2. What is SOAP Simulation ?
It is a supply-chain simulation tool allowing back testing of
what if scenarios.
One question our system is built to answer:
“What if my future supply-chain distribution strategy was
implemented last year ?”
Run numerous „What if‟ scenarios and get detailed financial
and operational performance reports.
3. Distribution network redesign
A distribution network strategy defines how we move goods to
market, from the suppliers to the customers thru the
company supply-chain network, therefore it need to
constantly adapt to external and internal constraints.
Redesign main drivers
Mergers and acquisitions
Business growth or downsizing
Competitive pressure to increase costs efficiency
Change in customer service requirements
New market opportunities
Change in supply or customer base
Increase in fuel / transportation costs
Change in local logistics optimization (pack, size, EOQ…)
4. Distribution network redesign
What are the most encountered question when redesigning a
supply-chain network strategy?
What is our best sourcing What is our best distribution What is our best
strategy? strategy? transportation strategy?
• Should we do direct to store • How many distribution centers?
distribution? (Per family, What size? • For which suppliers should we
category, velocity...) • Where are the best locations? use an integrated inbound
• Should we source to each • which type of product (family, freight?
distribution center or thru a category, velocity, sourcing ...) • Which transportation modes
primary location? • What market should be served by and partners should we use
• When should we do supplier each distribution center? from each site?
cross-docking replenishment? • What is the optimum stocking • How can we consolidate and
• What is the financial impact strategy? optimize our freight?
of the different replenishment • How can we optimize global • What are the best routes for
strategy (Full truck, minimum distribution costs? my shipments
quantity, JIT, Frequency, • How do we reduce working • What strategies can we use
scheduled...)? capital in our distribution network? to minimize carbon footprint
5. SOAP back testing methodology
phase 1 – business assessment
Model Model Detailed
Business Data
baseline alternate result
assessment gathering
scenario scenario analysis
Business assessment:
Identify supply-chain redesign project‟s scope
Identify current business model
Identify key business issues and main drivers
Identify company strategic vision.
6. SOAP back testing methodology
phase 2 – data gathering
Model Model Detailed
Business Data
baseline alternate result
assessment gathering
scenario scenario analysis
Data gathering
Develop data gathering requirements
◦ Master data file: Item, Vendor, Customer/Site
◦ Inventory file: inventory count, Movements
◦ Marketing file: Promos, assortments (new items, end of life …)
◦ Tags
Assessment of data availability and data accuracy.
Develop test files, data control, validation
7. SOAP back testing methodology
phase 3 – Model baseline scenario
Model Model Detailed
Business Data
baseline alternate result
assessment gathering
scenario scenario analysis
Model baseline scenario
Construct and simulate baseline scenario, this is the
representation of the current supply-chain business model
Calibrate baseline model to actual spending, this is a major task
that allow thru a „AS IS‟ simulation run to validate the
correctness of the data and the correctness of the current
business model design
8. SOAP back testing methodology
phase 4 – Model alternate scenario
Model Model Detailed
Business Data
baseline alternate result
assessment gathering
scenario scenario analysis
Model alternate scenario
Define main alternative group of scenarios to evaluate
Construct and simulate alternative scenarios
Compare alternative scenarios simulation results
9. SOAP back testing methodology
phase 5 – Detailed results analysis
Model Model Detailed
Business Data
baseline alternate result
assessment gathering
scenario scenario analysis
Detailed results analysis
For each group of scenarios provide detailed financial report
For each group of scenarios provide detailed operational report
