ABSTRACT
Businesses usually operate distribution networks to provide local service to customers. In many distribution networks the key elements of network design, replenishment, inventory management systems, and transportation systems are ad hoc. Poor and inconsistent definitions of the distribution network elements can be a root cause of poor on-time, in-full delivery, as well as being a cause of high inventory and costs. Designing distribution network is a balance of cost and customer service. The nature of a distribution network is that people tend to be located all around the country. As a result, the temptation is to just involve the central supply chain team and head office functional leaders in the sales and operations planning process. Disciplined product management processes are needed in distribution networks to prevent the uncontrolled proliferation of stock keeping units (SKUs) leading to high inventory, frequent shortages, and high levels of slow-moving and obsolete stock.
