Reclaiming the Long View: How Network Optimisation and Scenario Modelling Drive Strategic Investments in 2025

Introduction: A Shift in Perspective

2024 was a year of firefighting for many organisations, with leaders focused on managing immediate pressures such as supply chain disruptions, inflation, and geopolitical uncertainty. As the dust settles, 2025 is shaping up to be a year of recalibration. Companies are once again exploring medium to long-term investments to secure a competitive edge in an evolving landscape.

Network optimisation and scenario modelling are pivotal in this shift. These tools allow organisations to analyse, predict, and plan their supply chain strategies more effectively, unlocking cost savings and operational efficiencies across multiple areas.

This article delves into how network optimisation can drive tangible benefits across warehouse labour, freight, warehouse rents, and inventory, enabling organisations to achieve a balance between short-term agility and long-term sustainability.

Understanding Network Optimisation and Scenario Modelling

Network Optimisation involves evaluating an organisation's supply chain and logistics networks to determine the most efficient configuration. This might include decisions about warehouse locations, transport routes, and inventory placement, all aimed at minimising costs and maximising service levels.

Scenario Modelling complements optimisation by allowing businesses to simulate different conditions, such as changes in demand, costs, or constraints. This proactive approach helps leaders make informed decisions in an uncertain environment.

In 2025, organisations leveraging these tools gain the ability to:

• Reduce costs through efficiency improvements.
• Enhance customer satisfaction by improving service reliability.
• Build resilience by stress-testing networks against potential disruptions.

Key Areas of Cost Optimisation

1. Warehouse Labour Spend

Labour remains one of the most significant operating costs in supply chains. Network optimisation identifies opportunities to reduce labour spend by:

• Consolidating Warehouses: Reducing the number of facilities while maintaining service levels can eliminate redundant labour requirements.
• Improving Labour Utilisation: Optimising workflows and scheduling can ensure the workforce is deployed efficiently.
• Leveraging Automation: Network analysis can highlight where investments in automation, such as robotics or advanced WMS (Warehouse Management Systems), could deliver a strong ROI.

Example:
A major FMCG company used network optimisation to consolidate three regional warehouses into one strategically located distribution centre. This move reduced labour costs by 20%, as fewer workers were needed to manage inventory and fulfil orders.

2. Freight Spend

Freight is another high-impact area where optimisation delivers results. By evaluating transport routes, carrier options, and modal choices, organisations can:

• Minimise shipping costs through efficient routing.
• Improve load utilisation, reducing the number of trips required.
• Shift to cost-effective transport modes where feasible, such as rail or sea freight for long distances.

Scenario Modelling in Action:
Businesses can use scenario modelling to assess the impact of fuel price increases or changes in carrier rates, allowing them to secure better contracts or adjust pricing strategies.

Case Study:
A retailer in ANZ re-evaluated its distribution network, switching from road to rail for inter-state deliveries. This reduced freight costs by 15% and lowered carbon emissions, aligning with sustainability goals.

3. Warehouse Rents

In 2025, skyrocketing commercial property prices and rising rental rates are pressing issues for businesses. Network optimisation can help mitigate these costs by:

• Identifying underperforming warehouses that could be closed or relocated.
• Assessing lease agreements and exploring renegotiation or alternative options.
• Exploring shared warehousing models or co-location with partners to reduce fixed costs.

Data-Driven Lease Decisions:
Scenario modelling can simulate the long-term financial impact of staying in a high-rent facility versus moving to a more affordable location, considering factors like transport cost implications and service levels.

4. Inventory and Working Capital

Inventory optimisation is a cornerstone of working capital management. Excess stock ties up capital and increases carrying costs, while stockouts can damage customer relationships. Network optimisation addresses this by:

• Balancing inventory levels across the network to minimise overstocking and understocking.
• Positioning inventory closer to demand centres to reduce lead times and safety stock requirements.
• Improving demand forecasting to align inventory with actual market needs.

Advanced Tools:
AI-powered forecasting and optimisation tools can further enhance accuracy, helping businesses dynamically adjust inventory in response to changes in demand or supply.

Real-World Impact:
A healthcare company used network optimisation to centralise its inventory at a regional distribution hub. This reduced inventory holding costs by 25% while maintaining 98% service levels.

Why 2025 is the Year for Medium to Long-Term Investments

Several factors are driving the renewed focus on long-term planning and network optimisation in 2025:

1. Economic Stability:
   After navigating economic turbulence in 2024, businesses now have a clearer outlook for growth and investment opportunities.
2. Technological Advancements:
   The proliferation of digital tools, such as AI-driven analytics, cloud-based platforms, and low-code/no-code solutions, makes it easier and more cost-effective to implement network optimisation projects.
3. Sustainability Pressures:
   Regulatory and consumer demand for sustainable practices are pushing organisations to optimise their supply chains to reduce emissions and waste.
4. Competitive Advantage:
   Companies that proactively invest in their networks can position themselves ahead of competitors, particularly as supply chain resilience becomes a key differentiator.

Challenges and How to Overcome Them

While network optimisation offers substantial benefits, it is not without challenges. Common obstacles include:

• Data Quality Issues: Incomplete or inaccurate data can lead to suboptimal outcomes.
• Resistance to Change: Employees and stakeholders may resist significant changes to established processes or locations.
• Cost of Implementation: Upfront investment in technology and expertise can be a barrier for some organisations.

Strategies for Success:

• Conduct thorough data audits and invest in data cleaning processes.
• Engage stakeholders early to build buy-in and address concerns.
• Partner with experienced consultants, such as Trace Consultants, to guide implementation and ensure ROI.

The Role of Scenario Modelling in Resilience

In addition to cost optimisation, scenario modelling enhances resilience by helping businesses prepare for various eventualities, such as:

• Sudden demand spikes or drops.
• Disruptions in supply routes.
• Changes in regulatory or market conditions.

By simulating these scenarios, leaders can develop contingency plans that minimise disruption and maintain business continuity.

The ROI of Network Optimisation

Organisations that invest in network optimisation and scenario modelling typically see a strong return on investment. Benefits include:

• Cost Savings: Across labour, freight, rent, and inventory.
• Improved Service Levels: Faster delivery times and higher accuracy.
• Resilience: Greater ability to navigate disruptions and adapt to changes.

How Trace Consultants Can Help

At Trace Consultants, we specialise in helping businesses navigate complex supply chain challenges. Our expertise in network optimisation and scenario modelling enables organisations to unlock cost savings and build resilient, efficient networks.

We work closely with clients to:

• Assess current network performance.
• Develop data-driven optimisation strategies.
• Implement solutions tailored to business needs.

As 2025 unfolds, business leaders are seizing the opportunity to pivot towards strategic, medium to long-term investments. Network optimisation and scenario modelling are essential tools in this journey, enabling organisations to reduce costs, enhance efficiency, and build resilience.

The question is: Are you ready to optimise your network and secure a competitive advantage for the future?

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Queen's Wharf, Brisbane

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The trace. team are honoured to partner with The Star Entertainment Group to implement a supply chain operating model that will help shape one of Queensland’s most iconic tourist and entertainment destinations - The Star's Queen's Wharf Brisbane. Together in partnership with Shaun Micallef, Senior Manager of Supply Chain - Brisbane and his team, trace. are helping to implement safe and efficient supply chain operations for the Food & Beverage, Hotels, Consumables, Residential and Retail Outlets that will improve service, enhance supplier collaboration, minimise cost to serve, and contribute to mitigating safety & congestion risks.

As part of the program the trace. team have contributed to the design, development and implementation of a range of new processes and technology solutions for the supply chain operations of the new precinct.

"It is an exciting time for Queensland, particularly with Queens Wharf Brisbane and its surrounding infrastructure coming online well ahead of the 2032 Brisbane Olympics. We are supporting the Pre-Opening team at The Star to deliver an end to end supply chain operating model that is transformative in nature for the Hospitality industry. trace. are helping to shape the supply chain infrastructure and operational capabilities for the future F&B & Hospitality Outlets - touching on all areas from planning, ordering, receipting, processing, storage, supplier management, and KPI reporting." said Shanaka Jayasinghe, Partner at trace.

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About trace.

trace. is a leading supply chain solutions provider committed to helping businesses optimise their supply chain operations through innovative processes and advanced technology. With a focus on safety, efficiency, and collaboration, trace. partners with organisations across various industries to deliver tailored, end-to-end solutions that drive success and growth.

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Contact us today, trace. your supply chain consulting partner.

Interview: Designing Optimal Back of House Infrastructure for F&B and Hospitality Destinations.

Interviewer: Today, we're speaking with Shanaka Jayasinghe, an expert in designing and optimising 'back of house' infrastructure for food & beverage and hospitality venues. Shanaka, with the Olympics around the corner and major events & destination venues in mind, can you share insights into the importance of safe, scalable, and efficient infrastructure?

Shanaka Jayasinghe: Absolutely. The 'back of house' is the engine room for any major F&B or hospitality venue, especially those of larger scale, for example Integrated Resort Venues and Major Sporting Precincts. Efficient design is critical not only for the success of the event but also for the safety and experience of staff and guests, and the long-term legacy for the community.

The Importance of 'Back of House' Infrastructure

Interviewer: What makes the 'back of house' infrastructure so crucial for major F&B and hospitality destinations?

Shanaka Jayasinghe: 'Back of house' areas like loading docks, kitchens, and waste management systems are vital for the smooth operation of any large venue. They must be designed to handle high volumes of goods and people, ensuring that everything from food delivery to waste disposal happens seamlessly. Safety, scalability, and efficiency are key. The infrastructure must protect staff and guests, adapt to fluctuating demands, and operate with minimal waste and maximum productivity.

Designing for Safety, Scalability, and Efficiency

Interviewer: How can venues ensure their 'back of house' infrastructure is safe, scalable, and efficient?

Shanaka Jayasinghe: It starts with thoughtful design:

1. Safety: This includes everything from ensuring proper ventilation in kitchens to designing traffic flows that prevent accidents between vehicles and pedestrians. Compliance with health and safety regulations is a minimum standard, but truly effective designs anticipate and mitigate risks before they arise.
2. Scalability: Venues must accommodate both everyday operations and peak demands during major events. This might involve modular spaces, flexible equipment, or staffing plans that can expand and contract as needed.
3. Efficiency: Efficient 'back of house' designs reduce operating costs and improve service. This involves optimizing layouts for smooth flows of goods and people, investing in high-quality equipment that speeds up production and reduces energy use, and implementing systems that reduce waste.

Stages in Planning for Major Events

Interviewer: What are the different stages in planning 'back of house' infrastructure for a major event like the Olympics?

Shanaka Jayasinghe: Planning for such events typically involves several stages:

1. Conceptual Design: This is where the vision for the venue is created, considering the unique requirements of the event, the expected number of guests, and the types of services to be provided.
2. Detailed Design and Development: Once the concept is approved, detailed plans are drawn up. This stage involves close collaboration with architects, engineers, chefs, and other stakeholders to ensure every aspect of the 'back of house' is optimally designed.
3. Construction and Fit-Out: This stage turns the plans into reality. It's crucial to maintain quality control and stay on schedule and budget.
4. Operational Planning and Training: Before the venue opens, staff need to be recruited, trained, and familiarized with the facilities. Operational plans for everything from supply chain logistics to emergency responses must be tested and refined.
5. Event Execution and Review: During the event, the 'back of house' must operate like clockwork. Afterward, a thorough review can capture learnings for future events.

The Pivotal Role of Procurement in Planning Major Events

In planning for major events, the role of procurement is both critical and multifaceted. It involves not just acquiring goods and services but also strategically managing relationships and resources to ensure that every aspect of the event is delivered on time, within budget, and to the highest standards. Here’s how procurement plays a key role across different stages:

1. Identifying Needs and Sourcing Suppliers: Early in the planning process, procurement teams work closely with all stakeholders to identify the precise needs of the event, from construction materials for temporary structures to food and beverages for hospitality services. They then source suppliers who can meet these needs, considering factors such as cost, quality, capacity, reliability, and sustainability.
2. Assessing and Partnering with Suppliers: Once potential suppliers are identified, the procurement team assesses them based on various criteria, including past performance, financial stability, and compliance with relevant laws and regulations. They look for partners who not only provide the necessary goods and services but can also adapt to the dynamic nature of event planning, often under tight timelines.
3. Contracting and Managing Supplier Relationships: Procurement is responsible for negotiating contracts that protect the interests of the event while ensuring fair terms for suppliers. This includes clear specifications, delivery schedules, and performance criteria. Throughout the event planning and execution, procurement maintains close communication with suppliers, managing orders, handling logistics, and resolving any issues that arise.
4. Operational Procurement for 'Business as Usual' (BAU): Beyond the unique demands of the event itself, procurement ensures the ongoing supply of regular goods and services needed for the 'back of house' operations. This includes everything from routine maintenance supplies to daily food deliveries, ensuring that the event's infrastructure and services run smoothly throughout.

Effective procurement is about more than just buying; it's about strategically sourcing and managing resources to deliver a successful event. From the initial planning stages to the final breakdown, procurement teams are integral in ensuring that every element comes together seamlessly, contributing to the overall success and sustainability of the event.

Impact of Proper Design on Experience and Legacy

Interviewer: How does proper 'back of house' design impact the overall experience and leave a sustainable, lasting positive change for communities?

Shanaka Jayasinghe: A well-designed 'back of house' ensures that guests enjoy seamless service, enhancing their overall experience. For staff, it creates a safe and pleasant working environment. But the impact goes beyond the event itself. Sustainable designs can reduce the environmental footprint of venues, promote local employment, and leave behind facilities that benefit the community for years to come. For instance, a modular kitchen used during an event can be repurposed for community use afterward, or waste management systems can set new standards for environmental responsibility in the area.

The Role of Consultancy in Designing Back of House Infrastructure

Interviewer: How can consultants like you assist in this complex process?

Shanaka Jayasinghe: Consultants bring a wealth of experience and a fresh perspective. We can guide venues through each stage of the process, from initial concept to post-event review. Our role often involves benchmarking against best practices, advising on the latest technologies and methods, and helping to coordinate the many stakeholders involved in such projects. Ultimately, we're here to ensure that the 'back of house' infrastructure meets the highest standards of safety, scalability, and efficiency.

Interviewer: Thank you, Shanaka, for sharing your valuable insights on designing effective 'back of house' infrastructure for major F&B and hospitality destinations. Your expertise offers a clear guide for businesses looking to excel in hosting major events.

Shanaka Jayasinghe: It's been a pleasure. Remember, the 'back of house' may be behind the scenes, but it's central to the success of any major event or destination. Proper planning and design are key to delivering a safe, enjoyable, and sustainable experience.

The Importance of 'Back of House' Infrastructure: The Risks of Poor Design

When delving into the 'back of house' infrastructure, the stakes of design and execution are incredibly high. Poorly designed back-of-house areas can have cascading effects on the entire operation of major F&B and hospitality venues, particularly during large-scale events. Let's break down the potential pitfalls of inadequate back-of-house infrastructure:

Unsafe Working Environments

Inefficiently designed spaces can lead to overcrowded, chaotic, and unsafe working conditions. Poorly planned traffic flows might lead to accidents between staff or between staff and vehicles, especially in high-paced environments. Insufficient ventilation in areas like kitchens can lead to health risks, while inadequate waste disposal systems can create hazardous conditions.

Traffic Congestion and Parking Issues

Loading docks are the lifeblood of any large venue, facilitating the smooth flow of goods in and out. However, if these areas are not strategically planned, they can become bottlenecks, causing traffic congestion not only within the venue but also on surrounding roads. Similarly, poorly designed guest car parks can lead to frustrating delays for attendees, negatively impacting their overall experience and potentially causing safety issues.

High Cost to Serve

A poorly designed back of house significantly increases the cost to serve. Inefficiencies in the layout can lead to longer distances for moving goods from the loading dock to storage areas or kitchens, increasing labor and equipment costs. If waste management systems are not optimally designed, the costs and complexities of disposal can escalate quickly.

Increased COGs and Labour Costs

Suboptimal back-of-house design can lead to higher costs of goods sold and labor. For instance, inefficient kitchen designs might require more staff to perform the same amount of work, or lead to higher wastage of ingredients. Poorly organized storage areas can result in damaged goods or increased time spent locating items, both of which can significantly drive up costs.

Compromised F&B Experience

The ultimate goal of any F&B and hospitality venue is to provide an exceptional experience to guests. However, if the back of house is poorly designed, it can lead to delays in service, errors in order fulfillment, and a general decrease in the quality of food and beverages. This not only impacts the venue's reputation but can also lead to reduced patronage and revenue.

In summary, the 'back of house' infrastructure is a critical component that, if not properly designed, can lead to unsafe working conditions, operational inefficiencies, increased costs, and a diminished guest experience. It's a foundational element that requires careful, strategic planning and execution to ensure the success and sustainability of any major F&B and hospitality operation.