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:
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:
- Markets
- Volume of goods
- Shipping
- 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.
