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Supply Chain Design for the Automotive Industry

LLamasoft has enabled some of the world’s leading automotive companies to turn common industry challenges into sources of competitive advantage. Modeling technology can be used across all elements of the automotive supply chain, including inbound logistics, facility and manufacturing and outbound logistics.

Examples of how modeling can be used to address automotive supply chain challenges:

Facility selection: Sourcing decisions are some of the most vital ones automotive manufacturers face. This challenge is often referred to as the “off-shore vs. near-shore” or “low-cost vs. local” question. By using modeling technology, companies can make supplier and manufacturing location decisions that are optimized across the entire supply chain, identifying the tradeoffs across all the different cost elements.

Network optimization is often a starting point for companies exploring supply chain design, and can identify major improvements in cost, service and sustainability—often leading to total supply chain savings of 10 percent or more.

Product flow-path optimization: The process of moving products from supply through production and eventually distribution presents myriad choices. The collective set of these choices make up a product’s flow-path through the supply chain. Modeling all the alternative flow options and using smart algorithms to determine the best choices takes the guesswork out of these decisions and provides a useful reference in boardroom discussions.

Inventory optimization: Demand can be highly unpredictable, or very slow-moving, as with service parts fulfillment. LLamasoft inventory optimization recommends end-to-end stocking levels and appropriate ordering behavior after it thoroughly analyzes and automatically classifies the underlying demand patterns, resulting in right-sized inventory levels.

Evaluating new modes, lanes and strategies: Using modeling technology, companies can identify optimal DC-to-customer assignments, determine the ideal mode mix and LTL/FTL combination, create optimal multi-stop delivery or pick-up routes, determine the best utilization of assets, evaluate driver work schedules and even perform service-based greenfield analysis.

Transportation route optimization can be done alone or in conjunction with either supply chain optimization or simulation. Using advanced algorithms, transportation routes are defined to minimize the cost of inbound shipments, while considering realistic cost and constraint structures. This helps answer the questions, “What’s going to happen to our transportation routes when the network design is changed?” or “Could there be a more efficient way to get our product from the supplier to production?”

Download PDF: Supply Chain Design for the Automotive Industry