Mind Map for European Operations Footprint

The days when a company could (successfully) serve the European market from a central distribution centre are a thing of the past. The market has become too big for that, especially in view of the current growth and expansion in Eastern Europe. It is time to review the situation. Should companies set up satellite DCs? Establish new networks? Supply Chain Movement, Goodman and Riverland have produced a handy mindmap to illustrate the route, including road signs indicating potential hazards along the way.

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Mindmap manual

Business Strategy

The first 2 steps, Business Strategy and Footprint Design, are also the most difficult in the whole process. The aim is to develop a supply chain strategy based on sales strategies and company guidelines which also takes risk management into account – lots of stakeholders and just as many opinions!

Footprint Design

Once the strategy is defined, the footprint which lends shape to the network can be determined, requiring key decisions on the number and locations of facilities, modes of transport, and financing methods. Another important consideration is whether to handle certain activities in-house or to outsource them, and it is becoming increasingly common for all aspects to be considered at this stage, from (contract) manufacturing to physical premises and workforce.

Since this is an intensive process which demands a clear, long-term vision, these 2 steps are thankfully not something that all companies have to complete each year. However, it is important to re-evaluate the chosen network solution regularly to ensure it is still aligned with the current market situation.

Develop

In step 3, Develop, a company has to make a number of decisions which will commit it to certain financial obligations (Capex and Opex!), partners and/or property for several years. It is important to clearly document the company’s needs/expectations in a Programme of Requirements which will form the basis of the implementation phase. At this stage, laws and regulations may rear their head, sometimes unfavourably. Hence, effective and professional project management is crucial during this step.

Manage

In step 4, Manage, the company enters a phase of making continual improvements in terms of its processes, maintenance activities, energy savings and customer expectations, all within the existing framework of solutions. This step can last for several years, until the gap between the company’s presentday European footprint and its corporate strategy becomes too wide. Which brings us back round to step 1.