When the annals of history reflect back on the pandemic and its seismic impact across the world, the gridlock thrust on global supply chain logistics will likely be more than a footnote. Volatility is everywhere with port logjams, capacity constraints, truck driver shortages, component back orders and production delays. Times like these, however, can illuminate opportunities to change and improve the way products move to and from your organization. A network optimization study is a prime opportunity to increase operational efficiencies. Network optimization studies provide visibility into your entire supply chain and deliver insights you can use to improve operations and reduce costs. For many shippers, data is often embedded across multiple spreadsheets, which makes it challenging to get a clear picture of supply chain hits and misses. This lack of unified visibility makes it difficult to clearly understand if product mapping is poor, standardization is lacking, or if various regions have different shipping priorities and protocols. These statistics put a finer point on the need for visibility through network optimization. According to the Logistics Bureau, 69% of organizations report they do not have full visibility into their supply chains. Furthermore, businesses with optimal supply chains have 15% lower supply chain costs and less than 50% of inventory holdings. How a Network Optimization Study Works The first step in a network optimization study is harnessing all of your organization’s relevant data. It might sound like a daunting task, but the key to streamlining the process is the creation of a “digital twin.” The digital twin consolidates all relevant supply chain data and provides a granular view of critical data elements— including volume, origins, locations SKUs, materials, product weight, and transportation
costs. Through this process, you see your lanes and flows in real time and understand your true total cost to serve. You can also weigh potential tradeoffs and separate opportunities that will improve your supply chain network from those that won’t. The next critical steps in network optimization modeling use sophisticated business intelligence (BI) tools. This takes your data from being visible to actionable, leveraging easily consumable, visual digital representations of your targets for improvement. Through these visualization tools, you can select different scenarios, view various strategies and calculate potential outcomes that can improve your supply chain operations and drive down costs. Is Your Organization Ready? As with most things, timing is everything. Supply chain leaders need to recognize opportunities for improving their shipping operations. Leadership needs to be willing to make changes based on the information revealed through the study. The team involved also matters—you need a mix of internal subject matter experts who understand sourcing, production and operational flow as well as non-logistics stakeholders from other areas of your organization to get the most accurate and actionable picture possible. A network optimization study is the perfect way to improve operations, in pandemic times and beyond. — Robert Boyle, PMP, Vice President, North America Managed Logistics Services, Odyssey Logistics & Technology Corporation
176 Inbound Logistics • January 2022
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