Their exists several factors that cause a company to analyze the design of a logistics/supply chain network. First is the response time which refers to the period between when the customer places the order and when he or she actually receives the goods. In this respect the company needs to consider the urgency in which the customer requires the goods. The supply chain designed should be able to match with the time required by the customer to receive the deliveries otherwise the customer needs would not be met which may affect customer retention. It should focus on quick and economical transportation of the products to where they are required by the customers. This is to imply that when coming up with the logistics system then the key target should be the analysis of customer needs and preferences. Many customers are interested on the reliability of the products, careful handling of products and timely delivery of the products (Liu, 2011). In addition, the other factor is the offering quality services at lower prices. This are two point in one the first one is quality services. There is great need to design a logistic network which will ensure that customers receive quality services which actually leads to improved customer satisfaction. Furthermore, this factor helps in bringing many customers in to the bracket thus helping the company to attain larger market share (Liu, 2011). The other factor is cost minimization; the supply chain network to be developed should focus on cost minimization and capital reduction. Therefore, cost effective supply chain network is essential for a company as it leads to increased efficiency. Finally is the logistics cost including inventory holding costs. Having studied the consumption rates of the customers, there is great need to design a supply chain network which will foster low logistic costs. Where the consumption rates are very high, then there is need to incorporate a warehouse need the customers. This will allow delivery of goods to customers whenever needed thus helping lower the holding, and ordering costs which in combination increase the efficiency of the company (Bloomberg etal, 2002).
References
Liu, J. J. (2011). Supply Chain Management and Transport Logistics. Hoboken: Taylor & Francis.
Bloomberg, D. J., LeMay, S. A., & Hanna, J. B. (2002). Logistics. Upper Saddle River, N.J.: Prentice Hall.
