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Reimagining Supply Chain Network Optimization: The Power of Digital Twins

, , , | February 22, 2024 | By

The Challenge: when it takes too long to build your supply chain network optimization model

Can the traditional supply chain network optimization be deemed outdated before it's even fully developed?

Today, businesses are facing faster changes than ever before. They need a new way to improve their supply chains that can address both the ongoing need for better planning and the rising challenges like increased demand and higher costs.

More than ever, managing the complex challenges in the market—such as impacts from wars, strikes, natural disasters, or rising costs—depends on effective supply chain planning and testing.

The dilemma is evident when the development of a conventional supply chain optimization model is so slow that it risks obsolescence before completion. Recognizing this, the transition to a Supply Chain Digital Twin becomes essential.

By integrating real-time data, this innovative method transforms the traditional Supply Chain Network Design Model, enabling faster revisions and more dynamic responses in supply chain design evaluations.

This ensures that supply chain strategies are both responsive and resilient, ready to adapt to the ever-changing business landscape.

Supply chain optimization SimWell Blog


Rethinking Design Strategies: The Limitations of Conventional Methodologies

Here's a simplified breakdown of how supply chain design studies are typically conducted:

  • Trigger: A business requirement initiates the need for a network design study. This could stem from various factors such as market expansion, product diversification, or cost optimization.
  • Data Gathering: Information is collected from various sources including historical sales data, production capacities, transportation routes, and inventory levels. This data undergoes extensive analysis, cleansing, and aggregation to form the basis of the model.
  • Model Building: Utilizing sophisticated algorithms and mathematical optimization techniques, a network model is constructed to simulate different scenarios and evaluate potential configurations.
  • Scenario Analysis and Reporting: The model is put through its paces with different scenarios, tweaking variables such as warehouse locations, transportation modes, and inventory policies. Conclusions are drawn, and a comprehensive report or presentation is delivered to stakeholders.

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In today's fast-paced world, traditional approaches to supply chain management are struggling to keep up due to one major issue: they can't adapt quickly to real-time changes.

Let's dive into why this is a problem:

  • Time Lag: Typically, the process from the initial trigger to when the report is finally delivered can take about 3-4 months. In our quick-moving world, this delay means the findings might be outdated by the time they're shared.
  • Dynamic Market Conditions: Factors like changing demand, shifts in capacity, rising transportation costs, and inflation can greatly affect the reliability of study results.

So, what's the solution? The answer lies in incorporating real-time data streams into supply chain models. Here's how it works.


Integrating Real-Time Data with Supply Chain Models:

By automating the data collection and model creation steps, businesses can speed up the whole process. This allows them to quickly move to analyzing scenarios and making decisions. This approach keeps the insights fresh and relevant, enabling businesses to stay on top of market changes.

This shift dramatically reduces the time it takes to meet business needs from months to just 2-3 weeks, significantly increasing the study's reliability and helping decision-makers to act swiftly and wisely. This quick response time is crucial for maintaining a competitive advantage.


In summary

The move towards integrating real-time data into supply chain optimization is more than just a tech upgrade; it's a vital strategic shift in today's competitive market. By adopting this new approach, companies can ensure their supply chains are robust, adaptable, and primed for ongoing success amidst the constant flux of market conditions.

For more information, Download the Ebook: 5 Ways Dynamic Capacity Planning with Simulation Puts You in Control of Change in Your Supply Chain


About SimWell

SimWell Consulting and Technologies is a global company specializing simulation, optimization, and digital twin technology. Our core mission is to unlock simulation at scale. We empower leaders and operators to maximize their current resources, optimize their operations, and elevate their performance with simulation. We build models of our customers operation, test scenarios, and predict how it will perform in a risk-free environment.

With SimWell as your partner, your team will have the tools to make confident decisions, optimize your process, and press fast forward on your business.