LLamasoft

Supply Chain Network Design

Historically, network re-design initiatives were performed every 1 to 3 years to help a company realign its warehouse and factory locations and minimize transportation costs. Network design projects could take 4-6 months or longer, and model accuracy was limited by the need to limit the number of products and sites. Today, under LLamasoft’s leadership, Network Design has a whole new application and relevance. Supply Chain Network Design projects can often be accomplished in weeks or less. Models are often run at the SKU level, with multiple time periods, and entire end-to-end supply chains are evaluated and optimized. Supply Chain Guru® can evaluate network structure, supply chain policies, and integrated operations to optimize the trade-off of cost, time, and capacity in the network Network Design is now an essential and continual process of evaluating strategic options and navigating the volatile global marketplace. LLamasoft’s Network Design Solution offers multiple options for harnessing ROI and value from supply chain excellence:

Cost-To-Serve Analysis

Cost-to-serve is the analysis and quantification of all the activities and costs incurred to fulfill customer demand for a product through the end to end supply chain. By modeling all the supply chain activities in the network, and accumulating and properly allocating fixed and variable costs, an analyst can answer the question "What did meeting this customer's needs really cost me.?" With accurate cost-to-serve metrics, you can make a decision on profitability and pricing: is this customer profitable for me, given my supply chain configuration and costs? Is it a good idea to continue to stock and distribute this product? What should I be charging to at least cover my costs? With an accurate cost-to-serve and margin-to-serve model (when sale price data is incorporated), you can make the right business decisions and optimization the supply chain from the financial perspective. Supply Chain Guru incorporates detailed modeling capabilities, including multi-step fixed cost structures for facilities, processes, process steps, labor, equipment, and transportation assets. Guru also models variable costs throughout the entire supply chain. With Guru's unique combination of multiple solver and analysis capabilities, the analyst can:

• Use Enterprise Simulation to calculate the cost-to-serve and margin-to-serve at the customer-SKU level for the current network

• Use Enterprise Simulation to predict the cost-to-serve and margin-to-serve at the customer-SKU level for a new network

• Use Network Optimization to improve profitability by reconfiguring the network to reduce fixed and variable costs wherever possible

• Use Network Optimization to determine a business strategy which will support growth or achieve cost reduction efforts in the face of rapidly changing markets, demand, or macro environment costs.