It an organizations supply chain. A capable network

It is important to think through the long-term
consequences of facility decisions because facilities last a long time and have
an enduring impact on a firm’s performance. Managers must consider not only
future demand and costs but also scenarios in which technology may change
Chopra/Meindl (2010). Identifying optimal warehouse location can have impact on the
flexibility of an organizations supply chain. A capable network design can have
a positive long term effect on a supply chain performance, also it plays a
significant role in mitigating risks in supply chain. For ASML optimizing its
warehouse network design could bring long term benefits to its supply chain,
also increasing customer satisfaction. An optimal warehouse location can help a
supply chain be responsive whilst keeping its costs low. The warehouse location
problem is not a problem being solved every day or month for this reason
service network design falls under strategic planning.

The paper has attempted briefly to outline the existing network of
ASML Network design, ASML plans to optimize its warehouse network
design because the company is growing at a fast pace. Potential benefits of
network optimization will be highlighted once warehouse optimization results
are provided by Llamasoft. ASML decided to choose Llamasoft as an optimization
tool because it is the only available software that takes customs into
simulation,  customs delays lead to
significant problems. In current situation only a description on inputs that
are required for quantitative modelling have been provided in this paper. Cost
and service level are trade- offs  for
ASML, which has its focus on responsiveness. A firm may increase the
number of facilities to improve the response time to its customers. This
decision is-justified if the revenue increase from improved response outweighs
the increased cost from additional facilities Chopra/Meindl (2010). ASML would prefer
to locate warehouses closer to the customer and may select a high-cost location
if this choice allows it  to react
quickly to changing customer demands. In this paper trade- off between service
and cost have been discussed, the disadvantage of trade-offs is that nothing
can be assured. Bearing in mind the advantages and drawbacks of trade-offs to
customers could help identify the solution during the process of optimization.


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