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What Is Supply Chain Network Design?

A fundamental part of supply chain logistics management is developing an effective supply chain network. Supply chain network designs vary greatly, depending on the type of company and its goals, market strategy, volume, and products or services. Each aspect of the supply chain — whether materials sourcing, manufacturing, transportation, distribution, sales or customer service — should meet the unique needs of that company, with network design and strategy based on current industry and market forecasts.

The University of West Florida’s online Master of Business Administration with an emphasis in Supply Chain Logistics Management addresses this important topic. With coursework and case studies on analytical techniques and the study of logistics systems, the program trains students to make informed management decisions and design appropriate, effective supply chain networks.

Traditional Supply Chain Network Designs

Before the advent of digital communications and economic globalization, supply chain networks could exist in a somewhat simpler fashion. Companies would consider markets and growth potential, manufacturing, transport logistics, and distribution systems, and then devise a supply chain network design that would minimize costs and maximize profits. Combined with research into other successful supply chain network strategies, companies either established or outsourced adequate manufacturing facilities, distribution centers and customer service targets.

What Are the Pitfalls of Traditional Supply Chain Network Design?

When technology and product development was slower, companies could, with extensive upfront research, more or less “set and forget” their supply chain network design, assuming that forecasted market development proved accurate. The cost and expediency of communication limited markets. Similarly, the pace of technological improvement limited product development. Products could have a reasonably long shelf-life before being outmoded, allowing for static supply chain network designs.

However, technology has grown exponentially, allowing for immediate, inexpensive worldwide communication, rapid product development and placement, and an increasingly globalized economy. Many think the traditional model of supply chain network design is outmoded. While the global marketplace offers immense profit and growth potential, international logistics makes supply chain management far more complex. Businesses and markets start, change, grow and even fail so quickly that modern supply chain logistics demands a flexible and responsive model.

Modern Developments in Supply Chain Network Design

As supply chain logistics professionals have searched for ways to update supply chain network design, so have administrators tried to modernize every aspect of contemporary business. In fact, the emerging models of business and supply chain management have much in common.

Much like the “lean start-up” model, modern logistics managers are taking a more responsive approach to supply chain network design. This approach requires a lot of research into the different aspects of the supply chain and which aspects can be handled in-house or should be outsourced. Network design must also consider where demand is highest. However, the wealth of big data now available from digital information analytics can and should assist administrators with those decisions. Companies can now implement an appropriate supply chain network design quickly, test and review it and make periodic adjustments. This feedback loop enables the sort of rapid change and innovation that is essential for modern businesses.

Degree candidates in an online MBA in Supply Chain Logistics Management program can gain valuable knowledge and experience in modern supply chain network design. These aspiring professionals will have the opportunity to study innovative logistics and data and information systems to create supply chain networks that are flexible enough to keep up with today’s globalized demands.

Learn more about the UWF online MBA in Supply Chain Logistics Management program.


Sources:

Spinnaker Management: Introduction of Strategic Supply Chain Network Design

Supply Chain Digest: Supply Chain Network Design: Where the Real Money Is


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