What is warehouse network design?
Warehouse network design is the strategic decision about your warehouse footprint: how many locations, where geographically, with what function (central storage, regional fulfillment, value added), and which locations in-house versus outsourced via a 3PL. It is one of the most impactful logistics decisions you make, because the chosen footprint determines your cost structure and service bandwidth for five to ten years.
A good network design balances three forces that conflict: cost (fixed warehouse costs and transport costs run in opposite directions), service level (how many locations you need for next-day or same-day delivery) and risk (concentration versus spread, in-house versus outsource). The right answer differs per company, sector and growth phase.
When is a network redesign relevant?
A redesign is sensible at multiple strategic moments. With strong volume growth where the existing footprint falls short on capacity or reach. With geographic expansion to new markets where local fulfillment becomes necessary. With changes in customer mix shifting service levels (e.g. B2B to B2C, or standard to express). With expiring lease contracts that form a natural moment for review. And with an acquisition where two networks must be merged or optimized.
For shippers with growth there is also a proactive reason: it is much cheaper to redesign a network before a move than to correct wrongly chosen capacity a few years later.
Our approach
We map your current network (locations, capacity, costs, service performance) and discuss the strategic context: growth expectation, customer mix, international ambitions and risk tolerance.
We analyze two years of order and shipment data at postcode level, model your network and test scenarios with different numbers of locations, geographic positions and in-house versus outsourced configurations.
Per scenario we calculate total costs over five to ten years, service level impact and transition costs. Scenarios are stress tested against optimistic and pessimistic volume assumptions for a robust design.
We deliver a document with the recommended network configuration, the substantiation per decision, a risk analysis and a transition plan with indicative timeline and investment amounts.
We build the presentation for your management or board, ready for decision-making. After approval we can support the implementation as a project, including 3PL selection and transition management.
What you get
- Full network model with analyzed scenarios, open and repeatable
- Strategic recommendation with substantiation of choices and stress testing
- Five to ten year business case per scenario, with total cost of ownership
- Risk analysis and mitigation plan for the chosen configuration
- Concept transition plan with timeline, investments and milestones
- Board-ready presentation for management or investor decision-making
Frequently asked questions
When is a network redesign really necessary?
A network redesign is typically sensible with significant volume growth (from 30 percent over two years), with geographic expansion to new markets, with changes in customer mix (B2B to B2C for example), with expiring lease contracts of existing locations, or with an acquisition making the network too complex.
What data do you need to build the model?
Ideally two years of order and shipment data at postcode level, your current warehouse footprint with capacity and costs, your expected volume growth for the next three to five years, and your service level requirements per customer category. With less available data we can work with assumptions and refine them as we go.
Do you use specific software for modeling?
We work with combinations of Excel modeling for smaller networks and specialized supply chain network design software for more complex optimizations. The choice depends on the scale and complexity of your network. We always deliver the underlying models so you can repeat internally.
How does the design account for uncertainty?
A good network design tests multiple volume scenarios and stress tests the design against pessimistic and optimistic assumptions. The end goal is not an exact prediction but a network that is robust over a reasonable range of future situations.
What if the outcome is to leave everything as is?
That is a valid outcome. Sometimes the confirmation that the current network is optimal for your situation is itself the valuable conclusion, especially if it is factually substantiated. We do not force change to justify the assignment.
A network analysis for your situation?
Schedule a call where we walk through which questions your company needs to answer right now.