What is Blue Yonder Network Planning?
Blue Yonder Network Planning is a strategic modeling and optimization solution that enables organizations to design the optimal footprint for their supply chain—determining the best number, location, and size of factories, distribution centers (DCs), and stock points to balance cost, service, and risk.
Traditionally, network design was a static, once-every-five-years consulting project. Blue Yonder transforms this into a continuous business process. By creating a digital twin of the physical supply chain, it allows planners to test strategic changes (e.g., "Where should we build our next warehouse?") and tactical adjustments (e.g., "How do we route product X this quarter?") without disrupting actual operations.
Why It Matters: The End of the Rigid Supply Chain
In a stable world, a supply chain network could remain unchanged for a decade. In today's volatility, a rigid network is a liability. Shifts in demand centers, tariff changes, or port disruptions can render a network inefficient overnight.
Blue Yonder Network Planning moves companies from fixed networks to adaptive networks. It answers the "Big Questions" of the supply chain:
- Structure: Should we centralize distribution or regionalize it to be closer to the customer?
- Flow: Which factory should supply which DC to minimize total landed cost?
- Resilience: If a primary supplier fails, does the network have the redundancy to recover?
How It Works: Optimization and Scenario Planning
The solution leverages advanced algorithms to analyze complex trade-offs across transportation, inventory, and facility costs.
- Digital Twin Modeling: It builds a virtual replica of the supply chain, ingesting data on lanes, rates, capacities, and demand.
- Multi-Objective Optimization: Unlike simple solvers that only look at cost, Blue Yonder optimizes for multiple variables simultaneously—minimizing Total Landed Cost while meeting specific Service Level Agreements (SLAs) and Carbon Emission targets.
- Scenario "What-Ifs": Planners can simulate unlimited scenarios—such as opening a new cross-dock, changing transport modes from road to rail, or near-shoring production—to quantify the impact before capital is committed.
Key Benefits
- Inventory Reduction: By integrating Multi-Echelon Inventory Optimization (MEIO), the solution identifies where to pool inventory to lower safety stock requirements, typically delivering 10–30% reductions in total inventory.
- Sustainability & ESG: It allows companies to model the carbon footprint of different network configurations, helping operationalize sustainability goals by finding routes that are both cost-effective and greener.
- Improved Asset Utilization: Determines the optimal size and throughput for facilities, ensuring capital isn't wasted on empty warehouse space or idle trucks.
- Risk Mitigation: Identifies single points of failure in the network structure, allowing companies to build resilience strategies before a disruption occurs.
The Blue Yonder Difference
Blue Yonder differentiates its offering by connecting Strategy to Execution. While many network design tools are standalone "sandbox" environments, Blue Yonder Network Planning feeds directly into the operational planning stack. The strategic decisions made in the model (e.g., "Service the Northeast from the Ohio DC") become the rules that drive daily execution in the Transportation Management System (TMS) and Warehouse Management System (WMS), closing the gap between the plan and the reality.