Network Optimization: A Lean Manufacturing Process Can Help Unlock Value

April 2, 2026 • 5 minute read

Author: Phyllis Jackson, Senior Manager, US Marketing, UPS

Key Points

• Lean inventory management and contingency planning are essential to maximizing return on investment (ROI).
• Analytics, artificial intelligence (AI) and other technologies promote network optimization, lower costs, better service and more efficient use of assets.
• Shipping speed and reliability are the top factors for 79% of small- and medium- sized businesses (SMBs) when selecting a manufacturer.²

Take a Holistic View of Manufacturing Network Optimization

Achieving the ideal blend of speed, flexibility and cost can significantly enhance operational performance for manufacturers. Lorie Schlatterer, Manufacturing Strategic Lead, UPS, offers guidance on meeting mode and network challenges, areas for increasing ROI and how a holistic view of operational change can drive sustainable results.

What is one of the biggest network challenges manufacturers face?

“It can be a challenge to pivot when the unexpected occurs, so we recommend that manufacturers build contingency planning into their processes. To that point, we’re starting to see growth in the use of digital twins, which are virtual replicas of physical operations.¹ This technology can help manufacturers simulate ‘what if’ scenarios to figure out the best way to pivot as quickly as possible to minimize disruption. Growth in the use of digital twins, which are virtual replicas of physical operations.¹

Contingency planning is crucial to help reduce downtime, especially amid urgent manufacturing demands.”

Mode selection is such an important part of contingency planning. How has it evolved for optimization?

“About 10 years ago, mode optimization was a manual, data-driven process that focused on isolating delivery points, warehouses and ship-from locations. Today, our customer solutions team provides end-to-end network modeling using mathematical and digital representations of a customer’s entire supply chain network for process optimization in manufacturing.

This is part of our suite of services, which also includes inventory planning, manufacturing network optimization, sustainability practices and warehousing.

For instance, if an SMB has a production deadline, we can analyze the facility footprint to meet their time-in-transit needs while balancing costs. Mode optimization helps manufacturers find the right balance between speed and cost.

The goal is to streamline your supply chain network’s physical footprint, making it smaller, leaner, more efficient and less costly.”

Which areas in the manufacturing network generate the highest ROI when optimized?

“Raw materials are often one of the highest production costs, so manufacturers need to work with a diverse supplier network to balance quality and expense.

Our inventory management solutions provide tools to optimize raw materials and finished goods inventories. Right now, we're seeing softening in demand and an uptick in unsold inventory across the industry. People are hesitant to overbuy, which is a major concern for manufacturers. So, lean manufacturing is key and manufacturers need to be strategic and purchase accordingly.

Managing transportation costs is another high ROI category. Choose a carrier that gives you plenty of options so you can balance timing, transit needs and budget. You need a reliable network that can stay flexible. For example, if there’s a production delay and you suddenly need to switch to air freight, we can make that happen, which is something not every carrier can offer.

The key to getting the best ROI is partnering with a company that helps you optimize shipping modes and stay adaptable as your business needs change.

Quality control is a third crucial category. Manufacturers must have robust quality control processes in place. Fewer mistakes in turn decreases reshipments or reproductions, significantly cutting costs over time.”

Are manufacturers using modeling tools and analytics to help the network optimization process?

“UPS serves a diverse customer base in terms of size, scalability and capabilities. AI and analytics are being used by the largest manufacturers, but for some smaller manufacturers, these tools could be an end goal over a one- to three-year period. That’s not to say every manufacturer will be able to do that tomorrow, but they need to start thinking about it, especially with the ability to leverage AI.

Tools like ORION, our AI-powered delivery routing technology, help us make the most of our own network so we can deliver and pick up shipments efficiently to meet manufacturing demand. The technology leverages predictive models and agentic AI solutions to help identify the most efficient routes so we can pivot if necessary. With ORION, we give our customers consistently reliable morning and afternoon delivery times that align with their business needs regardless of changing delivery conditions.”

How does UPS help manufacturers meet SMB needs for shipping and reliability?

“For 79% of SMBs, shipping speed and reliability are the top factors when selecting a manufacturer.² UPS is well-positioned to meet these expectations by leveraging both our air and ground networks to deliver on time – where mode optimization plays a critical role.

With The UPS Advantage - One Driver, One Network, One UPS, a dedicated UPS driver manages all shipments across ground, air, and international services, regardless of priority or destination."

While some competitors require multiple drivers from separate networks for ground and air, one UPS driver handles it all. This integrated network eliminates complexity, improves reliability, and delivers faster, more consistent service.”

As an end-to-end solutions partner, how does UPS give manufacturers a competitive edge?

“UPS’s end-to-end supply chain solutions help boost speed, reliability, cost efficiency and global reach for manufacturing network optimization. When manufacturers use our solutions, they can run with a smaller footprint, move faster and build a more resilient global supply chain than competitors that rely on a patchwork of different logistics vendors.”

Involving UPS early in the planning of new facilities, relocations or operational changes like nearshoring can help manufacturers cut lead times. Our professionals can come in to help with a warehouse and production layout before these steps become too costly or challenging.

When we talk about end-to-end solutions, we’re basically talking about covering every step of the supply chain, from getting materials in, to manufacturing and distribution, and all the way through final delivery or even returns.

For example, if a manufacturer needs help with spare-parts logistics, UPS Service Parts Logistics has them covered. With more than 850 field stocking locations around the world, we can get parts wherever they need to go, with full visibility, smart parts planning and easy return management. We also offer plenty of delivery options, like UPS Next Day Air^®, UPS 2nd Day Air^®, UPS 3 Day Select^® or UPS Ground services.

We make it easier by giving you visibility, control and smooth integration at every stage. And when manufacturers work with one partner for the whole supply chain, they get more flexibility and scale, save on costs, gain better visibility and can easily expand globally while staying on top of legal, regulatory and trade requirements.”

¹ “Digital Twins In The Supply Chain: Transforming Operations With Real-Time Simulation And AI,” Forbes, April 29, 2025.

² “2025 Third Quarter Manufacturers’ Outlook Survey,” National Association of Manufacturers, accessed September 26, 2025.

Individual results and options will vary. UPS makes no promises of any specific outcome in this document but instead provides only example outcomes based on certain UPS customer experiences.