How Scenario Simulation Helps You to Build an Agile Supply Chain Configuration?
Imagine you’re the Chief Supply Chain Officer at a manufacturing company, responsible for fulfilling customer orders that must meet strict quality standards. Your global suppliers produce essential components, while your customer deals with market volatility, fluctuating costs, and competition.
But here's the catch: lead times can be unpredictable. They depend on factors like market conditions, transportation, material availability, and fluctuating prices. With new competitors and changing demand, how do you navigate these uncertainties? How can you predict the impact on logistics and cash flow, and maintain customer trust and a competitive edge?
The challenge is to manage uncertainty in future demand while adapting internal processes and relationships with customers and suppliers in response to sudden changes or disruptions.
Solution
Take the guesswork out of your supply chain network. Reduce uncertainty in your decision-making process. A data-driven model gives you immediate information about service coverage, lead times, and facilities. Scenario simulation provides additional insurance and a cost-effective decision-making tool for managers.
For instance, you can detect demand patterns generated from historical data and regular forecasting. Based on that, you can simulate material procurement, reducing inventory and production costs. This improves cash flow, working capital, and resource management over time.
Going a step further, simulating a new manufacturing technology or additional production resources will support the rightsizing of plants and the identification of resource conflicts. A virtual supply chain environment reveals key insights, such as cost-to-serve and the impact of changes on customers or suppliers. This reduces operational costs, creates a more sustainable network, and enables the sales team to develop customized pricing strategies.
Benefits
These examples clearly show the potential of scenario simulation in terms of cost advantage and customer value. It will significantly enhance the competitiveness of your business by adding more resilience and flexibility in your supply chain network in its optimal configuration.
You can deal with a sudden and high priority increase of order quantities and a boost in future sales opportunities. You will be able to predict the impact of delayed fulfillment of orders in progress. And you get a clear view of additional costs from new orders.
More importantly, it will allow you to forecast the related benefits in the medium-to-long term as well as the potential resource needs for maintaining the existing customers while fostering the company growth.
Looking for a partner who understands the challenges of your supply chain, able to model every setup with limited data?
