Distributed Network Model Lets You Adapt to Unexpected Supply Chain Interruptions
- by Biju Thantry Parasuraman, Consultant, Infosys Technologies, Ltd.
- June 15, 2007
Learn about the distributed network model for warehouse storage and determine the best ways you can apply it to your business.
In a distributed network model you have several warehouses in different areas. It allows you to ship materials to customers more efficiently because you ship from a warehouse near them. The distributed network model also allows you to work around unforeseen warehouse closures, as could happen in bad weather.
The growing trend for high-tech companies is to use multiple warehouses around the globe to meet customer demand
for the shortest possible order to delivery time — a distributed network model. The advantages of this setup are
shorter lead time to delivery and higher customer satisfaction. This is useful to satisfy demands of a one-time customer.
You can use it with R/3 or SAP ERP Central Component (ECC).
For example, using this multi-sourcing strategy, a computer manufacturing company could stock its materials in
different warehouses spread across a region and serve a customer from the nearest located warehouse. If an unforeseen
weather catastrophe shuts down a warehouse due to floods, for example, the distributed network model ensures that the
company meets cus-tomer orders and avoids sales operation shutdowns.
This business model applies to any industry that uses warehouses to fulfill customer orders. I’ll discuss the
typical scenarios in which you should consider using the distributed network model. This is not available with your ECC or
R/3 system as standard, so I’ll also show you how you can map this model in your ECC or R/3 system using the
delivery plant functionality in the material master and the user exit in SAPMV45A (sales order processing
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