What is Network Optimum?

The question of the number, size and location of facilities in a company's distribution system is a rather complex issue. A variety of elements make up the distribution mix, and it is necessary to take into account all of these when considering the question of a proper network structure. The complexity of sourcing and location decisions is handled by Network Optimums sophisticated mathematical model which establishes the optimum flows and the optimum number of DCs to serve a system in order to improve the distribution network and efficiency.

Key Features

Positioning of warehouses

Based upon the material flows, the cost and type of transport and operational guidelines, Network Optimum allows you to analyze and determine the ideal number of facilities and their optimal location.

More than 5 000 locations available in Europe, Turkey, Ukraine and Russia

Network Optimum allows you to choose between more than 5 000 locations in Europe, Turkey, Ukraine and Russia. These locations have typically more than 20 000 inhabitants. The location quantity and specification can vary depending on each of the client's particular needs.

Calculation of transport costs, inventory costs and warehouse costs

Transport costs are in most cases a large part of the total operational cost of physical distribution of goods. Network Optimum allows calculating the difference in cost between a warehouse in the optimal location and a warehouse at a suboptimal location.

Network Optimum enables its users to evaluate its existing distribution and sourcing logistics operations and to simulate the effect of other parameters.

It allows the user to enter a wide range of data, including network outlets (clients, suppliers), network nodes (distribution centers, consolidation hubs), transport methods, costing parameters (transport fleet, warehouse operational costs, etc), product groups and delivery orders. The user can then amend the parameters to simulate alternative scenarios. Each simulation produces a detailed analysis of the associated transport, warehousing and inventory costs, allowing the client to constantly assess its logistics strategy and operations. In addition, it visualizes the client's existing and optimized logistics network.

Modeling of consolidation hubs

The costs of transportation and warehousing dominate the retail distribution costs. The transportation expenses can be lowered by the introduction of consolidation terminals and direct shipments. In these consolidation centers (CC) goods are usually "cross-docked": typically, storage takes place for only a few hours. We define two sorts of consolidation centers:

Sourcing consolidation centers: small shipments arriving from suppliers with a relative small number of pallets are grouped into larger shipments. From the CC these new shipments are shipped to the DC(s).

Distribution consolidation centers: larger shipments arriving from the DC are split into smaller shipments that are leaving for the shops.

We consider the possibility of combined sourcing- and distribution centers; hence trucks can profit from reverse logistics.

Detailed Features

For detailed features and software capabilities on Basic Data Management, Network optimization and visualization and Cost Calculation feel free to contact us.

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