Supply chain network design is no longer solely about cost reduction and capital liberation. It now encompasses a broader range of considerations, including sustainability, inventory optimization, and investment decisions. Companies are increasingly seeking to strike a balance between costs, service levels, risks, and environmental impact. This shift in focus is driven by a variety of factors, including the desire to manufacture closer to markets, mitigate the impacts of potential disasters, and increase supply chain resilience.
The Role of Spreadsheets in Supply Chain Network Design
While many companies rely on spreadsheets for supply chain network design, this approach can be labor-intensive and may overlook potential improvements for complex, dynamic supply chains. Sophisticated tools, such as those offered by Aimms, can provide a more efficient and comprehensive solution.
A Six-Step Approach to Supply Chain Network Design
Aimms proposes a six-step approach to supply chain network design, encompassing analysis, data collection and preparation, model building, scenario analysis, result evaluation, and supply chain adaptation. Many companies struggle with the data collection and preparation stage, but Aimms advises keeping it simple and focusing on strategic questions.
The Importance of Team Composition
The success of supply chain network design largely depends on the team’s composition. Essential roles include a project leader with a thorough understanding of the business, a modeller, and a data analyst. If a company can assemble the right team, it is recommended to conduct supply chain network design in-house for maximum flexibility and responsiveness to market changes.
In-House vs. Outsourcing
If a company lacks the necessary competencies, outsourcing is an option. This could involve outsourcing the entire process, hiring a consulting firm for the initial project while training an in-house team, or outsourcing only data preparation and model building while conducting scenario analysis in-house.
The Need for an Implementation Manager and Operational Experts
In addition to the network design team, an implementation manager and operational experts are crucial for putting recommendations into practice and providing real-world knowledge and validation.
Centralized vs. Decentralized Set-Up
The choice between a centralized or decentralized set-up depends on the company’s specific needs. A centralized team offers deeper expertise in supply chain modeling, while a decentralized team provides more real-world knowledge but may lack the flexibility to tackle multiple issues simultaneously.
The success of supply chain network design lies in the balance of skills, tools, and strategy. By considering costs, service levels, risks, and environmental impact, and with the right team composition and approach, companies can navigate the complexities of supply chain network design effectively. Whether choosing in-house or outsourcing, the key is to prioritize adaptability and responsiveness in today’s ever-evolving global landscape.
