Factors Affecting Distribution Network Design - Buznew.com


Factors Affecting Distribution Network Design

By Christine Smith

For a firm to be successful in its operations, it has to make sure that its products are well distributed until they reach the final consumer. The firm has to set up a functioning system that includes a network of people, storage facilities and transportation that will efficiently move its products, otherwise known as a Distribution Network Design.

There are many products out there that people do not get to hear about because their manufacturers do not employ the best techniques to move the products around. There are different ways to move the products till they reach their desired targets and some of these strategies will be discussed below for further understanding.

Most production businesses are situated quite a distance from the clients who use their products, meaning that they have to put up a strategy that will ensure the goods reach the clients in timely fashion. For companies dealing in perishable goods, they must make sure that the goods are transported fast enough and are stored in cool places to ensure they last longer.

Since there are many companies distributing their products at the same time, competition is always tough but this should not be a turn down. A firm can find out the strategies competitors are using to do their distributions and capitalize on areas where they are making mistakes, or they can also implement techniques that the competitors are not using to gain an upper hand.

When selecting a supply strategy, a company must make sure that it uses the least amount of revenue yet attain high levels of client satisfaction as well as ensuring distribution is efficient. Firms will have to employ and train people on their preferred strategy and they must also ensure that the benefits of doing that will outweigh the revenues spent.

There are some factors that will determine how effective a distribution plan is and these should be carefully looked at. As much as service and quality are major factors in selecting a plan, the cost of the process is still a big player in decision making. A successful system will operate within the boundaries of its values yet take up the least amount of funds to maintain profitability margins.

The way the government is involved will also be a major factor. The authorities involvement comes in terms of the laws set that affect taxes, labor as well as transportation restrictions. Firms have to be aware of such things and must be up to date with the current regulations to ensure that they make well informed decisions and avoid ending up on the wrong side of the law.

It is advised that the lawmakers in a firm rank their options for distribution in order of preference. It is also wise to start off with one system and as more information is gathered, other systems may be pursued. Sometimes other designs may be found that correspond with the one being used and if they are merged, it is likely that faster growth will be seen.

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