The driving force behind most successful businesses these days is data. Gathering, assessing, and understanding critical metrics inform better decisions and make it easier to run a smooth operation. This goes double when it comes to making supply chain decisions. The supply chain is fragile and links can be easily broken. That’s why it’s so essential to optimize and make and enhance the efficiency of your own. This can be readily accomplished with supply chain design and demand modeling. In this article, we explore the concept and provide a few tips for better supply chain design. Check it out below.
Table of Contents
What Is Supply Chain Design
Supply chain design is the practice of creating multiple models in digital form of how your supply chain looks and functions. It’s a way for your company to analyze the structure and design of your entire chain. This includes transportation costs, manufacturing concerns, understanding lead times, inventory, and anything pertinent to the smooth operation of a company’s supply chain. Using Supply chain design is ideal for assessing long-term goals, meeting targets, and successfully strategizing for the future. A good strategic design model will help supply chain managers do many beneficial things, including:
- Analysis
- Development
- Negotiating
- Proposals
- Sourcing
- Realizing contract benefits
- Tracking
- Sustainability
Cultivating a better understanding of supplier markets and building a better strategy are all keys to driving future success for yourself and your customers long term.
Gather Relevant Data
A big part of supply chain seeing is gathering the relevant data necessary to build a model and run various scenarios. The best way to go about data collection is through automation. Usually, data is only gathered for certain parts of the supply chain, like at the procurement level. Furthermore, supply chain managers aren’t always the most savvy at collecting or analyzing. Logistics is a very physical job in most respects, so a manager can be quite talented while still struggling with the big data component. That’s not a problem when you integrate powerful solutions like digital supply chain modeling into your organization’s information flow. Gathering the most relevant data is critical for building a useful model, so it’s always best to ensure you have the necessary tools.
Data Analysis
Gathering data is just the first part of a strong supply chain design. Analyzing that data is also pretty important. As you gather large amounts of data about procurement, processing, distribution, and other vectors you need to figure out a way to analyze it effectively. Over time, the different methods for analyzing supply chain data have constantly evolved in a changed considerably. There are predictive mathematical models you can use as well as statistics. But the best method is to use software. Applications now let you see everything from traditional warehouse data silos to warehouse management, logistics and asset management. Quality analysis helps you improve forecasting efficiency, respond to customer concerns, plan better, create better sourcing plans, improve delivery time, and make any necessary adjustments to your inventory. Understanding your data is so crucial to designing and modeling your own supply chain that using a software solution is one of the best methods of improving your game plan significantly.
Use Modeling Software
Perhaps the best and most efficient means of understanding and modeling a supply chain is to use powerful supply chain design and modeling software. Building models is valuable for testing and designing unique supply chain configurations for forecasting/prediction in your own business. A digital model is only as good as its capabilities. Look for something that helps you maintain a smooth workflow, offers insight from vectors across the company, and can be manipulated/changed to test various scenarios. The value of testing multiple scenarios gives you more information about where you need to make adjustments. You can also identify vulnerabilities and make adjustments in real time. Along with collaboration potential, full control over your data, and instant access to your data systems a modeling software solution can be a great boon to business and productivity.
Implementation
Implementing suppliers into existing processes and being involved in the onboarding of new vendors is another essential part of strategic sourcing. It’s easy to make it part of your supply chain design. Just add the information about your suppliers into the modeling software and you’ll be able to determine which ones are viable and which ones are not (or pose third-party risk). Moreover, you can integrate your modeling software itself into a larger framework of supply chain software that helps with procurement, sourcing, contract management, and more. Think of it as a larger overall system that helps you learn, grow, and adapt to changing times.