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Network Optimization
Service Level Agreements (SLAs) are established for a product and for an install site. Therefore, in order to analyze network coverage for an SLA, it is necessary to have visibility for a product beyond the single installation. Network Optimization is designed as a stand-alone process with no significant impact on the Servigistics core solution architecture. It is a strategic process, not a tactical one, and is intended to be run on an infrequent basis (monthly or quarterly). Network Optimization incorporates product-level granularity to determine the least expensive network of Field Service Locations (FSLs) needed to satisfy the SLA for a product by doing the following:
• Make recommendations for the stocking locations of the customer install base that may reduce operating costs. It is the process of optimally determining which locations should be opened and closed. It also determines which stocking locations should support certain contracts.
• Attempts to minimize the total number of open locations, based on contract commitments (install base records). Then, the process assigns contract coverage (stocking coverages) to the install base records based on the closest stocking location that is recommended open. Note that
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Network Optimization only considers locations that are currently in the network. It will not recommend opening sites based on lat/long centroids, but it will select from a pre-populated candidate list. It is recommended that data from all potential third-party logistics companies is obtained to increase the network options available.
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Transportation costs are ignored by Network Optimization. The baseline assumption for the process is that the cost of shipping from any location within range is roughly equivalent. Given that the cost of shipping is typically significantly lower than the cost of stocking a part, this assumption is generally acceptable.
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