Network design decisions plays an important role and
can have a huge impact on the performance of an organization, a good network
design can help an organization in identifying optimal supply chain
configuration(Chopra and Meindl, 2010). This paper describes the current warehouse network
of ASML, and suggests using qualitative as well as quantitative methods to
analyze and optimize regional distribution network, also determine new location
for global distribution center. Scope of this paper is limited to providing
factors that can be used to optimize ASML’s regional warehouse network and suggesting
a method which can be used to identify suitable location for global
distribution center.

Introduction to ASML:

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ASML is an original equipment manufacturer of lithography
systems for the semiconductor industry. (ASML, n.d). A lithographic equipment is one the most expensive equipment in
a semiconductor fab, therefore it is necessary for ASML customers that the
“litho” tool stays up for production. ASML has very tight SLA’s1
with its customers for system availability. In order to meet  these SLA’s ASML has designed its warehouse
network which is spread over multiple locations like Europe, North- America and
Asia. ASML has approximately 52 distribution centers located worldwide, also
one global distribution center which is located in Korea.(ASML,n.d)

Structure of this paper: The first section provides
introduction to ASML, the second section provides problem description, the
third section provides brief description about regional and global distribution
network of ASML, the fourth section discusses network optimization factors that
can help ASML in designing an optimal regional distribution network, also proposes
to use gravity method which  can be used
to identify new location for global distribution center, the fifth section
discusses trade off and principles for ASML, finally section six provides
conclusion of this paper.


Problem Description:

Due to the rapid growth of ASML’s business and increasing
volume of materials being handled, regional distribution network has not been analyzed.
Network design is currently performed on an ad hoc basis without professional
tooling or process. Under strategic
planning, ASML is considering to optimize its regional distribution network and
plans to open a new global distribution center which can satisfy customer
demands and reduce transportation time (Chopra and Meindl, 2010). ASML would like to analyze and  optimize its regional distribution network
using professional methods which use network design principles, also wants to
determine new location for its global distribution center.

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