Ballou breaks down the supply chain into five critical managed areas:
Need to know how many warehouses you need? Ballou’s rule of thumb: Increasing the number of warehouses from X to Y reduces customer transit time, but increases inventory by the square root of (Y/X). If you double your warehouses (2/1), you increase inventory by only the square root of 2 (about 41%). This formula is pure gold for network planning. Ballou breaks down the supply chain into five
Ronald H. Ballou's seminal work, , is widely considered the foundational text for modern logistics education, bridging the gap between tactical operations and strategic planning. Originally focused on "physical distribution" (outbound goods), his frameworks evolved to embrace integrated supply chain management (SCM), emphasizing that firms succeed only when their entire network—from raw material suppliers to final customers—is synchronized. Core Principles and Frameworks This formula is pure gold for network planning
Explores facility location decisions and the broader network planning process. "Business Logistics/Supply Chain-A Vital Subject
Determining where warehouses and plants should be.
You can read the foundational first chapter, "Business Logistics/Supply Chain-A Vital Subject," hosted via the University of Washington CEE Department .
Ballou was one of the first to apply to logistics. His work moved the industry away from "gut feelings" toward data-driven decision-making .