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Set objectives for optimization tools

To get the most out of supply chain optimization, think beyond cost savings.

By ·

Complex supply chains have made it harder for organizations to effectively track their supply chain performance and make determinations about how best to streamline their operations. To address this problem, vendors have developed a variety of supply chain optimization tools that consider multiple factors to determine the best configurations of resources.

Two such systems, network planning and optimization tools and distribution requirements planning (DRP) software, offer the potential to increase supply chain efficiency while reducing costs. Network planning and optimization tools aid in the alignment of strategies across the supply chain—from procurement to shipping. These systems enable organizations to determine the effects of potential market changes and better implement appropriate responses to those changes. DRP software packages focus on the distribution and transportation aspect of the supply chain. They aim to help organizations determine the ideal locations and quantities of goods that will best meet demand.

According to APQC’s Open Standards Benchmarking data in logistics, each of these systems has been implemented to a modest degree among organizations. As shown in Figure 1, less than half of responding organizations have implemented network planning and optimization tools, but about a quarter of those organizations plan to implement these systems at some point in the future. Organizations responded similarly when asked whether they had adopted DRP software.

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By ·
Download Article PDF

Complex supply chains have made it harder for organizations to effectively track their supply chain performance and make determinations about how best to streamline their operations. To address this problem, vendors have developed a variety of supply chain optimization tools that consider multiple factors to determine the best configurations of resources.

Two such systems, network planning and optimization tools and distribution requirements planning (DRP) software, offer the potential to increase supply chain efficiency while reducing costs. Network planning and optimization tools aid in the alignment of strategies across the supply chain—from procurement to shipping. These systems enable organizations to determine the effects of potential market changes and better implement appropriate responses to those changes. DRP software packages focus on the distribution and transportation aspect of the supply chain. They aim to help organizations determine the ideal locations and quantities of goods that will best meet demand.

According to APQC’s Open Standards Benchmarking data in logistics, each of these systems has been implemented to a modest degree among organizations. As shown in Figure 1, less than half of responding organizations have implemented network planning and optimization tools, but about a quarter of those organizations plan to implement these systems at some point in the future. Organizations responded similarly when asked whether they had adopted DRP software.

SUBSCRIBERS: Click here to download PDF of the full article.

 


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Article Topics

APQC · Optimization · All Topics
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