The world is getting smaller and so are the total logistics.
Therefore, in order to ensure the lowest total costs and the fastest way from the supplier/production to the end customer, it often makes sense to re-evaluate your current logistics setup.
This is best done through a centre of gravity analysis, which gives a total assessment of the placement of warehouses/distribution centres in relation to the inbound and outbound flow of goods.
The assessment will primarily include impact analysis and assessment of the total transport costs, while inventory and staffing costs are usually calculated by the customer themselves.
The total calculation thus assesses
- Transport costs – in/out
- Storage costs (optional – usually known/defined by the customer)
- Total lead time in the logistics process
- Advantages/disadvantages based on market position