Modeling your Supply Chain Network

By Jennifer Liccardi

0608493Modeling a Company’s Supply Chain Network is extremely important to understand what is going on within the transportation portion of the business.  The business of today may be completely different than the business of 5 years ago.  Buying patterns, vendor/customer mix or freight volumes can change drastically over the years.

The initial step in modeling is to understand the current business.  The analysis will include monthly, weight break and Top 80% statistics.  Also, an important part of the initial analysis is a map of the origins/destinations as well as densities.    Densities help to determine the areas where a consolidation or deconsolidation is needed or if a sailing schedule can be put together.  The initial analysis gives a big insight into the supply chain and what areas need adjustments.

The next step in the supply chain process is to start modeling based on the findings above.  It is always important to start modeling the current scenario so it completely understood before adjustments are made.  There may be minor tweaks to the supply chain that won’t cause a big shock to the network.  Some of these changes may be making sure some LTL consolidation is happening, introducing multi stop consolidated truckloads or a mode change.

These solutions can be found using the optimization tool Mercury Edge in the TMS System MercuryGate.  The Mercury Edge tool also allows us to model different scenarios such as closing a facility, determining how many pool locations are optimal as well as where they should be located.

Modeling transportation should be on the top of every company’s list of To Dos.  Modeling gives a company a better understanding of their network and how potential changes will affect the transportation spend.

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