Welcome to AAI's monthly Innovations, where we share best practices in simulation engineering through case studies and industry experience. In this month's issue, we focus on how analyzing the elements of a current supply chain can help with future planning.

Improving an Existing Supply Chain

On a recent business trip I sat next to a gentleman on the airplane who described his job role as being part of the company’s ‘supply chain’. As our conversation progressed, I learned that he was actually a sales representative for a notable zipper manufacturing company. I was a little surprised to hear that a sales person in a zipper manufacturing company considered himself a part of the supply chain! However, after some careful thought I agreed that he was actually right. This man represents a closure device that is integrated into numerous other final products for consumer purchase. In supply-chain-speak, he is a tiered supplier to a finished goods/assembly customer. His company has all of the fundamental components of any supply chain: marketing, raw materials procurement, production, inventory, sales, distribution, and logistics.

Over the years, the TranSystems | Automation Associates, Inc. team has had the opportunity to review and evaluate many companies’ supply chain elements. In most cases, the “problem” is with a subset of one or more of the supply chain elements. A change in any one of these elements can have a significant impact on a company’s logistics and distribution. For example, AAI believes the best way to start is with the ‘top down’ approach. By identifying the operational elements of the overall supply chain, it can then be determined who the key relationships are in the company. With that knowledge, the client is in a better position to identify those aspects of the supply chain that offer them greatest return.

A recent project involved the evolution of three separate home and builder supply companies that were brought together through a series of mergers and acquisition. The corporate vision was to merge the sales capabilities in the existing product lines and also cross-sell to one another’s customer bases and geographical territories. This consolidation would hopefully increase the company’s product purchasing power and streamline its transportation systems. This cross selling would then filter through and result in increased sales revenues. In addition, the owners wanted to maintain individual profit and loss responsibilities for each company. Read more.

If you are considering a simulation project, and would like a free consultation to help clarify any of this information, please call us.

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Did you miss last month's edition of AAI's Innovations, Selecting the Right Simulation Software Product.