Problem Statement
In logistics, choosing the right location for distribution centers (DCs) and hubs is crucial. With tight profit margins and high logistics costs in industries like dairy delivery, home appliances, and furniture, the right site selection can make or break sustainable profitability. Yet, our industry often falls back on an outdated approach: network design tools built around the commonly used “center of gravity” or “greenfield” algorithm. This widely accepted method may be leading us down the wrong path because these calculations are based on straight-line distances between the center of gravity and the supply or demand points.
Just because it’s an industry common practice, does that make it correct? In reality, the center-of-gravity (greenfield) method often misses the mark when it comes to finding the ideal location in the real world.
Solution Statement
Unlike straight-line distance, Sophus road distance based site selection considers the real routes that vehicles must travel – the true “center of gravity” for optimal distance actually lies along these winding routes.
By using road distance for site selection, companies can more accurately determine the ideal locations for DCs and hubs, reducing weight distance by sometimes 5%-10% , a very valuable saving in industries with razor-thin margins.
