Is your gut feeling telling you ‘’My Supply Chain network fulfills customer demand, but, what-if…?’’
You are positive your company’s network design requires some restructuring, but you don’t have the assets to convince the rest of the team? We got you! Scenario Comparison in Supply Chain isn’t only a time and cost saver, but also a great way to support your intuition.
What to expect from Supply Chain Scenario Comparison?
Analyzing different Supply Chain Scenarios offers a systematic method for supply chain analysts and planners to navigate the intricacies of geopolitical tensions, material availability, pricing fluctuations, decisions regarding manufacturing locations, changing retail and distribution strategies, and considerations related to environmental, social, and governance factors. This approach will help you recognize disruptions, risks, and challenges that could influence your company’s Supply Chain.
Disruption happens, and being well-prepared is key. Your most valuable tool in such situations is making decisions based on data. It involves collecting up-to-date information, analyzing it, predicting future risks and disruptions, and simulating potential scenarios. Did you know that the impact of data-driven decision-making is significantly amplified when disruptions occur?
Leveraging data-driven decision-making has the potential to yield improvements of up to 10% in conditions characterized by disruptions.
Optimizing Network Design – where to start?
When it comes to network design optimization, you might want to run AS-IS Analysis, design a completely new network from scratch, optimize an existing network, or compare future strategies. Though it doesn’t include detailed information such as the costs, or number of shipments, a perfect starting point for each of these cases is the Center of Gravity Analysis. It is indeed a simple analysis if you have the right tool.
Center of Gravity vs. Center of Gravity Plus vs. Fixed CoG?
What’s the difference?
Center of Gravity
- Calculates the weighted centers based on one dimension (weight)
- The optimization criteria is to minimize “weight x distance” for all customers.
Center of Gravity Plus
- Calculates the weighted centers based on up to three dimensions (weight, volume, revenue)
- The importance of the three dimensions can be adjusted via sliders
- Calculates the centers based on already existing center locations
- Sensitivity Analysis shows up the saving potential by moving existing centers
Did you choose your Center of Gravity tool? Great! Does the optimization process end here? You can try, but probably not. You want to continue with a more sophisticated analysis, including various variables and constraints.
How to use Network Design Scenario Comparison?
The Network Design App and Network Design Plus App incorporate factors like vehicle capacities, shipment numbers, costs, and factory locations. In these apps, you’ll input information about your factories, customers, and potential warehouses. By considering your input, along with specifying the minimum and maximum number of warehouses you aim to find, the tool will determine the best number and locations for your distribution centers. However, you might be wondering how to accurately decide the number of potential warehouses to include in the Warehouse Table of the Network Design App.
To get a rough idea about the location of your distribution centers, run the Center of Gravity Analysis. Visualize the results, and if needed, filter them out to exclude the warehouses placed in unreachable, or restricted areas. Once you’ve crafted the list of potential warehouses, just insert them into the Network Design App. Here, you will be determining the minimum and maximum warehouse number you want to have in your final solution.
If you’re curious about the impact of including a different number of warehouses in the solution and how it affects costs, that’s where the Scenario Comparison feature comes in. Activate the Save in Platform feature, run as many scenarios as you’d like, and adjust input data based on your specific needs. Save your scenarios on the Log-hub platform with a custom Workspace, including input data, results, a customizable map, and a KPI dashboard immediately after calculation.
Scenario comparison implementation brings 30% improvements in efficient decision-making and risk mitigation.
On the platform, you can generate a scenario comparison with all your saved scenarios, allowing you to compare their elements side by side. Armed with data-backed insights, you’re now prepared to revolutionize your approach to Network Design. Consider optimizing transportation, leveraging the Scenario Comparison feature available in our Transport Category as well. Explore our Playbook titled “How to Handle Rising Transportation Costs?” for guidance on effectively integrating network design and transportation optimization for optimal results.
Going beyond limits
Scenario Comparison is a perfect tool to simulate and compare different strategies. But, the market can sometimes be… well, let’s say stubborn and unpredictable. Optimizing a multilevel network may involve planning for growth in different markets or regions, or simulating risks in your supply chain. For handling such complex projects, consider exploring our Network Design Simulator. It allows you to incorporate even more data into the calculation.
5 Main Benefits of Scenario Comparison in Network Design
In the ever-changing world of supply chain management, weaving together network design and scenario comparison becomes a crucial guide for businesses, offering a practical toolkit to navigate uncertainties and fine-tune operations. As we explore this integration, picture it as a proactive strategy – one that not only spots potential risks and disruptions but also evaluates adaptability and aids in thoughtful decision-making. Now, let’s delve into the concrete outcomes that await, providing practical insights to fortify your supply chain against the unexpected and enhance your decision-making capabilities.
Identify potential risks in different scenarios, enabling proactive risk management strategies.
Assess and analyze potential network design disruptions, and develop robust contingency plans.
STRATEGIC DECISIONS SUPPORT
Gain insights about different scenarios and aspects of the supply chain, providing a foundation for informed decision-making.
Compare potential network design scenarios, and benchmark performance and select strategies aligned with their goals.
Conduct a comprehensive cost-benefit analysis of different network design scenarios, aiding in the selection of the most cost-effective and efficient options.
This represents just a single facet of supply chain optimization, yet it serves as a solid foundation, wouldn’t you agree? If you’re keen on exploring further opportunities in routing optimization, shipment performance, pattern analysis, network design, demand forecasting, or inventory management, delve into our comprehensive Supply Chain Apps portfolio.
Our Team is always open to providing you with a custom demo, covering the topics you wish, and showcasing the possibilities of our solutions based on your use case. Here is where you can book a call with us.