Distribution planning

Stock where it’s needed, moved at the lowest cost.

Distribution planning decides where stock should sit and how it moves through your network, from plants to warehouses to customers. Linear and mixed-integer optimisation finds the optimal plan within your capacities, lead times and costs, and turns it into stock transfer orders.

Start with Horizon InstantBook a demo
Distribution planNetworkSummary
Optimiser
Example · week 12, stock cover per DC against target
Cover by locationTarget 1.5–2.5 wks
DC North3.1 wks2.4 wks
DC East0.8 wks1.6 wks
DC South1.9 wks
TransferUnitsTruckCost
Plant A → DC North2,400Large€1,480
Plant A → DC East1,600Large€1,120
DC North → DC East600Medium€390
3 stock transfer orders ready for the ERPService 98.2%
3tiers

plants, warehouses and customers in one optimisation

PlantsWarehousesCustomers
LP + MIP

linear and mixed-integer optimisation within every capacity

Constraints weighed together
Truck capacityWarehouse limitsLead times
1data model

shared with inventory, production and procurement planning

DistributionInventoryProductionProcurement
PlantsDistribution centresCustomers2,4001,6009001,7001,5009001,8007001,700Plant A4,000 / weekPlant B2,600 / weekDC NorthDC EastDC SouthRetail NorthWholesaleRetail EastExportRetail SouthExample: units per week. One optimisation decides every flow, within truck, warehouse and lead-time limits.
Flowplants, DCs and customers
Plant A2,400 to DC North, 1,600 to DC East
Plant B900 to DC East, 1,700 to DC South
DC NorthRetail North and wholesale
DC EastRetail East and export
DC SouthRetail South

What you can do

One network, one plan.

Multi-location optimisation

Each location served from the best source

  • Stock allocated from plants to warehouses based on demand, stock targets and capacity.
  • Which plant or warehouse serves which customer or region decided on cost and service.
  • Service-level optimisation weighs transport and holding cost against the service you promise.
Sourcing · Retailer West
Example · per month
SOURCETRANSPORT COSTSERVICEDirect from plantLonger lead time, part loads€41,00096.1%Via DC EastShorter lead time, extra handling€36,50097.4%Via DC NorthFull loads, same delivery time€33,80098.2%SERVICE-LEVEL OPTIMISATIONRetailer West served from DC NorthLowest transport cost at the highest serviceAccept

Allocation and transfer rules

Fair shares when supply is short

  • When there isn’t enough to go round, stock is allocated by the priority rules you set.
  • Transfers between locations proposed before stock runs short in one place and piles up in another.
  • Approved transfers become stock transfer orders, ready for your ERP.
Allocation · SKU-2207
Example · 3,000 available, 3,600 requested
AllocatedRequested
CUSTOMERALLOCATED OF REQUESTEDRetailer NorthPriority 11,200 of 1,200Retailer EastPriority 11,000 of 1,000WholesalePriority 2600 of 900ExportPriority 3200 of 500TRANSFER PROPOSAL · STOCK TRANSFER ORDERDC North → DC East · 600 unitsBefore DC East runs short in week 13Accept

Transport and mode planning

Full loads, within every capacity

  • Shipments built into full loads, within truck, container and warehouse capacity.
  • The truck type chosen for each shipment, with transport and holding cost weighed together.
  • Warehouse and handling capacity, lead times and minimum shipments, all in one model.
Load builder · DC East
Example · week 12
Shipment 1 · 58% fullShipment 2 · 41% fullOne shipment · 99% fullTruck type: LargeONE MODEL · EVERY CAPACITYTruck capacityWarehouse handlingLead timesMinimum shipmentsHolding cost

Learn more

Learn more about distribution planning.

What is distribution planning software?Supply planning softwareReplenishment planning softwareSupply chain planning softwareInventory optimisation

FAQ

Distribution planning, answered.

What is distribution planning and why does it matter?

Distribution planning decides how many units of each item go to each location or customer, based on demand, capacity and cost. It gets the right products to the right place at the right time without overspending on transport or holding stock you don’t need, which keeps service up, logistics costs down and the supply chain in step.

How do you decide how much stock to send to each location?

By combining the demand forecast, safety stock requirements, transport constraints and service-level targets. Optimisation then weighs costs, warehouse capacity and customer priorities, so every location gets the right quantity, not too much and not too little, at the lowest logistics cost.

What role does optimisation play in distribution planning?

Linear and mixed-integer optimisation decides the best way to spread limited stock across locations. It evaluates many possible allocations to minimise cost and avoid shortages, while respecting constraints such as truck capacity and warehouse limits, so guesswork makes way for data-driven decisions.

How does AI support distribution planning?

AI helps by predicting demand shifts, spotting anomalies and recommending priority shipments, based on historical patterns, customer behaviour and seasonality. Optimisation decides what to ship where; AI helps predict when an adjustment is needed.

How does Horizon support distribution planning and allocation?

Horizon’s optimisation decides how many units of each item go to each location or customer, considering demand forecasts, transport limits, warehouse capacity and fulfilment priorities, and generates the stock transfer orders. Scenario planning and the connection to your ERP keep the plan current.

How does it work with inventory optimisation?

Inventory optimisation sets the stock targets per item and location; distribution planning moves stock through the network to meet them at the lowest cost.

Which constraints can it take into account?

Warehouse and handling capacity, transport capacity, lead times, minimum shipments and priority rules for allocation, all in one model.

How fast can we start?

Start with Horizon Instant: demand planning on your own data, up and running in less than 24 hours. The supply modules then build on the same data model.

See the optimal network plan on your own data.

Start with Horizon Instant: demand planning on your own data, up and running in less than 24 hours.

Start with Horizon InstantBook a demo