Increasing of item between them (Wattson et al. 2012,


Increasing customer
expectations, rising costs and more intense competitive pressures are driving
the development of the new supply chain strategies and complex network designs.
That increasing complexity is one of the main reasons why supply chain networks
need to be frequently re-evaluated. (Pickett
2013, pp. 30) .

It can likewise altogether enhance edges and lessen working
expenses. The number and areas of plants and distribution centers is a basic
factor in the accomplishment of any store network. A few specialists propose
that 80 % of the expenses of the store network are secured with the area of the
offices and the assurance of ideal streams of item between them (Wattson
et al. 2012, pp. 1).

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Research Objectives

target of this proposal is to look through outlines and demonstrating hones and
to make a system which could distinguish most ideal network arrange structure
for the case organization. The fundamental research question for this
examination is: How to streamline case organization’s dissemination arrange
regarding client needs and expenses? The fundamental inquiries can be isolated
into littler sub-inquiries with a specific end goal to discover the
arrangement. These sub-questions are:

·       What is the customers” service level that we are seeking to

·       What is/are the main kind(s) of distribution network(s) to
be implemented?

·       What is the best way to measure costs inside such


The Main purpose of this study is to solve a company’s
distribution network problem but at the same time target is to define clear and
simple framework for future distribution network studies.


D- Literature


These supply chain management definitions leads to few key
observations. First, supply chain management takes into consideration every
facility impact on cost and plays a role in making the product conform to
customer requirements. Second, the objective of supply chain management is to
be cost efficient and cost effective across the entire system. (Simchi-Levi et al. 2004)

Chopra and Meindl (2013, pp. 15) have also defined that the objective of every supply chain
should be to maximize the overall value generated. The value is the difference
between what the value of the final products is to the customer and the cost
the supply chain incurs in filling the customer’s request. This is also known
as supply chain surplus. Supply chain profitability is the difference between
the revenue generated from the customer and the overall cost across the supply


of each inventory network relies upon both client’s needs and the parts played
by the phases that are included (Chopra and Meindl 2013, pp. 15). Hugos (2011) clarified
that organizations in any store network must settle on choices independently
and all things considered with respect to their activities in five territories:

– What items does the market need? What’s more, what amount of which items ought
to be created and by when?

Stock –
What stock ought to be loaded at each phase in an inventory network?

Location –
Where should offices for generation and stock be located?

– How should stock be moved starting with one inventory network area then onto
the next?

Data – How
much information ought to be gathered and what amount of data should be shared?



Store network for practical items conversely should concentrate
on operational effectiveness and supply unsurprising interest productively at
most reduced conceivable cost. Effective store network ought to keep up high
normal creation use rate, produce high stock turns and abbreviate lead time as
yearns as it doesn’t build cost. Fisher’s abnormal state item – production
network structure is represented in the table below.


Functional Products

Innovative Products

Efficient Supply Chain



Responsive Supply Chain




Table 1: Supply chain
management matrix


(2002) extended
Fisher’s system by including supply vulnerabilities in his proposed structure.
Lee clarified that the supply procedure can be either steady or developing for
both useful and creative items. In stable supply process the assembling
procedure and innovation are develop and the supply base is settled.
Interestingly, a developing supply process is insecure


and Davis (2010) have
added Design-To-Order (DTO), Make-To- Order (MTO), Assembly-To-Order (ATO) and
Make-To-Stock (MTO) supply chain steering types for framework which should help
companies to select correct supply chain strategy for each product. Framework
basically suggests that low cost product with stable demand, short lead times
and high volumes should use efficient production and logistics processes and
Make-to-Stock steering model to achieve best results.





The principle objective in
a store network arrange configuration venture is to expand the association’s
benefits and in the meantime fulfill client needs as far as request and
responsiveness. All system plan choices influence each other and system outline
choices have real effect on company’s execution on the grounds that these
choices decides the production network design and set requirements for other
inventory network drivers that can be utilized either to diminish store network
cost or to build responsiveness. (Chopra and Meindl 2013, pp. 120 – 126)



Figure 1: Decision phases in global network design.




E- Methodology


Distribution network
design process/framework will be based on the literature research. Latest
articles and books will be used to understand distribution network designs,
supply chain cost and network optimization.

Customer service
requirements will be collected and identified by interviewing company’s
customer service representatives. Cost estimates for distribution network will
also be collected from several companies. General objective is to produce a
solution through options and evaluation of the options. Comparison and analysis
of different options should bring more support to the findings than evaluation
of a single option.

 Stochastic programming:
The goal of stochastic optimization is to find a solution that will perform
well under any possible realization of the random parameters. The objective
functions of many of stochastic models are minimization of the expected cost or
maximization of the expected profit of the system (Snyder, 2006).





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E., and Giacchetta, G. (2006). A fuzzy-QFD approach to supplier selection,
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Chopra, S. & Meindl, P.
2013. Supply Chain Management – Strategy, Planning and Operations. Fifth
edition. Harlow: Pearson Education Limited.

Lee, H.L. 2002. Aligning
supply chain strategies with product uncertainties. California Management
Review. Vol. 44, No. 3, pp. 105 – 119.

McKinnon, A. 2008. The
Potential of Economic Incentives to Reduce of CO2 Emissions from Goods
Transport. Internet document. Cited 28.9.2014. Available at http://

McKinnon, A. & Piecyk, M.
2011. Measuring and Managing CO2 Emissions of European Chemical Transport.
Internet document. Cited 21.9.2014. Available at http://

Razmi, J., Songhori, M. J.,
and Khakbaz, M. H. (2009). An integrated fuzzy group decision making/fuzzy
linear programming (FGDMLP) framework for supplier evaluation and order
allocation, International Journal of Advanced Manufacturing Technology, 43
(5-6), 590-607

Simchi-Levi, D., Kaminsky, P.
& Simchi-Levi, E. 2004. Managing the supply chain. McGrawn-Hill.

Pickett, D. 2013. A Blueprint
for Supply Chain. Supply Chain Management review. Vol. 17, No. 5, pp. 30 – 38.

Snyder, L. V. (2006). Facility
location under uncertainty: A review, IIE Transactions, 38 (7), 537- 554.

Stavrulaki, E. & Davis, M.
2010. Aligning products with supply chain process and strategy. The
International Journal of Logistics Management. Vol. 21, No. 1, pp. 127 – 15.

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Cacioppi, P. & Jayaraman, J. 2012. Supply Chain Network Design. New Jersey:
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