Challenge:: Supply Chain Optimization

CHALLENGE:
For more than 160 years, Procter & Gamble has developed and marketed
innovative consumer goods. Today, P&G’s portfolio of 22 billion-dollar brands
and market capitalization of nearly $200 billion has made it one of the world’s
most valuable companies.
Like their competitors, P&G sees their presence in markets such as South
East Asia as an important contributor to the company’s goal of consistent and
continued growth. But the opportunities the market offers came with a
profound challenge – with the product portfolio presented in outlets across the
country, the company followed a network design and inventory policy that
could not support current demand and was not efficient enough. This, in turn,
could lead to negative financial implications and, in the perspective, have an
adverse effect on all regional operations.
The company wanted

to review its logistics network and inventory policies and perform supply chain
optimization. Seeing opportunities in digital distribution network optimization,
they tasked consultants from the SupChainEra company with network design
and auditing. The advisors from SupChainEra would create a computer model
of the existing network and test business assumptions in a risk-free
environment to create a plan for implementation of best-performing strategies
in real life.
SOLUTION:
SupChainEra’s consulting team chose anyLogistix supply chain design
software to bring their network optimization models to life. In addition to
the dynamic simulation capabilities that would allow them to measure every
part of a supply chain’s performance, the software’s powerful experiments
would reduce the time it took to design and test new policies.
The baseline model took advantage of anyLogistix’s support for detailed,
large-scale network simulations. All told, it accounted for all 20,000 sites
within the modeled region of South East Asia where P&G purchases,
manufactures and markets goods. anyLogistix naturally fits for creating large-
scale network models, and the consultants benefited from this opportunity.
In the baseline model, goods could be transported from P&G factories to its
distribution centers (1st leg, fixed delivery cost), between distribution centers,
and from distribution centers to end customers (2st leg, distance-based
costs). To make the baseline network design more efficient, the consultants
applied supply chain network optimization capabilities, available with
anyLogistix software. Tracking metrics included:
 Estimated lead time (ELT) by products and orders

 Number of vehicles used for transportation
 Vehicle utilization rates
 Inventory level per DC
When looking at shipment costs, it turned out that they were much higher
when transporting goods between DCs. The consultants analyzed the model
output statistics and proposed converting two of the most heavily used DCs
into logistics hubs. This way, instead of being shipped from one DC directly to
the other, goods would be collected in the hubs and then transported to other
DCs. This would entail lower costs and more efficient supply chain network
operations.
Supply chain design is a continuous process. New challenges and
opportunities mean business is always changing and success requires quick
and informed decision making. A supply chain digital twin made with
anyLogistix can help provide the necessary analysis and insight.
Supply chain network design software can help when growing a network and
when optimizing those already in place. Here are the two key areas of
application.
SUPPLY CHAIN DESIGN

New facilities, including distribution centers, warehouses, and production
sites, need optimal locations. The solution can be straightforward, driven by
factors such as the cost of labor, transportation networks, site availability and
customer locations. However, decision making often becomes complex and
unclear as more factors are considered. The challenge of finding the number
of required sites, their capacities, and the right locations quickly increases as
the reality of balancing costs, service levels, and other constraints are
captured.
SUPPLY CHAIN OPTIMIZATION

Even though a supply chain has helped drive success in the past, how can its
current and future performance be guaranteed? Informed decision making is
required to choose the appropriate course of action and maintain an optimal
configuration. Increasing digitization is delivering greater supply chain visibility
more quickly, and disruptive change is challenging traditional business
models. Overall, to stay competitive, it has never been more important to have
a clear understanding of your supply chain and its workings.
anyLogistix supply chain software provides a suite of tools that enable
informed decision making for supply chain design and optimization, including
a demographic database. This helps locate new sites, depending on the
population and customers' demand.
Supply chain problems and opportunities can be met in many ways, the
difficulty is selecting the best course of action. In some cases, it is possible for
the problem to be an apparent lack of options, or opportunities hidden in
complexity.
Whether the options are too many or too few, both action and inaction can
result in lost profit. anyLogistix helps remove this risk. Supply chain analytics,
visualization and simulation help deliver clarity when making supply chain
design and optimization decisions.

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CHALLENGE:

The company wanted

 Estimated lead time (ELT) by products and orders

SUPPLY CHAIN DESIGN

SUPPLY CHAIN OPTIMIZATION

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