Leveraging technology in supply chain logistica12

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How technology helps in Supply Chain Management

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  • << Need to be changed>>
  • Acquire, transport, produce, distribute to meet the needs of customer.
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  • Demand - location - Quantity - change over timeRisk << on the right sodeInternationalNatural calamitiesWarOil CrisisLocalPoliticalRegulatoryEmployee relationshipDONE
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  • Leveraging technology in supply chain logistica12

    1. 1. Logisticia ’12 18th September 2012 (A certified IBM partner) Ph: +91 98406 18472/ +91 44 4501 8472 Email : optimize@optiriskindia.com Web: http://www.optiriskindia.com © 2010-12 OptiRisk India (P) Ltd, All rights reserved Bala. Padmakumar Director & CEO OptiRisk India
    2. 2. 1. Introduction 2. Supply Chain Network Design 3. Transportation Planning 4. Solution Architecture © 2010-12 OptiRisk India (P) Ltd, All rights reserved 2
    3. 3. Math + Science + Common Sense = Technology Products/Service Meet Need Analytics Math Operational Research © 2010-12 OptiRisk India (P) Ltd, All rights reserved Predictive Analysis Optimization 3
    4. 4. Raw Material Supplier Manufacturing Warehouse Retail Outlet Consumer Acquire, transport, produce, distribute to meet certain need of customers. © 2010-12 OptiRisk India (P) Ltd, All rights reserved 4
    5. 5. help companies achieve More (Benefits) with Less (Resource) © 2010-12 OptiRisk India (P) Ltd, All rights reserved 5
    6. 6. Strategic Long Term 1+ years Supply Chain Network Design Resource Acquisition Tactical Medium Term Monthly / Quarterly Production or Distribution Planning Resource Allocation Operational Short Term Weekly/ Daily Transport Planning and Scheduling Resource Scheduling © 2010-12 OptiRisk India (P) Ltd, All rights reserved 6
    7. 7. 1. Introduction 2. Supply Chain Network Design 3. Transportation Planning 4. Solution Architecture © 2010-12 OptiRisk India (P) Ltd, All rights reserved 7
    8. 8. Identifying the locations and capacity of plants and warehouses to meet the demand, which reduces overall operating expenses from end-to-end. © 2010-12 OptiRisk India (P) Ltd, All rights reserved 8
    9. 9. Demand Centers Location Quantity Change over time Costs Labor Materials Facilities Transport Inventory Taxes and Tariffs Constraints Capacity Local Infrastructure Input Plant and Warehouse Output Numbers Location Capacity Capacity change over time Supply demand mapping What-if Analysis Risks Natural Calamities War Oil Crisis Exchange Rate Regulatory Changes Employee Relationship © 2010-12 OptiRisk India (P) Ltd, All rights reserved 9
    10. 10. Software GUI * MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU MANU *Courtesy : IBM ILOG LogicNet+ © 2010-12 OptiRisk India (P) Ltd, All rights reserved 10 XE
    11. 11. : The client is one of the largest providers of ‘Building Products’ (roofing & interiors) in India. : Due to lack of high-level supply chain visibility, plan and policy, the company resorted to “Ad-hoc”/manual order fulfillment process from different warehouses & plants to agencies, which caused higher overall logistics cost (transport, warehouse, taxes) As the demand was growing fast, the client wanted to identify new warehouse & plant locations and their capacities to optimally meet the future demand at the least cost. Furthermore, they needed to realign the supply linkages so as to maximize plant capacity utilization and rationalize inventory levels across warehouses. The client also wanted to understand the impact of the proposed Goods & Services Tax (GST) on the existing and proposed Supply Chain Network. © 2010-12 OptiRisk India (P) Ltd, All rights reserved 11
    12. 12. What we Delivered OptiRisk developed SCN model suggested reconfiguring order delivery to reduce out-bound transportation cost, overall taxes, and inventory level. In addition, it suggested potential warehouse locations, plants, and their optimal capacity for future growth. At the end, "what-if" analysis is done to study the impact of proposed Goods & Services Tax (GST) on the existing and proposed Supply Chain Network. Key Benefits  17% saving on out-bound transportation cost + taxes  Reduced inventory  Reduced delivery time  Reduced capital requirement  Reduced carbon foot-print  Increased service level  Payback in a couple of months  ROI : 1: 70 times. © 2010-12 OptiRisk India (P) Ltd, All rights reserved 12
    13. 13. Existing Supply Linkage Optimal Supply Linkage © 2010-12 OptiRisk India (P) Ltd, All rights reserved 13
    14. 14. 1. Introduction 2. Supply Chain Network Design 3. Transportation Planning 4. Solution Architecture © 2010-12 OptiRisk India (P) Ltd, All rights reserved 14
    15. 15. Customers Manufacturing Spare Parts Logistics
    16. 16. Key Questions How many trucks to use from the set of fleet and from which carrier? Which shipment option to use for each order? Which customer /vendor should be served by each truck and in what sequence? Are there ways to reduce cost and still maintain/ improve service level? © 2010-12 OptiRisk India (P) Ltd, All rights reserved 16
    17. 17. Should the company buy (or) lease (or) rent trucks? What-if the truck capacities are increased/decreased? What would be the impact of fuel price change to logistics cost? What-if alternate transportation options are used? © 2010-12 OptiRisk India (P) Ltd, All rights reserved 17
    18. 18. Software and What It Does for YOU USE OPTIRISK / IBM SOFTWARE to get Optimized Vehicle Routes Software used custom OR models + CPLEX solver. Software is customized to YOUR CLIENT+BUSINESS needs. Software helps client to achieve : Reduced fleet travel distance / time / cost (5 to 30% saving) Faster Customer-Response-Times (Optional) Extra Carriage Capacity with same fleet (3 to 10% saving) Improved Stakeholder Satisfaction Levels Significant Planning Man-Hours Saving (70% to 90% saving) Helps in long Term Planning © 2010-12 OptiRisk India (P) Ltd, All rights reserved 18
    19. 19. On-Time Delivery Increased Visibility Greater visibility and control Increased Planning Productivity Enabled Employees Reduced Stock-outs Improved Service Level Satisfied Customers Increased Business Optimized Delivery Routes Ease of Use Fewer Fleet requirements Lesser driving distance / time. Lower cost & Investment Increased ROI Visual Displays Ready to print customized reports Visual Performance dash boards for KPI tracking Payback in months Less than six months ROI 1: 30 to 70 times (in 5 years) © 2010-12 OptiRisk India (P) Ltd, All rights reserved 19
    20. 20. Shareholder Value ROI Profit Investment Cost Revenue Less mileage Business (10 to 30% ) # Trucks Service Level . Planning Errors Lead time © 2010-12 OptiRisk India (P) Ltd, All rights reserved (5 to 10%) 20
    21. 21. OptiRisk Route Planner & Scheduler Studio (ORPSS) © 2010-12 OptiRisk India (P) Ltd, All rights reserved 21
    22. 22. The client is one of the multinational fuel distribution companies having wide presence in India. The aim was to develop a automated planning tool which would reduce total cost incurred on out-bound logistics 23%+ reduction in total out-bound delivery transport cost. Total planning time is reduced to minutes. Payback of investment was less than a month Improved service level and increased customer satisfaction. © 2010-12 OptiRisk India (P) Ltd, All rights reserved 22
    23. 23. 1. Introduction 2. Supply Chain Network Design 3. Transportation Planning 4. Solution Architecture © 2010-12 OptiRisk India (P) Ltd, All rights reserved 23
    24. 24. Other RDBMS Database DB2 Top Management . . . . Intranet Web Server Firewall External Router SPSS Server (Optional) Planning & Execution Staffs Optimization Server Dealers Internet External Data Server (Optional) Suppliers © 2010-12 OptiRisk India (P) Ltd, All rights reserved 24
    25. 25. Bala. Padmakumar Ph: +91 98406 18472 / +91 44 4501 8472 Email: optimize@optiriskindia.com Web: http://www.optiriskindia.com/ Asia Pacific, Africa, Australia & Middle East : Europe & America : No 12, Ground Floor, 25th Cross Street Thiruvalluvar Nagar, Thiruvanmiyur, Chennai - 600041, India. © 2010-12 OptiRisk India (P) Ltd, All rights reserved OptiRisk R&D House One Oxford Road, Uxbridge Middlesex, UB9 4DA, United Kingdom. 25

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