Which factors are important in network configuration?

Location of plants and the number of warehouses are crucial factors in network configuration because they directly affect the efficiency and effectiveness of the supply chain. Proper placement of production facilities and distribution centers can significantly influence transportation costs, delivery speed, and overall service levels.

The location of plants determines where manufacturing takes place and the logistical costs associated with sourcing raw materials and distributing products to customers. If a plant is situated too far from suppliers or customers, it can lead to increased transportation costs and longer lead times, which can negatively impact the company’s competitiveness.

Similarly, the number of warehouses affects inventory management and the ability to meet customer demand quickly. Adequate warehousing close to key markets allows for faster order fulfillment and can reduce shipping costs. Balancing the number of warehouses is essential to minimize inventory holding costs while ensuring product availability for customers.

These elements are foundational in optimizing a supply chain's performance, making them critical considerations in the overall network configuration strategy. Other factors listed, while important in their own right, do not directly impact the physical layout and logistics of the supply chain network to the same extent.