Logistics Strategy
Logistics Strategy relates to the establishment of warehousing and distribution infrastructure, encapsulating postponement and value-add activities, inventory control methods and rules. The objective for logistics strategy is to minimize logistics cost while offering the right level of flexibility to meet customer requirements.
Key questions
- What is the best logistics strategy that minimizes cost while maintaining or improving serviceability?
- What is the best inventory management strategy?
- What is the best warehousing and distribution strategy – direct ship from suppliers, vendor-managed inventory, cross-docking?
- Where is the center of gravity of demand for a given geographic region?
- Which 3PL partners should be chosen for transportation and warehousing?
Logistics Strategy and SimFlex
SimFlex provides unique capabilities for logistics strategy by combining order-by-order simulation with realistic inventory and consolidation rules. This results in realistic order sizes, carrier loads and inventory levels. Each logistics strategy can be quantified using key metrics, such as logistics cost, customer lead-times, service performance, inventory levels, warehouse space, carrier loads, transportation flows.
Return Strategy
The management of product repair, rework and disposal is as complex, if not more, than the management of the traditional, forward supply chain. In the case of product failures, the inability of a company to meet turnaround time requirements can be devastating to customer relations, causing millions in lost future revenues. Additionally, government legislation (such as WEEE in the EU) has raised companies’ accountability (including the burden of cost) in ensuring that their products are disposed of efficiently and in recognition of strict environmental guidelines. Having a lean, cost effective reverse logistics supply chain can create competitive advantage and help turn a difficult business challenge into a significant opportunity.
Key Questions
- What is the true total cost of reverse logistics operations?
- What reverse logistics network will meet customer turnaround requirements at the minimum cost?
- What level of activity should be carried out at each return site?
- How much spare parts inventory should be kept, and where should it be positioned?
Return Strategy and SimFlex
SimFlex can quantify any potential return strategy from multiple perspectives, including cost, time, and customer service. Optionally, forward and reverse supply chains can be evaluated simultaneously, ensuring that the optimal value chain strategy is structured to suitably support the return strategy.