Video

SAPinsider Chats with LLamasoft’s Toby Brzoznowski on the Importance of Supply Chain Design

Video Transcription

Ken:
Good afternoon. This is Ken Murphy with SAPInsider and I’m here at the SAPInsider SCM 2013 event and I’m pleased to be joined today with Toby Brzoznowski, he’s the executive VP and co-founder of LLmasoft. Toby, thanks for being with us today.

Toby:
Thanks for having me Ken.

Ken:
Can you start with an overview of LLamasoft; describe the company and the business and what you do.

Toby:
Absolutely. LLamasoft is focused on supply chain design. It sits alongside of planning and execution. Basically helps companies model their end-to-end supply chain, come up with new ideas and new strategies for improving their business.

Ken:
Okay. You’ll have a presentation here where you will focus on the historical factors in supply chain design, just wondering what are some of the mistakes that companies make in designing their supply chain and what should companies be aware of?

Toby:
Supply chain has evolved over time for most people. You make a decision on adding a new product to the mix. Where do I make it, where do I have capacity? Or as I’m making sourcing decisions I try to figure out where can I get the best deal today. Or as I’m bidding out my transportation, I’m trying to figure out what’s the right cost that I can get, but you never really think about it from an end-to-end supply chain perspective. If you had done this differently and actually engineered the entire supply chain along the way, thinking about the total cost and the total landing cost or the total cost to serve each of your products to each of the markets, you’d design things very differently and a lot of times where I might make a decision that says, “I need to have the lowest possible inventory.”

That will be great as long as you don’t have other factors that might say, “But if I had 3 times the inventory, I could reduce my transportation costs and the overall end-to-end benefit to the company is a lot far superior.”

Ken:
Okay. What about a difference between say supply chain design versus supply chain planning?

Toby:
It’s a good question. Planning and execution, basically, what you have today, the planning and execution systems help you automate those things. I want to become more efficient with my transportation network. I’m going to implement top of the market TMS system. I want to automate and streamline and make the most efficient possible warehouse operations, I’ve got a WMS system for that. My production planning system is going to automate and streamline the production system for the supply chain that I have today. What if the supply chain that I have today or the structure that I have or the design isn’t correct? That’s what we are looking at. Is trying to figure out, how do you push the bar and how do you make something even better?

Design is using all of that historical information as a starting point to give you the ‘what if’ capabilities to really figure out what’s the next level that you can get to.

Ken:
Today obviously everybody is speaking about mobility. I’m just wondering how transformative mobility is in the supply chain space and maybe there is examples of ways that companies can leverage mobility.

Toby:
Now that a lot of companies have kind of created these supply chain design centers of excellence and they have started to use modelling as part of their everyday business. These models have historically been operated by engineers, have been operated by analysts, but they haven’t been accessible on an everyday basis to the executives. This is where I think the mobile is coming in. You can take these models, but then make them portable. Put them in the hands of the people in the boardrooms, people in the SNLP decision centers, and give them the ability to use those models to do really quick ‘what if analysis.’ If I try this strategy, how is that going to impact my service? How is that going to impact my cost?

If I really were to suddenly change the focus and go to this new market or demand changes, how is that going to affect my business? The mobile platform is a great place to leverage those models, but give access to people that normally wouldn’t have access to them.

Ken:
Lastly, if you were to give one piece of advice for companies who are looking to really optimize their supply chain in today’s environment, what do you think that would be?

Toby:
The main thing is don’t be focused on optimizing a section or a silo of the business. Don’t optimize your procurement. Don’t optimize your inventory or operation. Don’t optimize your transportation. Optimize your entire operations from a perspective of what’s the goal for the company and the right balance between service and cost and sustainability and risk. When you do that, individual numbers may change, but if you are not incented by individual division goals, you are incented by the overall end-to-end supply chain goal, that’s where you make the biggest benefit.

Ken:
Great. We’ve been talking today with Toby Brzoznowski who is the executive VP and co-founder of LLamasoft here at the SCM 2013 event. Toby, thank you again for joining us.

Toby:
Thanks for having me.

Ready to learn more? Click to request a live demo with the LLamasoft team.

Request A Demo