Designing for uncertainty: Europe's network rethink braces for the unknown
- 1 day ago
- 3 min read
Network optimization is jumping from efficiency to a balance between efficiency and resilience
Across Western Europe, factory and distribution center closures are increasingly making headlines. From manufacturers and retailers to consumer goods companies, organizations are consolidating sites, streamlining operations and reassessing their physical footprint. At first glance, these decisions may look like classic cost-cutting exercises. Yet a closer look reveals that companies are redesigning networks built for a world that no longer exists.
For decades, supply chains were optimized for efficiency. Global trade expanded, energy remained relatively affordable and demand patterns were largely predictable. The winning formula was straightforward: centralize operations, drive economies of scale and reduce costs wherever possible. Those assumptions no longer hold.
Nowadays, organizations face a combination of challenges that would have been difficult to imagine just a few years ago. Demand changes faster, labor shortages continue to intensify and energy costs remain volatile. Geopolitical tensions create uncertainty around international trade routes and sourcing strategies, from unpredictable tariffs to the Strait of Hormuz. At the same time, customers expect faster delivery, greater availability and more personalized service. As a result, many production and distribution networks are struggling to keep pace with the realities of the modern market. Closing locations is no longer a simple fix.
Boards are therefore starting to ask themselves a different question: Is our current operating footprint fit for the future? This shift is elevating network optimization from an operational exercise to a strategic priority, because you cannot design a network based on the assumption that the future is predictable.
Why the cheapest network isn't always the best
The cheapest possible network is no longer the guaranteed winning answer on the quest for optimization. Instead, the most resilient network offers the most value in the long term because a network designed solely around efficiency may perform exceptionally well under normal circumstances but quickly becomes vulnerable when faced with disruption. Recent years have demonstrated how fragile even highly optimized supply chains can be when confronted with labor shortages, geopolitical shocks, sudden shifts in demand or other unexpected disruptions, such as low water levels in rivers disrupting waterway transport in Europe in the summer of 2026. Resilience has therefore become a competitive advantage. Companies increasingly recognize that the ability to adapt, absorb shocks and continue serving customers can be just as valuable as operating at the lowest possible cost.
To make these decisions, organizations are turning to more sophisticated tools and techniques such as scenario-based decision making and digital twins. These tools allow leaders to test multiple futures before committing to major investments or restructuring decisions.
What happens to service levels if a distribution center is closed? How would transport costs change if production moves closer to key markets? How does a network perform when regional demand suddenly accelerates? What level of risk reduction justifies the addition of an extra production site?
The best networks are not optimized based only on average conditions but are designed to include moments of extreme stress. For instance, organizations that are further along explicitly map historical disruptions such as COVID-19, the Suez Canal disruption and geopolitical tensions to understand how their network behaves under stress. This allows a digital twin to show what breaks first under stress, not merely predict a future scenario.
This approach is becoming increasingly important as mergers and acquisitions continue to reshape entire industries. Bringing organizations together creates opportunities for efficiency, but also raises complex questions about how manufacturing, warehousing and distribution networks should be redesigned. Decisions that once seemed operational now have direct implications for growth, customer experience and long-term competitiveness.
Companies that successfully optimize their networks often begin by improving their understanding of demand patterns, cost structures, capacity constraints and historical disruptions. AI and advanced analytics can accelerate decision-making, but only when the underlying data is consistent and trustworthy. Unfortunately, many organizations still underestimate this challenge. In many cases, cleaning and structuring data creates more value than introducing new algorithms. As a rule of thumb, if the outcome of a scenario changes depending on the data source or definition used, the data foundation is not yet strong enough to drive strategic decisions.
The recent wave of closures and consolidations across Europe reflects a broader shift in how organizations think about their future. Networks that were once designed for stability are now being redesigned for uncertainty, not merely to cut costs. In an increasingly unpredictable world, the goal is no longer to build the perfect network for one expected future, but a resilient network that performs across many possible futures.
Want to rethink your network? Let's chat
Cazijn Langeler
Managing Director Retail & Products
+31610545518
