In an age of high fuel and labour costs which form a high percentage of the overall supply chain costs, it is imperative that efficient customer to warehouse allocations are in place.
This will help maximise vehicle productivity and minimise inefficient running, but the question remains of how many warehouses or stockless depots should there be, how big should they be, and where should they be located.
To solve this problem, Model Logic have developed the NetworkMOD tool which considers multiple warehouse combinations and calculates the primary transport, secondary transport, site costs and inventory holding costs for the underlying factory, warehouse and customer base.
The model takes into account the land prices, rent and rates by postcode sector, transport operational costs, warehouse activity costs, and resultant warehouse throughput for all possibilities.
For example from a possible 25 sample warehouse sites, if the end user requires a 2 warehouse solution, then the model would generate 325 scenarios, and report the costs and allocations for each one.
If the user requires a 3 warehouse solution from a sample of 25 potential sites, then the model would consider 2600 scenarios.
If the user requires a 4 warehouse solution, then the model would consider 14,950 scenarios.
Both the number of warehouses required, and the warehouse sample sizes are both end user inputs, and the model results give a very useful overview of the relative costs of the various warehouse combinations under consideration.
For further detailed daily secondary transport routeing and scheduling of the least cost solution, then the NetworkMOD results can be exported directly into our RouteMOD (VRP) model.
In this way, for secondary transport or radial distribution we can link the strategic overview with the detailed daily routeing, as well as providing useful mapping of the solution.
The model has been used in the construction and food processing industries.