Supply Chain Design for Manufacturers

We work with complex manufacturing supply chains like these:


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Case example

Electronics Manufacturer Uses Supply Chain Network Optimization to Identify 14 Percent Reduction in Yearly Distribution Cost

A manufacturer of motors and electronics had grown by acquisition and wanted to investigate
whether there were service and cost improvements possible by optimizing the end-to-end supply chain network.

Several cost-saving areas were analyzed using LLamasoft modeling technology, including:

  • Shipment consolidation—could the company shorten distance to reduce service times?
  • Facility sizing—could consolidating distribution centers and regional distribution strategy allow for faster service times?
  • Freight spend—is there opportunity to reduce overall spend by consolidating shipments to reduce LTL spend?

Model results showed the manufacturer could reduce annual distribution cost by 14 percent just by optimizing distribution strategy, while significantly reducing service/delivery times.

Supply Chain Design for Manufacturers

Why Supply Chain Design?

Manufacturing and production supply chains are an increasingly complex and volatile
network that often stretch across continents and support numerous market segments.
Changes in demand, shifts in commodity prices, supply disruptions, variability in
transportation, natural disasters, geopolitical change and regulatory issues all impact the
flow of goods to market. You have hundreds of supply chain ‘what-if’ questions to answer,
and need a means to get fast, data-backed answers.

The LLamasoft supply chain design platform enables manufacturers to model, optimize
and simulate supply chain network operations, manufacturing capacity, inventory strategy
and transportation routes, leading to major improvements in cost, service, sustainability
and risk mitigation.

You need a quick, low-risk way to test inventory optimization results to understand the potential impact on service levels. LLamasoft Supply Chain Guru inventory optimization enables you to model supply chain network operations, then run and test inventory policy experiments and optimization scenarios to build dependable, repeatable inventory optimization processes.

Supply Chain Modeling Solutions for Manufacturing Industry Challenges

Inventory Strategy
Multi-echelon inventory optimization enables manufacturers to create accurate models
across all echelons of the supply chain, with a full inventory plan that includes optimal
safety stock, cycle stock and pre-build inventory, as well as strategies for promotional
products. You can also use supply chain simulation to predict the service rates, inventory
levels and site capacity constraints for any potential supply chain structure.

Production Capacity Planning: Utilize Existing Capacity for Lowest Total Cost
Network optimization can also perform more detailed production modeling to right-size
the production footprint as well as to optimize production capacities—globally, or with
drill-down detail for individual facilities. Models can incorporate all production-related
details, including production lines, labor resources, production processes within the plant
and for each line, bills of material and converting semi-finished goods to finished goods,
throughput rates, costs and yields.


Manufacturing/Production Footprint Optimization: Where and How Much Should We Make?
Often times demand for products shifts over time to new regions or different
quantities, and suppliers and cost structures change as well. As these changes
occur, the production footprint should also change to maximize and balance
available production capacity. This may mean investing in additional capacity
in certain locations, moving production capacity to other facilities within the
network or using third-party manufacturers. Modeling the production footprint
and analyzing varying scenarios helps a company balance existing capacity with
the investment required to add additional production.


Using Cost-to-Serve Optimization for Pricing Strategies and Margin Analysis
Cost-to-serve is the analysis and quantification of all supply chain activities and
costs incurred to fulfill a customer’s product demand. This is accomplished by
modeling all the supply chain activities in the network, and properly allocating
fixed and variable costs. An accurate cost-to-serve model enables informed
decision making by answering questions such as, ‘Is this customer or customer
segment profitable, given the supply chain configuration and costs?’ or ‘Does it
make good business sense to continue to stock and distribute this product?’

Transportation Route Optimization
Using modeling technology, businesses can identify alternate supply chain
network configurations using network optimization and then model the precise
transportation costs of each, or do stand-alone route optimization. This process
can help businesses 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.

Why Leading Global Manufacturers Choose LLamasoft
Partnering with LLamasoft ensures you’ll have more than just great software
and technical support, but a growing community of supply chain design
practitioners to guide you and collaborate with you as you progress.

  • Mixed Mode Solving: The only network design application that integrates network, transportation, capacity, inventory, and simulation engines into a single tool to help manufacturers analyze and optimize the entire end-to-end supply chain
  • Automatic Scenario Generation: Powerful multiple scenario analysis within a single model database to adjust any combination of cost or model elements to do sensitivity analysis, simulate impact on the supply chain over time, and make the optimal decisions
  • Cloud-Based Solutions: Access to industry benchmark data and a fully-integrated SaaS web application that utilizes best-in-class hardware to maximize data processing and collaboration
  • Product Development: LLamasoft invests greater than 30 percent of annual revenue in research and has the largest dedicated development staff of both software developers and operations research scientists in the industry
  • Solutions Services: From hourly support to fully outsourced project delivery, LLamasoft offers customers a variety of engagement options. More than 100 solutions consultants worldwide with experience in more than 1,500 supply chain design projects
  • Customer Success Program: LLamasoft offers global support, coaching and training, monthly webinars and annual and regional user meetings to help you harness supply chain modeling for transformative business benefits

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