Manufacturing Network Optimization: A Lean Process Can Help Unlock Value

October 9, 2026 • 5 minute read
Author: Phyllis Jackson, Senior Manager, US Marketing, UPS

Key Points

• Lean inventory management and contingency planning can help manufacturers reduce disruption and improve return on investment (ROI).
• Analytics, artificial intelligence (AI) and other technologies can support network optimization by helping manufacturers lower costs and use assets more efficiently.
• Shipping speed and reliability are the top factors for small- and medium-sized businesses (SMBs) when selecting a manufacturer.

Q&A with Lorie Schlatterer: How can manufacturing logistics be optimized for better efficiency?

Optimizing manufacturing logistics to improve efficiency means looking closely at how facilities, transportation, inventory and contingency planning affect one another. Network modeling and analytics can help manufacturers compare options and manage costs while keeping service steady when demand or operating conditions change.

Lorie Schlatterer, Manufacturing Strategic Lead, UPS, offers guidance on mode selection, opportunities to improve ROI and how manufacturers can evaluate operational challenges more holistically.

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.”

How has mode selection evolved for network 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 supply chain network to identify where changes could improve performance.

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

For instance, if an SMB has a production deadline, we can analyze its 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 softer 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 can reduce reshipments and rework, cutting costs over time.”

How are manufacturers using modeling tools and analytics for network optimization?

“UPS serves a diverse customer base in terms of size, scalability and capabilities. Larger manufacturers are already using AI and analytics, 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 most SMBs, shipping speed and reliability are the top factors when selecting a manufacturer. 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 and cost efficiency from inbound materials through final delivery. 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 planning new facilities, relocations or operational changes can help manufacturers cut lead times. Our professionals can support manufacturing layout optimization before warehouse or production changes become too costly or difficult to make.

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.

Working with one logistics partner can make it easier to see and manage what’s happening throughout the supply chain. When manufacturers work with one partner for the whole supply chain, they can simplify coordination, control costs and expand globally while managing legal, regulatory and trade requirements.”

¹ “Digital Twins In The Supply Chain: Transforming Operations With Real-Time Simulation And AI,” Forbes, Accessed September 14, 2026.

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.