Your distribution strategy could be costing you more than you realize.
If it’s been over five years since your last review, it’s time to reevaluate.
Click on the video below to see the key factors that may be affecting your distribution efficiency.
Why Does It Matter?
If you haven’t reviewed your distribution network in the last five years, it’s definitely time to do so. Distribution networks are complex systems with many interconnected components, and even small adjustments can lead to significant improvements in efficiency and performance. Regular evaluations are crucial to ensure your network remains not only efficient but also capable of supporting your business’s ongoing growth and adapting to changes in the market.
Mergers and Acquisitions: A Key Drive
Mergers and acquisitions often necessitate a fresh and thorough look at your distribution network. When companies merge, it’s not just about combining assets and operations—distribution networks must be integrated and optimized to realize the synergies expected from the merger. This integration process involves a detailed assessment of the combined network’s efficiency, identifying areas where it can be streamlined or improved. If your company has recently been involved in a merger, or if one is on the horizon, now is an opportune moment to review and refine your network strategy.
Adapting to the Rise of Omnichannel and New Service Offerings
The rise of omnichannel distribution and the introduction of new service offerings, such as home deliveries, have significantly changed how companies operate their distribution networks. Traditional distribution models that once supported single-channel operations may no longer be adequate in today’s environment, where multiple channels coexist and compete. This shift often leads to inefficiencies, as existing networks struggle to meet the demands of fulfilling orders across various channels. Companies are increasingly discovering that their networks need to be modified, expanded, or even completely restructured to address these challenges effectively.
Rising Costs and the Need for Constant Efficiency
Changes in freight costs, warehouse demands, and other cost factors can have a profound impact on your distribution network’s overall efficiency. For example, fluctuations in ocean freight costs can dramatically alter where and how you import goods, ultimately affecting your entire supply chain. Regularly reviewing your network in response to these changes is essential for maintaining cost-effectiveness and staying competitive.
Related articles on this topic have appeared throughout our website, check them out:
- How to Operate Your Distribution Truck Fleet at Less Cost
- The 7 Principles of Warehouse and Distribution Centre Design
- 7 “Costequences” of Distribution Network Misalignment
- Do You Know the Signs of Poor Distribution Network Design?
- Spotlight On: Robots In Distribution Centres
Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated July 19, 2023, under the title “Why Should You Review Your Distribution Network?“.