A warehouse facility can be essential to optimize your logistics. Namely, it is possible to receive, store, assembly, and distribute your goods from one central location. This provides increased economies of scale, reduction in transportation costs and increase in service, as goods are available at the right place, at the right time. So, how do you know what is the right place for a warehouse facility? Are you currently at the right place? Learn more about the center of gravity analysis and how Broekman Logistics can facilitate you in this blog.
What is a Centre of Gravity analysis?
In logistics, the Centre of Gravity analysis is a method of calculating the ideal location for a centralized distribution center. It makes it possible to optimize your supply chain. This method considers existing warehouse facilities and calculates the perfect location based on:
- Volume of goods
- Transport costs
- M2 availability
- Labor market situation and cost
- Industry knowledge
You can calculate the center of gravity based on demand, supply, or the lowest distribution costs, depending on if you determine the best location from a service point (e.g. lead times) of view or a cost point of view.
The number of shipments and volume are essential weighing factors when calculating the Centre of Gravity from a cost perspective. If you calculate the Centre of Gravity from a service point of view, delivery times, for example, play an important role. Also, reducing co2 emissions can be a weighing factor.
Your own Centre of Gravity
Has the geographic market of suppliers and sales market changed much recently? Or has your company grown through acquisitions (and do you, have multiple distribution centers)? Or are you not sure whether your current physical Supply Chain Network is appropriate for your Supply Chain objectives?
Broekman Logistics is able to perform a high-level center of gravity analysis and provide you with insight into a suitable and efficient distribution center location, based on your network and strategic inputs. We combine quantitative data and qualitative insights to decide on the best location for you. If on this basis you decide to consider another distribution center location within the Benelux area, Broekman can also be of service with our strategically located warehousing solutions.
Would you like to receive more information about this case? Or do you need support in calculating a Centre of Gravity analysis? At Broekman Logistics, we are happy to share our expertise! Contact us directly!