The Need For a Robust Capacity Model 

Our client's capacity planning challenges were similar to those of other apparel companies that need to ensure they have enough capacity to meet demand. Expanding warehouse capacity is costly, and companies may find themselves constrained by limited space. As their product offerings and demand grow, managing storage space efficiently becomes a significant struggle, and projecting capacity develops into a complicated task. 

Simple approaches to projecting capacity fell short as they fail to capture realities inherent to the apparel business such as long and unpredictable supply lead times, the need to receive supply in large lumps at the beginning of the season, and the additional capacity requirements due to slow-moving and obsolete stock. 

Our customer realized that needed a robust solution that would allow the company to capture the complexity of their operations, the interrelations of the logistics flows, and the inherent variability of the business.  

The objective of this solution was twofold: to create a centralized process that would help convince stakeholders about the capacity requirements needed taking into account existing policies, and to assess the potential repercussions on the supply chain in the next ten years due to the introduction of new distribution centers or the discontinuation of current facilities. 

A Solution Tailored to The Apparel Customer Needs 

SimWell worked collaboratively with the customer to develop an advanced simulation model capable of accurately replicating the client's inventory warehouse supply chain, incorporating the unique supply and demand strategies they use. This data-driven model stands out for its exceptional: 

• Accuracy and validity, since it was validated and calibrated against real data to ensure they provide reliable and trustworthy results 
• Ease of use, as it is able to use as input the strategic demand projections 
• Agility, as it incorporates on-screen parameters to adjust quickly demand and supply aspects  
• Flexibility and Adaptability, since it allows for swift modifications to the supply chain structure 
• Performance and efficiency, as it was designed and built to run quickly so the user could create multiple scenarios and compare them at ease

Furthermore, the users enjoy other unique features such as

• The ability to dynamically adjust and being able to estimate and track unsold inventory quantities that eventually become obsolete in the market
• The ability to dynamically define the desired number of weeks of coverage for each warehouse, allowing for precise customization of inventory levels

This granular control empowers the user to effectively manage the behavior of the supply chain under varying circumstances.

The model is also impressively fast, processing a decade's worth of data in less than 30 seconds (when running at maximum speed). It also features an easy-to-use built-in dashboard that allows real-time monitoring of inventory levels and other key performance indicators (KPIs) while the model is running.

This information is then collected and stored in output files, facilitating the generation of comprehensive reports or providing the option to explore the entire dataset using the integrated PowerBI dashboard.

Robust Models That Convince Stakeholders to Take Action

The inventory supply chain simulation model allows for capturing the complex dynamics of the supply chain, conducting what-if analysis to test different scenarios, mitigating risks, evaluating performance, and facilitating continuous improvement.

The simulation model provides a holistic view of the supply chain system, enabling analysis of interconnected nodes, inventory levels, and customer demand patterns. It helps the client make informed decisions about production capacity, distribution strategies, and investment in facilities.

Additionally, the model provides a flexible and objective means to assess performance, measure key performance indicators, and adapt to changing market conditions.

Our customer was able to create the desired solution to estimate storage and throughput capacities, develop and test critical scenarios, and convince stakeholders to take action!

Are you interested in being able to estimate your capacity requirements and convince your stakeholders?