candidate locations for comparison. After re-zoning and re-rating have been done, the data needs to be validated in order to compare the potential new DC locations. Validation that packages have been re-zoned and re-rated properly for the candidate locations is important to make certain that the answer the data is pointing to is accurate. There will likely be ties in transportation costs between current DCs and the selected candidate DCs. Where these ties occur, operational costs can be weighed to break them and allow for some flexibility in the network. Considerations for the Execution Phase After sufficient analysis and planning have been done, it is time for you to move on to the execution phase. No matter how good a plan is, if it is not executed properly, it is doomed to fail. Important things to consider at this stage include what carriers to utilize with the new DC,
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how to allocate the order process, and how to select the right service. The final step in the cycle is to monitor how well your plan is going. Things could start off going according to plan but spiral out of control given some time. This is where data analytics comes back into play. Monitoring whether or not the new DC is improving efficiency and reducing cost will help to ensure that the DC is still progressing towards the original goals. Some specific things to monitor are the cost impact of the additional DC and how well it is staying within the budget that was created in the planning phase. Also, the DC’s service levels and how effective the DC is at delivering the promised performance to its customers should be monitored. Rate shopping is a powerful tool to help you drive towards the optimal shipment route and rate for shipments, and it is a way to ensure that a DC is continuously improving. Another consideration should be how well the vendors supplying the
DC’s needs are complying with the shipping standards that were set up. Substantial planning regarding the best location for a DC can contribute to cost cutting and improving service levels. However, the plan has to be properly executed and the resulting network continuously monitored to achieve high performance and ensure that the original goals are met.
Will Bullington is a strategic solutions engineer at Green Mountain Technology (GMT), a parcel spend management service provider for shippers with over 10 million parcels per year. In this role, he partners with customers to provide GMT’s strategic Parcel Spend Management solutions, including network optimization, spend analytics, and contract management. Will has a Bachelor’s and Master’s degree in Industrial Engineering from Mississippi State University.