Use Case: Location Planning

Reduce Costs and Improve Service by Optimizing Location Choices

A company has one production plant and three warehouses at various locations. Each customer supplied is assigned to one warehouse. Assigning customers to warehouses in the best way to uphold or improve service levels presents a considerable challenge.

The challenges

  • High transport and warehouse costs
  • Maintaining a high level of service
  • Account for capacity restrictions at each location
  • Developing the number of customers
Here’s how we do it

The solution

  • Calculate the best places for and numbers of locations based on real shipping volumes.
  • Take capacity restrictions at locations into account.
  • Use integrated geocoding distance tables or Map&Guide to calculate transport costs.
  • Take border-crossing costs and declining cost functions into account.
  • Constraints on service levels can be customized to meet your needs (e.g., 95% of your customers must be within a two-hour radius of a location).
  • Simulate various scenarios using dummy locations.

Customer Benefits

  • Minimized transport and warehousing costs achieved by an optimized customer-to-warehouse assignment.
  • Improved service level achieved by optimizing time and distances.
  • Simulating locations increases planning reliability.
  • Visualization options increase transparency in presentation.