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Significant, but must be combined with component commonality, and build to order. Must move product customization to pull phase of supply chain and hold inventories as common components during the push phase
Opportunity most significant for new, hard to forecast products
Industry Benchmarks: Number of Distribution Centers Sources: CLM 1999, Herbert W. Davis & Co; LogicTools Avg. # of WH 3 14 25 Pharmaceuticals Food Companies Chemicals - High margin product - Service not important (or easy to ship express) - Inventory expensive relative to transportation - Low margin product - Service very important - Outbound transportation expensive relative to inbound