Blog for updates and happenings in logistics in the Asia-Pacific region

February 21, 2008

Combined Distribution Networks

Filed under: Education,Study & Reference — admin @ 11:02 am

The concept of Combined Distribution Networks (CDN’s) is fairly easy to comprehend. A basic and simple definition would be:

“A CDN is the combination of the supply networks of different companies in the Supply Chain to achieve increased efficiencies and effectiveness.”

Collaboration of this nature is not unheard of and can be considered merely an extension of the theory of Supply Chain collaboration. There exists some real world examples in support of such implementation. The challenge in implementing an effective CDN would be between companies that would otherwise be competitors. The potential for recognizing increased efficiencies and effectiveness in overall performance in individual companies who implement CDN’s of this nature is staggering.

Current Supply Chain collaborative techniques allow growing businesses to reduce costs and improve customer service. In a Combined Distribution Network, detailed analysis of companies SKU-level product information is conducted over a period of time. This data will allow us to clearly understand the current transportation and warehousing structure as well as to establish an accurate cost baseline by which all optimization would be evaluated.

Purchasing, Inventory Management and Technology requirements could also be targets for a hybrid of the CDN theory.

Once the historical network baselines are developed, the analysis phase of the CDN can start by first scrutinizing the product flows, then using both the production information as well as customer consumption to determine the appropriate placement of warehouses and the transport network.

All models in the CDN will balance real world operational constraints put in place by companies involved in the CDN model with the need to service a majority of customers within a specified time frame, all whilst factoring in current market conditions for transportation rates into and out of each distribution market.

The further development and implementation of a CDN (ideally amongst competitors) will enable companies to optimize customer service whilst at the same time improve shareholder and stakeholder value.

After a complete and thorough analysis has been completed, a comprehensive RFQ can be built and 3PL’s with the capability to meet both or a part of the requirements invited to bid.

The final and perhaps most important reason why CDN’s should be further explored is the positive impact on the environment. Much has been done and needs to be done in the area of reducing the impact our Supply Chains have on the environment. The carbon footprint of individual products, from point of supply, to point of consumption are already being measured. CDN’s is one of the many ways these can be reduced.

From preliminary discussions with Supply Chain practitioners, there are a number of reasons why people feel CDN’s will not work. The main hurdle it would seem is the need to get stakeholders to overcome the common mindset that competitors should be treated as the enemy.

By Raymon Krishnan



February 14, 2008

The LSCMS appointed as WSQ ‘Program Manager’

Filed under: Education,Singapore — admin @ 4:00 pm

The Logistics and Supply Chain Management Society has achieved an industry’s first! It’s training partner, The Turning Point Business School, has been appointed as the ‘Program Manager’, the first Approved Training Organisation in Logistics Training with the Singapore Workforce Development Agency to conduct the ‘Workforce Skills Qualification’ or WSQ in Logistics.

By achieving the ‘Program Manager’ status, it allows the school to train individuals; both employed and unemployed, with minimal charges. On top of this, Training Allowance will also be disbursed to individuals or companies upon successful completion of their modules.

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