combining network optimization and cost to serve

© AIMMS - 2015 Do not copy, cite, or distribute without permission

Webinar: SC Network Optimization 2.0And how to extend SC Network Optimizationtowards Cost-to-Serve?

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About Marcel Mourits

> MsC in Mechanical Engineering

> PhD in Supply Chain Network Design

& Operations Research

> 10 years with Logistics Service

Providers and Retails

> 6 years in SC & Manufacturing

Business Consulting

> 3 years with AIMMS

Passion for improving decision making

© AIMMS - 2015 Do not copy, cite, or distribute without permission

AIMMS…

… offers a new approach to solve critical business problems in typically four months with our breakthrough technology.

© AIMMS - 2015 Do not copy, cite, or distribute without permission

Optimization finds you the “Best Set of Actions”

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© AIMMS - 2015 Do not copy, cite, or distribute without permission

SC Network Optimization; Technology Needs

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accurate,thebestpossiblenetwork

designsarecreatedbytheapplication

dynamic,i.e.beingeasilyupdatedevery

month

automatic,uploadlatestdata

automaticallyforeachnewstudy

timely,executeyourstudiesquicklywith

thefastesttechnology

flexible,anychangein

scope,aspects,constraintsandcomplexitycan

beeasilyincorporated

end-to-end,toincludealso

yoursuppliers,contractors,distributors,andclients

© AIMMS - 2015 Do not copy, cite, or distribute without permission

SC Network Optimization; Technology Needs

6

accurate,thebestpossiblenetwork

designsarecreatedbytheapplication

dynamic,i.e.beingeasilyupdatedevery

month

automatic,uploadlatestdata

automaticallyforeachnewstudy

timely,executeyourstudiesquicklywith

thefastesttechnology

flexible,anychangein

scope,aspects,constraintsandcomplexitycan

beeasilyincorporated

end-to-end,toincludealso

yoursuppliers,contractors,distributors,andclients

© AIMMS - 2015 Do not copy, cite, or distribute without permission© AIMMS - 2015 Do not copy, cite, or distribute without permission

What makes your SC network study unique?

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Sustainability

Taxconstructions

Speculativesourcing

Finance

Specificskill needs

Productionprocess

SupplyvsDemanddriven

Alternativeproducts

Stochastic NPI

...

© AIMMS - 2015 Do not copy, cite, or distribute without permission

SC Network Optimization; Examples

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© AIMMS - 2015 Do not copy, cite, or distribute without permission

Our clients in Supply ChainOptimization & IBP

1990 1995 2000 2005 2010 2015

© AIMMS - 2015 Do not copy, cite, or distribute without permission

Our partners in SC Network Optimization

© AIMMS - 2015 Do not copy, cite, or distribute without permission

Why powering Cost-to-Serve with SCNO?

Initially, insight into cost-to-serve is great!

Over time, questions emerge on how to:

> Keep aligned with reality?

> Allocate shared costs fairly?

> Go beyond low hanging fruit?

> Embed in monthly IBP process?

© AIMMS - 2015 Do not copy, cite, or distribute without permission

Adding SCN Optimization to Cost-to-Serve

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© AIMMS - 2015 Do not copy, cite, or distribute without permission

Adding SCN Optimization to Cost-to-Serve

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© AIMMS - 2015 Do not copy, cite, or distribute without permission© AIMMS - 2015 Do not copy, cite, or distribute without permission

SCN Optimization & Cost-to-Serve

COST • minimizecost

REVENUE• maximizegrowth• markets,accounts• newproductintroductions

ACCOUNTING • allocation• dependencies

IMPROVEMENT • ‘alwaysright’• granularity

© AIMMS - 2015 Do not copy, cite, or distribute without permission© AIMMS - 2015 Do not copy, cite, or distribute without permission

SCN Optimization & Cost-to-Serve

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from observing to steering

COST

REVENUE

ACCOUNTING

IMPROVEMENT

......

......

......

......

© AIMMS - 2015 Do not copy, cite, or distribute without permission

Questions you can answer with SCNO - CtS

> what is the best SC setup if I want to minimize costs? Or maximize growth?

> which solution is best in emerging markets? And which for key accounts?

> how do I rightfully allocate upstream costs to down stream supplies?

> how do changes in one product group / client segment affect others?

> how to best prepare for multiple New Product Introductions?

> how can I ensure my Cost-to-Serve is set right at all times?

> how granular can we go?

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© AIMMS - 2015 Do not copy, cite, or distribute without permission

short example

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© AIMMS - 2015 Do not copy, cite, or distribute without permission

SCN Optimization & Cost-to-Serve & . . .

> extend to Segmentation ?

> extend to COGS ?

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© AIMMS - 2015 Do not copy, cite, or distribute without permission

Next Webinars in this series

Interested in more Webinars ?

> Send your ‘Christmas wish list’ to: marcel.mourits@aimms.com

Check us out at www.aimms.com

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