- Determining the optimum number and location of factories and distribution centers is a complex decision.
- It requires balancing such factors as response time to a customer’s order, the marketing value of maintaining a local manufacturing presence, local-content rules, duties, transportation time and costs, local labor and occupancy costs, and the replication of fixed assets.
- Centralized distribution networks – using one depot or warehouse to serve multiple regions – typically offer the advantage of low costs.
- Decentralized networks, however, often allow a business to offer customers
improved service. By rethinking the design of the
supply network when redesigning products and
processes for mass customization, a company can
optimize costs and provide fast, effective service.
- A company with many product options
benefits little from having many distribution
centers around the world if those centers perform
only the tasks of warehousing and distribution.
- The investments in inventory required to support all the options would be enormous.
Read more in the Mass Customization at Hewlett Packard
