What is Supply Chain Network Modelling?

• Creating a digital representation of the interconnected flow of goods across the entire supply chain, with the respective cost associated to warehousing, transport, labour, duties and inventory holding, at every node / line.
•  Generating multiple scenarios by adjusting nodes, flow and other variables. This can involve considering different warehouse locations, transportation modes, production capacities, import / export locations, supplier configurations and more.
•  Evaluating these scenarios and assessing the impact of each scenario on efficiency, cost, service levels, and other relevant factors.

What are Benefits of Supply Chain Network Modelling?

• By analysing various factors like transportation routes, warehouse locations, and production facilities, network modelling helps identify the optimal network design for your supply chain. This enables you to streamline operations, minimise lead times and improve customer service.
• Network modelling facilitates determining the optimal inventory levels and placement to meet demand while avoiding excess or stockouts. It enables businesses to reduce holding costs and enhance order fulfilment rates.
• By simulating different scenarios and evaluating the impact of disruptions, such as volume changes, natural disasters, network changes or supplier failures, network modelling enables businesses to proactively identify vulnerabilities and develop robust contingency plans. This aids in minimising risks and enhancing supply chain resilience.
• Identify cost-saving opportunities like consolidating warehouses and/or shipments, reducing duties paid, optimising transport modes, or renegotiating contracts with suppliers.

What is The Typical Savings?

The cost saving achieved can vary widely depending on the specific circumstances, the level of optimization already in place, the complexity of the supply chain, industry norms, and the extent of the changes implemented. However, the following provide a high-level indication of savings which could result from network modelling:

• Transport Cost saving from 5% to 20%or even more can be realised through improved route planning and load consolidation.
•  Efficient inventory management can lead to cost reductions of 20% to 40% in carrying costs.
• Warehousing and facility cost savings typically range from 10% to 30% mainly through streamlining warehouse operations and consolidating facilities.
•  Through strategic sourcing, supplier consolidation and improved collaboration with supplier's savings from 5% to 20% in sourcing cost can be realised.
• Cost saving due to risk mitigation and avoidance proves difficult to quantify, but soft benefits include minimising the impact of disruptions and the associated cost of expedited shipping, inventory write-offs, and business interruption.

Reach out to us today to learn moreabout Supply Chain Network Modelling at info@maluti-x.com