Research In Optimizing E Company’s Finished Goods Logistics Network, Based On Supply Chain Management

Saving logistics cost through the supply chain management becomes one ofthe key to be profitable, while it is recently getting more and more difficult formanufacturing company to save cost from the production. An efficient logisticsnetwork makes the supply chain system stable and be in balance, as well makessure the delivery lead time and a good result of the total cost for the supply chain.Efficiency should be the output by designing and implementing a proper logisticsnetwork.There are differences between a logistics network for the supply chainmanagement and that for the conventional management. It is required by thesupply chain management that a logistics network would work for the overallgoal of the supply chain with an appropriate allocation of right facilities.A new enterprise needs to establish its own logistics network from the verybeginning, and an old one needs to optimize and update its existing logisticsnetwork to fit in with the needs of development and the changes in the market. Itis a must to have a logistics network, which could perform best services to thecustomers at a lower cost.The theories of Supply Chain Management, Logistics Network for thesupply chain are the foundation of this paper. Basing on these theories, the study and research on this paper is done for E company. This paper firstly shows thestatus of E company’s finished goods logistics network in details, with study inthe root causes of the issues in E company’s finished goods logistics network. Itshows the necessity of optimization in the logistics network for E company’sfinished goods. It analyzes by mathematical models and scenarios, findingsolutions through the method of costing and cost analysis. Different result of totalcost come out from different scenarios, and the result of total costs well help thedecision making for the optimization purpose. Besides analysis of total cost ofthe network, the transportation route and the lead-time of the new network aswell as the other factors from the external and internal are considered and brieflyreviewed on the paper, so as to make sure the feasibility of the selected solution.Key points of implementation are also made here.According to the analysis, the total logistics cost is estimated to reduceconsiderably when the selected solution takes place. The optimized logisticsnetwork would also reduce the number of transportation routes and keep the samelead time, satisfying the customers better than the current one does.