Executive Briefings

Elements of Supply Chain Design

A number of macro-economic developments, such as the expansion of the Panama Canal, are driving changes in supply chain design, says John Trestrail, supply chain solutions manager at LLamasoft. "Supply chain managers are trying to understand the impact of the canal's expansion on cargo flows, especially from Asia to the East Coast," he says.

Another development impacting supply chain design is the growth of big data sets, which companies are able to mine and analyze in ways they never could before. "Companies have huge amounts of data internally from their ERP system, from other enterprise systems and from third-party vendors. They are now leveraging that data to make better decisions, including better supply chain design," he says.

"In the past, companies would do a network optimization to analyze the structure of the supply chain. Now they are doing that hand-in-hand with inventory optimization, with vehicle routing for multi-stop truck runs and with simulations that show how their supply chain would be impacted by low-probability, high-impact events," Trestrail says.

Going forward, supply chain design will become much more granular, he predicts. "We will be looking at designing networks at the SKU level rather than the product family level," he says. Design analyses also will occur with greater frequency than today. "Companies typically have done a supply chain design project every one to three years," he says. "The trend is to increase this frequency and to look at tactical as well as strategic decisions." One by-product of this trend is that companies are outsourcing fewer supply chain design activities and doing more in house. "Our customers are building up their internal teams of supply chain design experts and leveraging their in-house technology," Trestrail says.

To view video in its entirely, click here


Keywords: supply chain solutions, logistics IT solutions, supply chain systems

Another development impacting supply chain design is the growth of big data sets, which companies are able to mine and analyze in ways they never could before. "Companies have huge amounts of data internally from their ERP system, from other enterprise systems and from third-party vendors. They are now leveraging that data to make better decisions, including better supply chain design," he says.

"In the past, companies would do a network optimization to analyze the structure of the supply chain. Now they are doing that hand-in-hand with inventory optimization, with vehicle routing for multi-stop truck runs and with simulations that show how their supply chain would be impacted by low-probability, high-impact events," Trestrail says.

Going forward, supply chain design will become much more granular, he predicts. "We will be looking at designing networks at the SKU level rather than the product family level," he says. Design analyses also will occur with greater frequency than today. "Companies typically have done a supply chain design project every one to three years," he says. "The trend is to increase this frequency and to look at tactical as well as strategic decisions." One by-product of this trend is that companies are outsourcing fewer supply chain design activities and doing more in house. "Our customers are building up their internal teams of supply chain design experts and leveraging their in-house technology," Trestrail says.

To view video in its entirely, click here


Keywords: supply chain solutions, logistics IT solutions, supply chain systems