What are Supply chain Management Networks in Agribusiness? The supply chain network design determines its physical configuration, design, technical layout, and supply chain technology. The number, location, and scale of manufacturing plants and warehouses, as well as the assignment of retail outlets to warehouses, are all big decisions to be made here. This stage also observes several other significant decisions regarding sourcing. The basic period of time for horizon preparation is a few years. Many big decisions affecting long-term position, power, technology, and supply selection must be taken when taking into account the potential for business growth to be fraught with uncertainty, as well as evolving economic and legal conditions.
Supply chain network design focuses primarily on the development of multi-stage stochastic optimization methods needed for demand-based decision support, freight rate, and exchange rate volatility. It will address different techniques for analyzing complexity and scenario simulation in this section.
As a business moves its subsidiaries to new locations, it often needs new storage facilities. The organization is having difficulty locating a storage spot. The one that has the lowest fixed costs and operating costs by meeting the requisite demand is selected within the collection of likely choices in locations.
Traffic network design:
Cities are getting more congested as the population increases. Due to the higher demand for transport, it is therefore important to expand the traffic networks. Since the budget available is generally small, the biggest difficulty is determining which schemes can be designed to enhance traffic flow within a network.
Due to increasing prices and other factors, this practice has recently arisen. It is the exercise of getting back to the originating point from where they were initially delivered outsourced goods and services. It discusses how to restore any or all of the production to its original site.
Versions of a Network
Different types of models are provided in supply chain networks to help us understand the various optimization approaches used for analyzing complexity and scenario modeling. As given below, there are six different supply chain network models.
- Housing by the manufacturer with direct delivery
- Distributor storage with package carrier distribution and in-transit merge (cross-docking) Producer storage with direct shipment and in-transit merge (cross-docking)
- Last-mile distribution for dealer stock
- Retail storage with customer pickup Manufacturer or dealer storage with customer pickup
Basically, the supply chain network works with three primary entities: producer, dealer, and merchant. There are two different choices available, i.e., consumer pickup or delivery of doors. If the door distribution method is preferred, there is transportation between the manufacturer and the seller, the distributor and the merchant, and the producer and the merchant. On the basis of the preference of the consumers, the delivery system decision is made. This in essence factors in the production and expense of the sales arrangement for the commodity or goods.
The use of a single form of the delivery network will bring new industries to a halt. Usually, businesses mix multiple styles with different goods, consumers, and consumption scenarios, returning to the various optimization models described earlier. We are going to discuss each model in brief now.
Storage manufacturer of direct delivery
In this model, items are transported straight from the location of the producer as the starting point to the location of the end-user as the supplier bypasses the destination point. The merchant is the one who approves the order and orders delivery. This choice is also called drop-shipping, with the goods shipped directly to the customer’s destination from the location of the producer.
Producer logistics combined with direct shipping and merge-in-transit
That is somewhat similar to straight drop-shipping or transferring, but the distinction is that portions of the order arrive from different sources and are combined into one such that a single supply is obtained by the customer.
Package courier distribution with distributor storage
This takes place as the product is not owned by the suppliers in the factories; instead, it is owned in intermediate warehouses by the merchants/retailers and mail carriers are used to transport goods from the intermediate position to the final customer.
Storage by the distributor for last-mile distribution
This method results as the merchant/retailer send the customer’s purchased items to the home of the customer rather than through a parcel carrier.
Storage producer/distributor of consumer pickup
The product is held in this manner at the warehouse owned by the retailer or producer, but consumers put their orders electronically or by telephone and only pick up points assigned to receive their orders.
Customer pick-up and store stock
This is mostly applicable to cases where merchandise is held locally in retail stores; consumers visit the retail store or buy things online or on the internet and pick it up at the retail store.