Redesigning a Regional Distribution Network

The challenge

A distributor serving ports and inland customers had added warehouses one at a time as the business grew. The resulting network had overlapping catchment areas, long and indirect transport lanes, and stock split across too many locations to serve any of them well.

The approach

The logistics team modelled the network from current customer locations, order profiles and service requirements rather than from the existing sites. Several alternative designs were compared on total landed cost, service coverage and resilience to disruption at any single location.

The preferred design consolidated activity into fewer, better-placed nodes with shorter lanes to key customers. Migration was phased by customer group, with dual running during each transition and close communication with customers about any changes to delivery arrangements.

What changed

Inventory became easier to position and replenish, transport routes became more direct, and on-time delivery improved noticeably as the new network settled in. Planning also became simpler, because fewer locations meant fewer handoffs and fewer places for stock to get stuck.

Lessons for practitioners

Design the network the business needs now, then work out how to get there from the one it has. A phased migration with dual running costs more in the short term, but it protects customers from paying for the redesign in missed deliveries.