Supply chain modelling using world leading software
A major logistics company was appointed the Lead Logistics Provider for an automotive manufacturer in Europe. They managed the logistics flows from thousands of suppliers both inside and outside the EU to multiple plants using different transport modes. Historically, plants had managed their own supplies, with transport being carried out through separate third party networks. This meant that the manufacturer did not take advantage of consolidation opportunities at supplier or regional level. Introducing cross dock centres allowed this consolidation to take place, bringing cost and control benefits. We worked with the logistics company using the Infor Network Design system to determine the numbers and locations of cross dock centres and which suppliers should be cross docked and which should go direct to plant.
A key factor in the modelling was the ability to represent the transport costs correctly. An extensive exercise was undertaken to collect transport rates, which were modelled according to the collection size and mode. Costs also had to reflect the country of origin, due to the wide variation in transportation costs in Europe. The cost of operating the cross dock sites also reflected the variation in operating costs across Europe.
It was important that the model considered channel selection and made a decision
on whether to open or close a cross dock centre at the same time. These decisions
could not be made separately, as they impact on each other. As vendors could supply
a single plant or multiple plants, the model was constructed to allow combinations
of plants for cross-