2 Essential Factors Required for Determining Supply Chain Network Optimization

A company undergoes several changes over the course of time. While most companies pay particular attention to the different aspects of these changes that include budget and employees, the effect of these transformations on the supply chain network design can be overlooked. Here are the top three essential factors that play a vital role in determining the necessity of supply chain network optimization for a commercial venture.

Business Expansion and Customer Needs:

Supply chain planning is at the core of the primary operations of any business, especially for companies with an eCommerce page and online stores. During business expansions, if you are still sticking to the original supply chain network design, it can cause more problems than one. After venturing into a new field, your customer expectations and needs also change.

This is when you know it is time you took the task of network optimization seriously to not only maximize your company’s productivity and performance but also to cater to the changing customer needs. Business expansions lead to unexplored markets and without proper supply chain planning and design, that can affect the current supply chain network from different angles.

Business Acquisitions, Mergers, And Collaborations:

Most companies already have a supply chain structure in place. With acquisitions and mergers, the supply chain network design needs to be altered to meet the growing demands of the customers. An acquisition or a merger is the path to a bigger market and to a larger set of customers which naturally means that it's time you altered your current retail supply chain and logistical affairs to suit the changes the company undergoes.

In fact, without a redesigned supply chain you could be spending more than the returns on investments (ROIs) which could ultimately hinder the growth and the success of the company— which is the primary objective behind, mergers, collaborations, and acquisitions.