SUPPLY CHAIN CASES
Adding an extra distribution centre after centre of gravity analysis
Network redesign and optimisation resulted in an estimated $289K savings in supply chain costs and service level improvements.
Needing a cost-efficient supply chain network
The customer was looking to design the most cost-efficient network to serve US demand.
Proposal
- DSV conducted a Centre of Gravity analysis to identify potential locations for distribution centres (DCs)
- DSV determined optimal network setup (1 DC vs 2 DC) based on both cost and service level impacts.
Benefits for the customer
- The setup with 2 DCs gave estimated cost savings of US$289K p.a. (7% of the baseline).
- This setup also provided service level improvements: 2-day customer coverage increased by 15% and 3-day customer coverage increased by 11%.
