What is Supply Chain Network Optimization?

Supply chain management has become one of the most important focus areas in today’s demand drive world. It encompasses planning and management of all activities involved in sourcing, production, warehousing and distribution of products.. It is easy to underestimate the complexity of global supply chains. Yet the growth of global markets, increasing customer expectations, rising costs, and more intense and diverse competitive pressures are driving the development of new supply chain strategies and intricate network designs. Many companies enjoy significant business gain in lieu of unique ways in which they have designed their supply chain and how they react towards changes in the internal and external environment.

To meet the ever-growing need for current understanding of the supply chain, more companies are performing supply chain network studies. Supply chain network optimization is the science – and art – of designing a holistic, strategic and quantitative view of an organization’s end-to-end supply chain.

How can a supply chain network optimization help your company?

By conducting a thorough analysis of their network, companies will be armed with the necessary quantitative metrics to make informed, strategic decisions regarding

Plant Location and Capacity, Distribution Location, What to produce and where, Inventory levels, Pricing Levels etc

A supply chain network optimization empowers companies to compare the current state of their supply chains to multiple “what-if” scenarios thereby helping them to  develop concise, strategic plans and goals based on quantitative  metrics.

Many components of a supply chain network may seem intuitive at the micro level, but when considered as a part of the whole, those pieces may not be the ones driving the overall direction and costs. Only by conducting a Supply Chain Network Optimization project will those individual mechanisms, their links and influences be measured and understood collectively. Companies are increasingly focusing on cost perspective along with service requirements during planning & design of supply chain network. The initiative goes in a way to find the most cost optimized way in meeting key objectives for a good supply chain operation.

 

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