What is Supply Chain Network Design and why is it so beneficial for a transport company?
Supply Chain Network Design (SNDC), also called strategic supply chain planning, is the process of building and modeling a supply chain to determine the best location and optimal size of the facilities to be included in the network with the resources and locations available.
The location of all the supply chain’s facilities such as production sites, warehouses and distribution centres needs to be optimized to increase the efficiency of the whole system.
Companies have to take into account several elements that influence their decisions when it comes to supply chain network design. The most obvious ones are available transportation networks, customers location, cost of labour and site availability.
But the increasing amount of data makes the supply chain network design an increasingly complex thing to do. Transport companies are faced with a challenge of using all of the available data to reduce overall supply chain costs while improving customer satisfaction at the same time.
It is not surprising that the task of creating an efficient supply chain network is getting more difficult as the company grows. The things that could’ve been done manually for a small company, require sophisticated software when we’re talking about a network of hundreds or thousands of sites and connections.
And it’s not only about creating an efficient supply chain network that works for now. The biggest trend of supply chain network design is to create systems that are flexible enough so that they can stay efficient with constantly changing market needs.
A supply chain network that’s not flexible and doesn’t adjust to the changing business requirements can create a lot of problems for a transport company and certainly is a source of raising costs that could’ve been prevented otherwise.
That’s why all of the major supply chain network design software providers focus on the flexibility of their solutions. The designed network should easily adjust to the changing volumes of transported items, as well as changing shipping routes. This year’s difficulties due to the global pandemic showed everyone that transport flexibility is something that no one can disregard.
Benefits of Supply Chain Network Design
But what are the most important benefits of supply chain network design and why should companies invest in sophisticated software that uses available data to help them make these crucial decisions? We can pinpoint to several major advantages of investing in supply chain network design tools:
Lowering costs of the overall supply chain system. Efficiently designed supply chain network can lead to massive savings of all the operations performed by the company. The cost optimization can create savings on all levels – from the detailed, small regional connections, through national systems to global, international chains of supply.
Improved customer satisfaction. A supply chain network that is optimized leads to lower delivery times, which is directly correlated with a better customer service. Well-designed network of production sites and warehouses is also better prepared to efficiently communicate with company’s clients.
Dealing with acquisitions and mergers. Without a well-functioning supply chain network design tool, companies might struggle to quickly and smoothly add newly acquired sites and resources into their systems. This can lead to prolonged, ineffective transition periods, waste of company resources, and slower return on investment.
Preparing for the unexpected. Creating supply chain contingency plans prepares a company for unexpected situations, which can be crucial in times of crisis. Good supply chain network design tool allows company’s management to understand and analyze all the risks and their potential impact on the operations, financial results and service level.
Supporting company growth. The analytic side of supply chain network design software can be crucial to understand the growing potential for the organization. It helps to locate the potential for growth and provides hard data to prepare for expansion plans.
Examples of successful SCND software
As you can see, there are many reasons to invest in SCND tools. And there are plenty of examples of successful supply chain network design software solutions on the market. Many of them offer one-size-fits-all products, while the others push for a more customized approach. Let’s take a look at some of the most well-known SCND software providers available:
Symphonyretailai. Future-ready supply chain platform with true demand forecasting providing a single, unified inventory view to orchestrate and optimize data, people and processes. Used by European retail powerhouses such as Lidl, Carrefour and Auchan.
Llamasoft. The AI-powered enterprise decision platform delivering the science behind faster, smarter decisions across the extended supply chain. One of the solutions that focuses strongly on AI and its impact on operations, strategy, and competition.
Slimstock. Slim4 is Slimstock’s SCND solution for forecasting, demand planning and inventory control, and is built to help getting the right inventory to the right place at the right time. Inventory optimization is at the heart of what they do. Slim4 is used by over 925 companies in more than 40 countries around the world.
John Galt. It’s an American company that provides a wide range of supply chain planning solutions, including ForecastX and Atlas Planning Platform. Their focus on easy implementations and scalable solutions have earned them more than 6000 customers globally and high levels of customer satisfaction.
Siemens Digital Logistics. Part of the Siemens group, Siemens Digital Logistics offers the Supply Chain Suite (SCS). It lets you design, monitor, manage, and understand the entire supply chain. The holistic, data-driven view of the supply chain lets the customers design processes more efficiently and cut costs. Their team consists of 300 experts and their solution serves companies from more than 20 different industries.
Ortec. Ortec delivers solutions and consulting for supply chain planning from strategic to operational level. The ORTEC Supply Chain Design solution delivers answers on various what-if scenarios at a strategic level, including the modeling of inbound flows, production and inventory and outbound delivery. The unique capability of their solution is the ability to model your strategic business decision making requirements.
QAD Precision. QAD Precision provides global trade management, transportation execution and multi carrier shipping software solutions from a single, integrated platform. Their solution helps thousands of carriers, minimize shipping costs, optimize first mile and last mile deliveries, avoid compliance delays, navigate dynamic trading environments and manage millions of shipping transactions every day.
Infor Nexus. Nexus Supply Management allows buyers to share and collaborate with multiple tiers of suppliers on plans, forecasts, and commitments on the network, improving responsiveness to dynamic demand. With faster collaboration and automated alerts, companies can proactively balance supply and demand to improve on-time delivery rates and reduce cycle times while simultaneously reducing inventory costs.
As you can see, a great supply chain network design tool is a must-have for a transport company. It helps to create the most efficient operation schemes, which leads to major cost cuts. It’s also crucial to prepare a company for the constantly changing environment. This way you can minimize the risks, while also getting the most from positive changes and improvements.
There’s no doubt that significant and stable growth for a transport company can’t be achieved without the utilization of the modern, efficient software solutions on all the company’s processes and operations. If you’d like to learn more about how software is changing the world of transport and logistics – feel free to hit us up! Our experts are constantly looking for new ways to help digitize the supply chain industry and they’d love to share their knowledge with you!