Simulation offers supply chain optimisation
Simulation offers supply chain optimisation

What does supply chain optimisation really mean?

It is not unusual for a supply chain to represent up to 75% of your organisations total cost. The success of your business is attributed to controlling these costs to ensure that strategic initiatives can be achieved, driving profitability and growth. As organisation’s have been able to achieve significant improvements through productivity and efficiency gains by leveraging supply chain technologies through integration, greater scope remains to create a more effective supply chain model. Simulation offers this opportunity as a risk-free alternative to traditional analytical methods.

Simulation offers supply chain optimisation

Optimisation is a term that is discussed quite frequently within the supply chain sector, though its full potential is still challenging to realise. Organisations have invested quite heavily in supply chain technology platforms such as ERP systems, warehouse management systems and CRM solutions over the last few decades. To date, many organisations have made considerable gains, though it would be fair to say that the real return on investment has been achieved through efficiency improvements, most organisations are still to recoup their total investment. Although the quality of the arcitecture has also enabled these technology systems to collaborate more seamlessly by managing and exchanging data, there remains much more opportunity for further improvements through the applcation of simulation.   

Why simulate your supply chain?

Simulation offers supply chain optimisation as it has the ability to predict outcomes by using a complex set of variables that drive the supply chain simulation model to output meaningful and realistic scenarios. Each scenario is delivering your business a different value proposition that enables your supply chain to be more responsive to variability. Your supply chain model changes to manage this variability more effectively. Any system that can be defined using equations can effectively be simulated. In a dynamic simulation, behaviour changes are impacted by inputs over time, these changes are analysed and further improved upon by changing the simulation model. The objective is to minimise inefficiencies throughout the entire supply chain.

Benefits of supply chain simulation

  1. Real time operational decision making capability
  2. Ability to change your supply chain model to support variability
  3. Dynamic changes resource levels to support demand patterns
  4. Visual representation provides greater awareness of your supply chain
  5. Identifies the real cost to serve of a supply chain model
  6. Change management is improved through virtualisation