Logistics network redesign: the practical 5-step guide

The logistics network — where the DCs sit, which modes you use and how cargo flows to the customer — is the biggest lever on transport cost. And transport is roughly 55% of logistics cost, which in Brazil reaches 15.5% of GDP (ILOS), well above mature economies. A poorly designed network costs a lot every month, silently.

The good news is that redesigning a network isn't a leap in the dark: it's a structured process. Here are the five steps Mais Kapital uses to cut transport cost without compromising service level.

1. When to rethink the network

Some signs the network is asking for a redesign: freight cost rising above inflation, inconsistent lead time between regions, DCs that haven't kept up with sales growth, mergers and acquisitions that duplicated structures, or a change in the demand profile (e-commerce, new markets). If two or more of these sound familiar, there's money on the table.

2. The 5 steps

Step 1 — Baseline. Map the current network: origins, destinations, volumes, cost per route, lead time and service level. Without the real picture, there's no comparison.

Step 2 — Scenarios. Model location and DC-count alternatives (network design): centralize, decentralize, create a regional hub. Each scenario yields projected cost and service level.

Step 3 — Modes and routing. Re-evaluate the mode mix (road, coastal shipping, rail), cross-docking and routing. Sometimes the gain is in how, not where.

Step 4 — Transition. A phased migration plan, with quick wins first and mapped risks — so you don't drop service during the change.

Step 5 — Govern. Install KPIs and rituals (the Govern phase of the MK Cycle) so the gain sustains and the network doesn't degrade again.

3. Checklist and pitfalls

• Decide with data (real volumes and costs), not with map intuition.
• Model 3 scenarios and test sensitivity to volume and freight.
• Include service level in the equation — cutting cost by dropping service isn't a gain.
• Phase the transition and protect the operation during the change.
• Consider the tax gain (interstate tax) when choosing locations.

Conclusion

Three points: (1) the network is the biggest lever on transport cost; (2) redesign is a process, not a hunch — baseline, scenarios, modes, transition and governance; (3) service and tax enter the equation alongside cost.