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About the Author

Toby Brzoznowski

Executive Vice President
LLamasoft, Inc.


Toby Brzoznowski is the Executive Vice President of LLamasoft, Inc. Toby has over 20 years of experience in building and growing businesses, focused on process improvement and analysis technologies. His expertise has been applied to bringing new and advanced technologies into mainstream use at global Fortune 500 businesses. In the last decade, Toby has been involved in the start-up of three Michigan-based technology companies and is a frequent presenter at supply chain and strategic sourcing events.

For more information, please visit www.llamasoft.com

Supply Chain Comment

By Toby Brzoznowski, Executive Vice President, LLamasoft, Inc.

April 4, 2013



Learn to Love Big Models and Big Data for Enterprise-Scale Optimization

 

Detailed Models Can Lead to More Informed and Risk-Tested Supply Chain Decisions and Ultimately a Sustainable Competitive Advantage



Supply chain executives have yearned for true end-to-end supply chain analytics for many years. But this level of detailed analysis has always seemed just beyond technical reach. Recently, new technologies like cloud computing and in-memory data have opened the door to an extremely valuable new era of enterprise-scale optimization. Companies are now able to harness the previously intimidating “big data” to model, analyze and optimize their end-to-end supply chain operations.

Brzoznowski Says:

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Combine cloud solving with a centralized enterprise modeling platform that lets all modelers share information and models and you create a level of supply chain design capability never possible before.
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One technology enabling this expanded scope of supply chain design is cloud technology. By removing the barriers that have traditionally limited supply chain design to a desktop application used by a single modeler, solving of models in the cloud is revolutionizing supply chain design. Now companies can evaluate more complicated models and multiple scenarios—and do it in a fraction of the time, without expanding IT infrastructure expense. Combine cloud solving with a centralized enterprise modeling platform that lets all modelers share information and models and you create a level of supply chain design capability never possible before.

Using these technologies, companies can now create realistic models of their entire enterprise at the SKU and individual transaction level of detail. You can imagine the kind of doors this opens—it enables more accurate and informed decisions on a variety of topics such as near-shoring/off-shoring, omni-channel distribution, mergers and acquisitions, production footprint and risk strategy.

Just creating a baseline digital model of the supply chain is potentially eye-opening and powerful for many companies. This digital model includes everything from where supplies originate all the way through manufacturing and distribution and out to the point of demand. Modeling the operation as it exists today can reveal significant opportunities for cost savings just by eliminating inefficiencies. Then, by utilizing continuous scenario analysis, companies are able to determine the real cost and service effect with questions like:

 

  • What sources give me my lowest cost-to-serve?   
  • How should my supply chain be structured if demand increases by 10, 25 or 50 percent? 
  • Where should I stock inventory and in what quantities to achieve 98 percent fill rates at the lowest cost?  
  • What mode of transportation and which carriers should be used for each product?  
  • At what sourcing cost is my supply chain no longer optimal?
  • The list goes on. . .


In supporting hundreds of global companies in their supply chain design and modeling activities, we at LLamasoft have noticed our customers’ supply chain models getting both larger in size and more granular in detail (i.e. the number of transactions, sites, SKUs, shipments, production processes, decision options, etc.). These companies are leveraging this detail to achieve breakthrough performance with lower risk of failure because the models more accurately represent actual supply chain behavior.

Big data can seem overwhelming, but it’s important to remember that it can be used to create detailed models of the corporate supply chain, and these detailed models, when used correctly, can lead to more informed and risk-tested supply chain decisions, and ultimately a sustainable competitive advantage.

Agree or Disagree with Our Expert's Perspective? Let Us Know Your Thoughts at the Feedback section below.

Recent Feedback

Good article...and I agree with Toby's insights.   I am supporting an airlift cargo forecasting project now for the Department of Defense - and getting all parties to agree on the source and grouping of data remains a grueling challenge.


Jim Phelps
Vice President
Aegis Strategies
Apr, 05 2013
 
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