Optimizing Factory & Production Location
Determining the ideal factory location and production allocation is crucial for cost efficiency, resilience, and sustainability. Companies must evaluate logistics, transport costs, and risk factors to optimize their supply chain footprint and ensure adaptability to demand fluctuations.
Challenges
Deciding where to establish a factory or allocate production capacity is critical for cost efficiency, supply chain resilience, and sustainability. Key considerations include logistics, transport costs, demand variability, and risk management. Companies must determine:
- Where to produce different product variants across global sites.
- Whether to centralize or decentralize production.
- How locations perform under demand fluctuations and disruptions.
How Simulation Helps
Discrete Event Simulation (DES) enables fact-based site selection by simulating supply chain flows, evaluating logistics efficiency, and testing different demand and disruption scenarios to minimize risk and maximize operational performance. Key areas include:
- Simulate supply chain flows to assess costs, lead times, and supplier integration.
- Test demand scenarios to optimize production allocation across multiple sites.
- Analyze logistics efficiency, considering regulations, customs, and transportation impact.
- Optimize site selection using multi-objective optimization for cost, resilience, and sustainability.
Expected Results
- Optimized factory locations, ensuring efficient production and distribution.
- Reduced logistics costs by selecting ideal production and storage sites.
- Increased resilience, minimizing risks from supply chain disruptions.
- Sustainable site selection, optimizing energy use and reducing emissions.
