Importance of Network Design in Global Supply Chain
The global supply chain is the network of product supply in the whole world. The Supply Chain Network Design Engine utilizes simulated annealing to work quickly arrive at a feasible solution. All these design engines help's to select the best option that helps to understand the impact of different drivers on network design.
Supply Chain Network Design
At the global level, geographic condition for supply chain is the point of consideration, because this is the core of supply chain. Other factors like customer base, warehouses, facilities are the vital part but in comparison of geographic conditions, the impact is lesser.
By analyzing updated information on the cost of labor, tax policies, transportation costs, and production capacity, the company will be actively evaluating the cost-benefit of certain geographical sites with others, to ensure that it is not missing out on potential savings.
Conventional supply chain management targets the operational aspect of businesses, whereby inventory levels need to be analyzed on a month to month basis with corresponding customer demand and operational issues. Network design, on the other hand, presents a more strategic viewpoint to capturing the dependencies between distinct operational units.
When companies examine their network design every two or three years, they have the opportunity to reconsider the various benefits and trade-offs associated with different sites. By making decisions on the placement of facilities and the selection of suppliers, companies empowered to restructure their supply chain to maximize profitability.
At the global level, with the same strategy managing supply chain is not easy it needs lots of input. The reason behind that fact is about the environment conditions and customer demands are changing country by country and state by state. All global players mostly use the local player in their supply chain and this strategy is running successfully with most of the players.
In starting it may happen that the basics are different but in the corporate world now people always welcome valuable suggestion and improvement from other big players.