What is Supply Chain Network Design?
Supply chain network design is the practice of building and modeling the supply chain to understand how resources should be located and rationalized, such that the business can meet target service levels at the lowest possible cost. It determines the capacity of the business’ facilities, the movement or raw materials, intermediates, and finished goods – from the source to the point of consumption.
Using AIMMS for Supply Chain Network Design
Network Design is a common use case for optimization technology and most network design problems are quite generic in nature. For these reasons, AIMMS has built an off-the-shelf Network Design app with generic functionality that caters for 90% of supply chain design problems, so that you don’t have to build apps yourself.
Supply chain network design, explained
Companies want to maximize service levels, but they also want to cut costs. These goals often contradict each other. How do you find the optimum balance? That’s what Supply Chain Network Design is all about. Supply chain network design is primarily a strategic planning activity. Until recently, supply chain network design was done once or on a project basis. Rising volatility and uncertainty have changed that. Companies are now running models on a quarterly basis and sometimes more frequently, as an ongoing activity, to adjust to changes in their business landscape.
Explore Technology Types for Network Design
Typical Use Cases for Supply Chain Network Design
Optimize your supply chain based on costs and service levels
- Find the optimal number, size and location of your DCs, xDocs and warehouses
- Optimize allocations to reduce hard-coded costs
- Find the optimal supply/production locations and mix
- Determine optimal transport flows
Evaluate M&A and investment opportunities
- Assess the benefits of a merger or acquisition
- Rationalize the supply chain after mergers and acquisitions
- Quantify investment opportunities
Mitigate risks and build resilience
- Respond to supply, production, warehouse or transport disruptions
- Understand your exposure and ensure resource requirements
Diversify sourcing and manufacturing
- Assess the impact of multi-sourcing, near-shoring and postponement
Build a more sustainable supply chain
- Model the impact of carbon costs on your supply chain
- Identify ways to reduce carbon emissions
Manage capacity constraints
- Identify, quantify and manage production, DC, transport and other constraints
Hear From Customers Using AIMMS Network Design
“We chose AIMMS because its app wraps a state-of-the-art solver engine in an easy-to-use data interface with strong scenario modeling and results visualization tools. This enables us to quickly evaluate various scenarios that drive supply chain efficiency and customer satisfaction. The system allowed us to be up and running very quickly.” – Read an interview
Chris Furlong, VP of Transformation
“AIMMS provides outstanding value. It allows us to quickly answer very specific questions affecting our business. The benefits from optimizing our business based on those answers provides a great ROI for FMC-NA.”
Bill Hargrave, Vice President IT, Global Manufacturing and Quality, NA Operations
“A lot of network design decisions have cost implications. We can use AIMMS to get answers we can trust and believe in. These answers add weight to those conversations.” – Read an interview
David Mackenzie, Transformation & Inventory Director
Which capability is right for you?
Use AIMMS Network Design off-the-shelf, work with a consulting partner to build-your-own, or take a hybrid approach?
Creating a Strategic Digital Twin of your Network
Creating a digital twin of your supply chain is now a best practice to assess the impact of unexpected events and identify opportunities. This digital representation is like a robust chassis from which you can install diverse sub-assemblies, including optimization and prescriptive analytics to help you understand the business implications of different scenarios.
Read about Digital Twin as a Service
Bespoke Network Design Applications
There are some Network Design use cases where a bespoke app is a better fit. Feel free to call us to discuss in more detail which option is best for you.