Multidepot

Multidepot refers to a distribution network model that uses multiple depots or warehouses to store and distribute inventory. This approach allows regional coverage, faster delivery, and improved resilience by not relying on a single facility.

It is used in industries such as e-commerce, retail, manufacturing supply chains, and third-party logistics providers that serve geographically dispersed customers.

Core elements include choosing depot locations and capacities (network design), allocating inventory across depots and planning replenishment, demand forecasting and safety stock, order processing rules and allocation logic, routing and transportation management, and inter-depot transfers or cross-docking.

Planning and optimization often employ mathematical models like mixed-integer programming, decomposition methods, and heuristics, along with real-time visibility, demand sensing, and dynamic reallocation.

Benefits include reduced delivery times, higher service levels, better utilization of capacity, improved risk management against local disruptions, and more flexible response to demand variability.

Challenges involve higher system complexity, data integration requirements, coordination across depots, transfer costs and lead-time variability, inventory management across locations, and balancing holding costs with stock availability.

Metrics used to evaluate multidepot performance include total landed cost, service level or fill rate, on-time delivery, inventory turnover, and inter-depot transfer efficiency.

Related concepts and variants include multi-warehouse networks, hub-and-spoke designs, cross-docking, virtual depots, drop-shipping, and vendor-managed inventory.