Page 3 - Logistics News May 2016

SC design

The ROI of supply chain design
is significant

The modern supply chain is an increasingly complex and volatile network that often
stretches across continents and supports numerous market segments. With this complexity,

the impacts of change are harder to determine and the risks involved with being
unprepared increase.

Acknowledgement to LLamasoft

Changes in demand, shifts in commodity prices,
supply disruptions, variability in transportation
availability, natural disasters, geopolitical change
and regulatory issues all impact the flow of goods
to market.

Businesses have hundreds of supply chain
‘what-if’ questions to answer, and need a means
to get fast, data-backed answers. Supply chain
design is the practice of using living, digital
models of the end-to-end supply chain to guide
continuous improvement and innovation, and
provide a single, enterprise-wide platform for
decision support.

Modeling is now a must-have capability
for businesses to keep up with the pace of
change and to sustain a competitive advantage
by significantly improving in the areas of cost,
service and risk. Leaders have created centres of
excellence and put in place an integrated supply
chain design platform and business processes
to rapidly and accurately answer tough supply
chain what-if questions and generate effective
and clear recommendations for decision support.

A supply chain modeling platform can
enable businesses around the world to uncover
significant supply chain cost savings. Companies
that have centres of excellence identify
core savings along with impressive improvements
in both time and cost efficiency. They have
seen an increase in cost efficiency, and
savings on inventory, production, transportation
and fixed costs, and on total supply chain
variable costs.

To use supply chain design as a competitive
weapon and see significant savings, supply chain
design should see across the entire business to
optimise the true end-to-end supply chain and not
just a specific business unit or business function.
Supply chain design providers can pool talent
and technology to provide analysis capabilities
to the entire organisation. This organisational
structure can help the group avoid the pitfalls of
local bias or politics and remain focused on data-
driven business solutions. A study around supply
chain design centres of excellence, conducted in

2 May 2016 • Logistics News