameters & strategies
  • Offering unprecedented operational & financial accuracy
  • Following a knowledge-building & iterative process
  • Facilitating strategic decision-support to better manage future uncertainty

Achieve Greater Strategy Buy In

You will never have to be convinced of the best course of action because our strategies are based on:

  • A clear comprehensible process that uses proven logistics design principles
  • Extensive detailed outputs that enable fact-supported decision-making
  • Process transparency that actively encourages your participation & scrutiny

Ramp Up Sooner

You will implement sooner because:

  • We apply integrated software tools across design and implementation within a process that is managed by the same practitioners
  • We secure faster CEO and Board approval through business case quality outputs & financials
  • We can shorten or sometimes eliminate the subsequent detailed design phase

Rest Assured

You can sleep at night confident and reassured that recommendations made at the strategic design stage will be fully implemented, as promised

Distribution Network Design