Case Study

Large Global Manufacturer Builds Supply Chain Modeling Team for Worldwide Asset Optimization

Highlights:

Objective

Create living digital supply chain models to optimize company’s assets for highest profit margin

Solutions

Distribution Network Optimization

S&OP

Data Management

Results

Modeling enables short and medium-term capacity planning and balancing of cost across the global product network

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Large Global Manufacturer Builds Supply Chain Modeling Team for Worldwide Asset Optimization

Challenge

A large global manufacturer needed a way to create an end-to-end view of its supply chain and product lines in order to better manage capacity within business units and identify opportunities to leverage economies of scale across product lines for shared logistics assets such as rail cars, loading zones and wharfs.

Solution

The company chose LLamasoft Supply Chain Guru as its supply chain design platform and has established a center of excellence (COE) for global supply chain modeling and analysis. While the COE operates independently, LLamasoft has an ongoing active role in analyst training and best-practices support. Among the many supply chain design use cases are:

  • Promotion Planning and Sales and Operations Planning (S&OP): The company built supply chain models for each of its business units and has 10 active models in use for balancing plant capacity and cost, tax and duties optimization and product flow-path optimization. The model structure is refreshed annually and used continuously throughout the year with regular updates for changing raw material costs.
  • Long-term Capacity Planning: Models are also used to analyze long-term product and site capacities. While most models are built by product line, many of the company’s products share logistics assets such as docks, wharfs, rail cars and loading zones. In order to identify optimal use case for these shared assets, the company uses global models that combine capacity information for different business units. These three to five-year outlook models also highlight potential future capacity problems so that the company knows when and where additional capacity should be added.
  • Data Management: This continuous design process requires the most current supply chain data, ensuring that design models are a living representation of the supply chain. The company uses LLamasoft Data Guru to connect analysts directly to the systems that run the enterprise and build repeatable data transformation workflows that refresh model data. Integration with Supply Chain Guru allows analysts to automatically run supply chain models.
  • Business and Planner Usage: While models are built and maintained by the company’s supply chain design COE, the benefit of supply chain design technology is shared with business users across the organization. Supply chain planners and other stakeholders are able to consume model outputs in graphical reports and dashboards, helping ensure consistency of information for better decision support.

Results

Today, the company is actively using supply chain models for:

  • Short to long-term capacity planning
  • Balancing cost/cost allocation across global production network
  • Optimizing for tax and duties with end-to-end view of costs including not only production and logistics but cross-border pricing and tax structures as well
  • Optimizing assets in order to deliver as much margin as possible

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