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Set objectives for optimization tools

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

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This is an excerpt of the original article. It was written for the November 2016 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2016

Is supply chain management strategic or tactical? Are the best supply chains collaborative? Should the goal be an integrated supply chain or an integrative supply chain? The answers are a mixed bag, according to this month’s contributors.
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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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Sorry, but your login has failed. Please recheck your login information and resubmit. If your subscription has expired, renew here.

From the November 2016 edition of Supply Chain Management Review.

November 2016

Is supply chain management strategic or tactical? Are the best supply chains collaborative? Should the goal be an integrated supply chain or an integrative supply chain? The answers are a mixed bag, according to this…
Browse this issue archive.
Access your online digital edition.
Download a PDF file of the November 2016 issue.

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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