Supply chain modelling using world leading software

A manufacturer of non food products serving retailers and caterers throughout Europe wanted to review where products should be manufactured and where they should locate distribution centres. They had two manufacturing sites with 25 production lines, one in Western and one in Eastern Europe. They also had three distribution centres and five cross dock sites.  Although the main markets were in Western Europe, the plant in Eastern Europe had significantly lower production costs.

To address these issues we set up a model using the Infor Network Design software. Production was modelled at the production line level with the possibility of moving lines, associated tasks and material flows between sites. Trade offs between production, site and transport costs were considered as a simultaneous problem by the optimiser.

The modelling showed that production cost advantages exceeded the additional transport costs and the costs of change, and determined which lines to move. A new supporting infrastructure of cross dock distribution centres was also determined. The solution gave a reduction in costs and inventory and the opportunity to extend the product range in a cost effective manner.