Building a Robust Logistics Network – From Strategy to Implementation

Hello, Last Mile Technology Experts,

In this Last Mile Technology newsletter by Last Mile Experts , we will focus on constructing and implementing a new logistics network. This intricate task requires a strategic vision, detailed planning, and precise execution. Here is an expert-guided roadmap to ensure success:

1. Initiate with a Comprehensive Sales Strategy – Begin by meticulously planning volume flows within a 7-10 year investment perspective. Recognize distinct requirements for locker-based networks, mixed models, or networks handling oversized items/pallets. Specifically, networks utilizing parcel lockers must anticipate how rapidly expanding APM networks influence volume shifts and operational patterns.
2. Craft Your Logistics Strategy – Decentralized vs. Centralized – Consider carefully whether sorting should predominantly occur at the outset, followed by cross-docking (decentralized), or primarily at centralized hubs. A decentralized structure provides agility and regional flexibility, potentially lowering central risks, while centralized sorting delivers consistency and operational clarity. Factors such as labor availability, wage dynamics, and scalability can decisively influence this strategic choice.
3. Optimize Geolocation with Precision – The complexity of logistics networks, characterized by multidirectional flows, differentiates them from standard retail or wholesale distributions. Strategic optimization must carefully balance transportation costs, infrastructure investments, and last-mile delivery expenses. Purely quantitative logistics modeling tools, though valuable, cannot fully substitute expert judgment and practical experience.
4. Validate Your Network Model Thoroughly – Although modeling identifies an ideal cost structure, manual verification against real-world constraints—like warehouse availability, labor market realities, and operational feasibility—is critical. Such practical checks often significantly adjust initial theoretical outcomes.
5. Strategic Automation Decisions – Automation should be viewed not merely as cost-saving but as a strategic enabler. Carefully evaluate how various flows (regional and central units integration, numerous sorting directions, etc.) affect your choice of automation systems. Rigorous scenario testing against multiple variables helps balance CAPEX/OPEX considerations, optimizing infrastructure costs, reducing personnel requirements, and potentially increasing last-mile expenses.
6. Implement with Strategic Prioritization – Focus first on the areas with the greatest risk of capacity bottlenecks or where immediate gains in customer acquisition or infrastructure utilization are highest. Prioritizing effectively helps demonstrate tangible early benefits and builds momentum for broader implementation.

Now, we invite you to contribute your expert views: How have you approached network planning and automation in your logistics networks? What challenges and successes have shaped your experiences?

We look forward to your insightful comments!