SUPPLY CHAIN ​​NETWORK DESIGN

SUPPLY CHAIN ​​NETWORK DESIGN

Supply chain network design decisions include the assignment of the role of facility, location of processing (manufacturing), storage, and transportation-related facilities, and allocation of capacity and the market at each facility. Supply chain network design decisions are grouped into:

The role of facilities
Location facilities
Allocation of capacity
Market allocation and bid

Network design decisions have a significant impact on performance because this decision determines the composition of the supply chain and the accompanying set of constraints in the supply chain of other triggers can also be used to reduce supply chain costs or to improve its response. All of these network design decisions impact on each other and should be a consideration.

Decisions regarding the role of the facility is important because it determines the decision of supply chain flexibility in the amendment to bring together a bid.
Facility location decisions have long-term impact on supply chain performance because it is very expensive in stopping the facility or move to a different location. Decision of the right location can help to better respond to supply chain for low cost.
Capacity allocation decisions also have a significant impact on supply chain performance. Given the capacity allocation can be changed more easily than the location, capacity decisions tend to remain in a few years. Allocating too many facilities do not produce many uses, this high-cost memyebabkan.
The allocation of resources and market demand on the facility also has a significant impact on supply chain performance because it affects the total production, inventory, and transportation costs that occurred in the supply chain to satisfy customer demand. This decision should be considered so that allocations can be changed as market conditions or changes in plant capacity.

Factors affecting the network design decisions
Here's a variety of factors that influence decisions in the supply chain network design.

1. Strategic Factors
A company's competitive strategy has a significant impact on decisions in the supply chain network design. Companies that focus on cost leadership will try to find or create the lowest cost for facilities manufakturingnya. Companies that focus on response rate tends to place a facility that closed in the market and may choose a location to high cost if they meet the company's choice to react quickly to changing market needs. Global supply chain network to support corporate strategic objectives with the role of different facilities in different places.

2. Technological factors
Characteristics contained in production technology have a significant impact on network design decisions. If the production technology displays economies of scale are significant, few high-capacity sites will be more effective. Unlike the case with fixed-cost facilities is lower, many local facilities are prepared because this will help lower transportation costs. Flexibility in production technology have an impact pad level of consolidation that can be achieved by the network.

3. Macroeconomic factors
These factors include taxes, customs duties, exchange rates, and other economic factors that do not exist within the company. This factor has a significant impact on the success or failure of the supply chain network.

4. Political Factors
Political stability in a country is of paramount consideration because it has a significant impact on role in the choice of location. Companies prefer to place the facility at a location or state which has a stability that provide clarity in terms of trade rules and ownership.

5. Infrastructure factors
The existence of good infrastructure is an important prerequisite in allocating facilities in certain areas. Poor infrastructure will further add to business costs.

6. Competitive Factors
Companies must consider the strategy, size, and location of competitors when designing their supply chain network. Making important decisions the company is now set for the company's facilities are not accessible by competitors or in other words away from competitors.

7. Customer response time and local presence
Companies that have targeted customers who can respond in a quick time to put the facilities that are closed to the customer. If the company sends its products to customers, it means that transportation should be slightly built and continue to increase response time is short. This choice resulted in an increase or increase in transportation costs. Furthermore, many situations that require these facilities to customers.

8. The cost of logistics and facilities
Logistics and facilities costs that occur in the supply chain can undergo changes such as the number of facilities, location and capacity allocation. Companies should consider, supplies, transportation and facility costs as the company's supply chain network design. The increasing cost of supplies and facilities, the greater the number of facilities used in the supply chain. The lower the transportation cost, the greater the number of facilities. If the number of facilities increased at a point where the journey economis of scale is lost, then the transportation cost increases. The total number of logistics is the entire inventory, transportation and facility costs.

The framework in network design decisions
The success in designing a supply chain network will maximize profits when the demand satisfied customer needs and have the power response. Network design decisions are made in four stages:

Establish design or supply chain strategy. The purpose of this phase is to establish a large supply chain design. This includes also determine the stages in the supply chain, and each supply chain function to be used.
Appointing the regional facility. The purpose of this phase is to identify areas where it is placed, the rules that apply, and capacity.
Selecting the desired set of potential sites. The purpose of step three is selecting the desired set of potential sites in each region where the facilities would be placed. The place should be chosen based on the analysis provided in the infrastructure to support production of the desired methodology.
The choice of location. The purpose of this phase is to choose the right location and the location of capacity for each facility. Attention is limited to the desired potential places that have been selected in three stages.

Model facility location and capacity allocation
The success of managers in establishing facilities and allocating capacity should be optimized in sseluruh profitability of the supply chain network while increasing the power to respond to the right on the customer. Managers must consider many trade-offs during the design network. Managers use the model of network design in two different circumstances, namely:

Model used to decide the location where the facility will be established and the existing capacity at each facility. Managers must make decisions based on the time will come where the location and capacity can not be changed.
The model used to determine the direct demand for the availability of facilities and identify the path along the product will be passed. Managers must consider its decision on the basis of such request prices, changes in exchange rates and changes in customs.