What Are the Six Critical Success Factors for Conducting a Strategic Network Optimization Planning Study?

May 17th, 2011 12:21 pm Category: Global Supply Chain, Network Design, Optimization, Optimization Software, Profit Network, Supply Chain Improvement, Sustainability, by: Richard Guy

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We recently attended a discovery meeting that was focused on how to conduct a strategic optimization planning study of an existing distribution network. The company wanted to know what changes needed to be made to lower the distribution costs. Several members of the management team were present and there were many questions regarding the ideal business process, study approach and modeling tools to be used to insure a successful project.

What was interesting to me was the overwhelming focus on the modeling tool. Questions about who would be on the project, the timeline, the types of scenarios, data gathering and validation were secondary. It may be important to have the right tool to model your infrastructure, but the real focus should be on the experience and modeling capabilities of the users of the tool.

These are the Critical Success Factors

  1. Full participation in data gathering and results review by the project team and management.
  2. Clear definition of the key questions to be addressed and the related scenarios required by the Project Sponsor early in the project timeline.
  3. Availability of leadership resources within the company throughout the project to review assumptions and to ensure integrity and quality of the input.
  4. On time delivery of a complete set of all required data by Project Team members.
  5. Acceptance and agreement on the variable, fixed and capital cost assumptions of existing and potential new facilities.
  6. Availability, communication, and collaboration of the Project Team members, support staff, and consultant for all working sessions, conference calls, and follow-up between meetings.

It’s important that the optimization modeling tool can incorporate the variables and constraints associated with your supply chain, but the real focus should not be on the tool, but rather on the experience of the users of the tool and their ability to deliver the results of a project. If I were to set out on a network optimization planning project to model my entire supply chain, then my primary focus would be on developing an experienced team of individuals that had the skills to minimize the above risks.

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