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INDUS UNIVERSITY

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 Course Name

• Teacher • Sir. Bilal

• Semester • Fall 2023
• Credit Hours • 03

Faculty of Management Sciences, Indus University 3

 Assessment

• Assignment • 05
• Quiz • 05
• Report • 15

Faculty of Management Sciences, Indus University 4

NE TWOR K DE S IGN IN
LOCAL AND GLOBAL
THE S UP P LY CHAIN

Supply chain network design plays a vital role in creating an efficient and
cost-effective supply chain that meets customer demand. In this
presentation, we will explore the factors influencing network design
decisions and the frameworks that can be used to make those decisions.

By Bilal
Factors Influencing Network Design Decisions

1 Costs

The cost of production, transportation, and inventory are all

Customer Demand important factors that need to be considered when deciding on

2
a network design.
Understanding and meeting customer demand is the ultimate
goal of any supply chain. Network design needs to ensure that
customer demand is met in the most efficient way possible. 3 Risk Management

Managing risks in the supply chain can be challenging.

Network design can help mitigate risks through strategic
Technology advancements 4 inventory placement and transportation modes.

The advent of new technologies such as automation,

blockchain, and artificial intelligence is changing the way
supply chains operate. Network design needs to incorporate
these technologies to remain competitive.
Models for Facility Location and Capacity
Allocation

P-Median Model P-Center Model

A mathematical model for facility location that minimizes A mathematical model for facility location that minimizes
the total distance traveled by all customers to reach the the maximum distance traveled by all customers to
facilities. reach the facilities.

P-Median-Center Model Capacity Allocation Models

A hybrid model that minimizes both the total and These models help decide how much capacity to
maximum distances traveled by all customers to reach allocate to different facilities. They consider factors such
the facilities. as demand, cost, and location.
The Offshoring Decision: Total Cost 1456.3

Offshore Oil Drilling Factory Assembly Transportation Costs

An example of offshoring where
companies choose to move their
operations to other countries with
lower labor costs. For example, call
centers in India.
Companies can outsource production International transportation costs can
to other countries with lower labor be high and need to be factored into
costs. This can result in cheaper the total cost of offshoring.
products being produced, but can also
increase the total cost of the supply
chain.
E valuating Network Design Decisions Using
Decision Trees
Decision Making Probability Distribution Payoffs
Proces s
Decision trees use probability Payoffs in decision trees are used to
Decision trees can help evaluate distributions to assign likelihoods to assign values to each possible
network design decisions by different outcomes. outcome.
mapping out different possible
outcomes.
To Onshore or Offshore: Evaluation of
Global Supply Chain Design Decisions
Under Uncertainty
1 Risk Management 2 Cultural Differences

When making offs horing decis ions ,
companies need to cons ider the ris ks
involved, s uch as political ins tability or
natural dis as ters, and prepare
contingency plans.
Language barriers, work ethics , and
cultural norms can pres ent challenges
when outs ourcing to other countries .
Companies need to cons ider thes e
factors when making global supply
chain des ign decis ions .

3 Regulatory Compliance

Companies need to ensure that their offshoring decisions comply with local regulations and
laws to avoid penalties and reputational damage.
Making Global Supply Chain Design Decisions
Under Uncertainty in P ractice

1 R isk Identification

Identify potential risks that could affect network

R isk Assessment 2
design decisions, such as natural disasters or
political instability.
Quantify the likelihood of each identified risk
occurring and assess the impact it would have on
the supply chain. 3 R isk Mitigation

Develop contingency plans to mitigate the impact

of risks on the supply chain.
Key Considerations for Global Supply Chain
Network Design

Trade-offs between cost and lead time Infrastructure and transportation options

Supply chain managers need to find the optimal balance The availability and quality of infrastructure and
between cost and lead time to keep customers happy transportation networks can have a significant impact on
without sacrificing profitability. the design of a global supply chain.

Risk management strategies Cultural and Regulatory Challenges

Supply chain managers need to develop robust risk Companies need to take into account cultural differences
management strategies to mitigate potential disruptions and regulatory compliance issues when designing a
and ensure continuity of operations. global supply chain.
Conclusion
Supply Chain Efficiencies
Through effective network design,
companies can minimize costs,
improve efficiencies, and increase
customer satisfaction.
Global Reach
Globalization has presented new
opportunities and challenges for
global supply chain networks, and
network design decisions have
become increasingly critical for
success in today's global marketplace.
The Future of Network Design
New technologies such as automation
and artificial intelligence are set to
reshape the supply chain network
design landscape, offering new
efficiencies and opportunities for
growth.
Thank You

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