Spatial decisions on distribution channel layout involve the layout of the transport and storage system between production and consumption as well as the selection of distribution centre locations. Both are strategic company decisions to meet logistics challenges, i.e. delivering the right product at the right location on time. In this paper we study the main factors and sub factors that drive spatial decisions on distribution channel layout. The current literature has a strong focus on normative approach and lacks descriptive research into these factors. In the second part of the study, we investigated the importance of the factors. Best-Worst Method (BWM) has been used to calculate the factor weights. BWM provides consistent results and requires fewer comparisons than ‘matrix based’ methods. An online survey was used to collect the data. According to total sample of respondents, the most important factors are ‘Logistics costs’, ‘Service level’ and ‘Demand level’. Logistics costs being the most important factor is in line with Supply Chain Management literature. Logistics experts consider ‘Customer demand’ as the second most important factor, whereas decision makers consider ‘Service level’ the second most important factor. A limitation of the research is that the majority of respondents are from Europe and the USA. For future research we suggest to test how respondents from non-Western countries value the importance of several factors.
Presentation for logistics professionals (industry and government) on the factors that drive firms' decisions on distribution channel layout and distribution centre locations.
Research statementOur study analyses the factors that drive decision-making on distribution structures, including the layout of distribution channels and the locations of distribution centres. Distribution is a primary firm activity, which strongly influences logistics costs and logistics performance. Distribution is a challenging activity as customer demand is often volatile and unpredictable. Consumers continuously expect higher service related to distribution, e.g., same day delivery and more flexibility in delivery locations. Therefore, it is of strategic importance to shippers and Logistics Service Providers (LSPs) to decide which distribution channel layout to use and, accordingly, plan distribution centre location(s). Distribution structure selection concerns the number and locations of distribution centres, as part of the larger corporate planning process. The main questions we strive to answer in this paper are: (1) what are the main criteria that determine the spatial layout of distribution structures? and (2) how important are these criteria, relative to each other?Methodology The literature on distribution channel design mostly revolves around optimization methods; we are not aware of literature that takes a descriptive approach. We therefore develop a descriptive conceptual model that includes these factors, developed from the contextual literature around this decision. The second part of the study concerns the measurement of the relative importance of these factors. We implemented an elaborate survey and used the Best-Worst Method (BWM) to identify these weights. The survey considers different experts (e.g., logistics managers versus logistics professors) and population segments (e.g., in-house versus outsourced distribution).Data and resultsCurrently we are completing the survey dedicated to evaluating the above factors. We have received sufficient response to estimate a first model. These first estimations already provide useful results. Final estimations will be completed and reported in June 2017. At the I-NUF conference we will be able to present the results and analysis of all factors when comparing respondents and parameters.Preliminary conclusionsBased on literature review, eight main factors – divided into 33 sub factors – are included in our research: 1) Demand factors, 2) Service level factors, 3) Product Characteristics factors, 4) Logistics costs factors, 5) Proximity-related location factors, 6) Accessibility-related location factors, 7) Resources-related location factors and 8) Institutional factors. A number of hypotheses were built from the literature analysis relating, for example, to the relative importance of service- and cost- related factors within different industries. We will revisit these hypotheses and provide the quantitative results of the importance of the individual factors in our paper and at the conference.
Climate change has impacted our planet ecosystem(s) in many ways. Among other alterations, the predominance of long(er) drought periods became a point of concern for many countries. A good example is The Netherlands, a country known by its channels and abundant surface water, which has listed “drought effect mitigation” among the different topics in the last version of its “Innovation Agenda” (Kennis en Innovatie Agenda, KIA). There are many challenges to tackle in such scenario, one of them is solutions for small/decentralized communities that suffer from dry-up of surface reservoirs and have no groundwater source available. Such sites are normally far from big cities and coastal zones, which impair the supply via distribution networks. In such cases, Atmospheric Water Generation (AWG) technologies are a plausible solution. These systems have relatively small production rates (few m3 per day), but they can still provide enough volume for cities with up to 100k inhabitants. Despite having real scale systems already installed in different locations worldwide, most systems are between TRL 5 and 6. Thus need further development. SunCET proposes an in-situ evaluation of an AWG system (WaterWin) developed by two different Dutch companies (Solaq and Sustainable Eyes) in the Brazilian semi-arid state of Ceará. The cooperation with NHL Stenden will provide the necessary expertise, analytical and technical support to conduct the tests. The state government of Ceará built an infrastructure to support the realization of in-situ tests, as they want to further accelerate technology implementation in the state. Such structure will make it possible to share costs and decrease total investments for the SMEs. Finally, it is also intended to help establishing partnerships between Dutch SMEs and Brazilian end users, i.e. municipalities of the Ceará state and small agriculture companies in the region.
