SCDigest Editorial Staff

SCDigest Says:

Simulation tools allow companies to take a look at a range of potential outcomes based on the potential vagaries of supply, demand and other factors. What do you say? Send us your comments here

Among the hottest categories of supply chain software over the past few years has been supply chain network optimization and inventory optimization applications. In a nutshell, network optimization helps companies design the optimal physical network and also to make increasingly granular supply chain decisions (e.g., the best locations to build a new product, or the best sourcing locations considering total supply chain costs).

Traditionally, optimizing inventory levels across the supply chain was not handled by supply chain network design tools. So, the newer category of supply chain inventory optimization was developed to solve that question, especially across multi-level (echelon) supply chains.

Finally, there is an increasing interest in simulating supply chain performance, to better understanding potential trade-offs and risk factors. Simulation tools allow companies to take a look at a range of potential outcomes based on the potential vagaries of supply, demand and other factors.

(Supply Chain Trends and Issues Article - Continued Below)

(Supply Chain Trends and Issues Article - Continued)

The table below was taken from last year’s Supply Chain Digest Letter on Network Optimization. It summarizes each of these three categories of software, and how each is used.

An electronic copy of the Letter, plus a wide range of other Supply Chain Network Planning and Optimization system information, is available at our Supply Chain Network Planning Resources Page.

Do you see supply chain network design, inventory optimization tools, and supply chain simulation tools coming together? Should it have happened sooner? Is there still work to do? Let us know your thoughts at the Feedback button below.