Cosmo Tech

Six Ways to Improve Your Supply Chain Management Optimization

Six Ways to Improve Your Supply Chain Management Optimization

In the first article in this series, supply chain resilience was defined as the combination of resistance and recovery building the capacity of the system to resist and react efficiently to a disruption. In the second article in this series, we outlined the different types of disruptions and explained how Cosmo Tech’s Simulation Digital Twins help clients improve their supply chain resilience. Finally, in this third and final article, we explain six ways that resilience can be improved through supply chain management optimization.

It is clearly impossible to identify and prepare for all   potential disruptions to a modern supply chain. Today’s global supply chains are of unprecedented scope and scale. This means even the most advanced supply chain management optimization efforts are likely to misidentify a particular risk or have a blind spot for potential uncertainty. Still, while total resilience is impossible, it remains a focus for supply chain managers. 

In this article we explain six ways by which supply chain managers can improve their resilience, aid in recovery from disruptions, and get their business back on track faster thanks to cutting-edge technologies and 360° Simulation Analytics.

Supply Chain Management Optimization via…Proactive Monitoring

One of the keys to building resilience is identifying disruptions and uncertainties as soon as they occur. The earlier that disruptions are identified, the more quickly steps can be taken to address these uncertainties. As a result, proactive monitoring of systems, processes, and practices offers an avenue by which to improve resilience and optimize supply chain management strategies.

At Cosmo Tech we offer a number levers to improve proactive monitoring and lift supply chain management optimization efforts. To begin with, our Simulation Digital Twins offer high-frequency data refresh which, coupled with unlimited what-if simulations, enables for quick and accurate response scenarios to be tested against each other. Business dashboards depict the results of these simulations and the impacts of the different assumptions and choices in each, and how-to optimizations enable optimal responses to detected disruptions to be put into practice rapidly.

Supply Chain Management Optimization via…Flexibility

Resilience in a supply chain cannot be achieved where processes, policies, and decision structures are static. The reality of a modern global supply chain is that there are multiple points in that chain where issues can emerge, problems can develop, and disruptions take hold. Remaining flexible in the face of these risks and uncertainties is one of a number of operational supply chain management best practices that can build resilience.

Cosmo Tech’s Simulation Digital Twins help supply chain managers to build flexibility via two levers. First, the innovative 360° Simulation technology automatically identifies bottlenecks in a supply chain for the user. By identifying these bottlenecks at any point across the entire supply chain – for example, in a factory, in a logistics network, or in internal business processes – so that supply chain managers know where to act to maintain or improve flexibility. Second, Cosmo Tech’s technology offers robustness optimization as a standard feature. Users can include random variations of demand or production capacity directly in the simulation in order for the optimization algorithm to propose a solution which is robust to such random variations. This ensures that, where steps are taken to improve resilience through flexibility, the reinforcement is sufficient to withstand the threat of disruption.

Supply Chain Management Optimization via…Risk Assessment

In the medium term, risk assessment is a proven strategy to improve both resistance to disruption and resilience in the face of those disruptions. Risk assessments offer the capacity to anticipate potential disruptions and assess the likely impact of those disruptions long before they occur. Previously the domain of area experts, brainstorming meetings or wargaming sessions, today’s digital twin technology enables more effective supply chain management optimization strategies to be adopted.

Cosmo Tech’s risk impact assessment tools help users to identify the likely effects of risks on their supply chains. With this information, unlimited what-if simulations of different reaction scenarios help users to chart a course of action that is in line with organizational risk profiles. Additionally, Cosmo Tech’ Simulation Digital Twins offer sensitivity analytics as standard helping users to identify which risks to their supply chains. 

Sensitivity analysis offers the possibility to automatically identify the most critical parts of a supply chain (a supplier, factory, distribution center…), a business parameter (batch size, machine throughput, stock constraint…), or a combination of the two. Once identified, they can be reinforced to build resilience and a more robust supply chain.

Supply Chain Management Optimization via…Preparedness

Supply chain resilience can be improved by general preparedness, a tactical approach to mid-term supply chain management optimization that can prove a valuable lever for supply chain leaders. Preparedness is essentially the capacity to imagine, build, and virtually test contingency plans for the unwelcome but always eventual supply chain shocks.

Testing scenarios via simulation of complex systems is core to the Cosmo Tech Simulation Digital Twin technology. Users who embrace this modeling and simulation approach to find their forward can run unlimited what-if simulations based on different scenarios. Dashboards help compare the impact on corporate KPIs of each scenario and it is a simple task to identify the optimal operational and strategic approaches to adopt. With contingency planning and preparedness both listed high among the supply chain management best practices, the capacity to test these plans and improve preparedness via software simulation is increasingly a key arrow in the quiver of leading supply chain managers.

Supply Chain Management Optimization via…Agile Design

Moving to the strategic level, the agile design of a supply chain network can be a key means for improving supply chain resilience. Agile supply chains can be configured and reconfigured rapidly in response to disruptions, uncertainties, and other changes in the supply chain environment. More than local or operational flexibility, agile design is a strategic-level attribute that improves resilience significantly in the longer term.

Cosmo Tech’s Simulation Digital Twin technology is itself a product of agile design. As a result, it offers a number of levers by which a supply chain manager can improve resilience. The supply chain models, for example, within the digital twin are entirely flexible. Add to this the capacity for configuring unlimited what-if scenarios and automatically identifying bottlenecks in supply chain networks and the supply chain designer has the tools that they need to build networks that are resilient. Finally, the sensitivity analysis and robustness optimizations that help network designers to identify the points in their networks that are most at risk of disruption, and to reinforce those points with strategically deployed resources.

Supply Chain Management Optimization via…Decoupling and Buffering

The sixth and final means to achieve a new level of supply chain management optimization is decoupling and buffering. Put simply, this is the capacity for supply chain managers to improve resilience and build agility by decoupling flows in the supply chain, and to build, position, and deploy buffers in the form of inventory, capacity, and lead-times. These buffers offer a means to improve resilience to shocks and disruptions by reducing or even stopping bullwhip and cascading effects, therefore protecting supply flows from significant variability.

At Cosmo Tech standard features of the Simulation Digital Twin platform offer aid to supply chain managers to lift resilience by offering the possibility to test any decoupling or buffering strategy, and receiving automatic recommendations about the right place and size for these critical buffers. Sensitivity analysis, robustness optimization, and automatic bottleneck identification are all means by which decoupling can be explored and potential buffer points identified. Cosmo Tech solutions also offer automatic safety stock positioning which, for manufacturers or other supply chains with significant third-party supplier dependencies, can prove effective at improving global resilience levels.

Short, Medium, and Long Term Resilience Levers

These six resilience levers – proactive monitoring, flexibility, risk assessment, preparedness, agile design, decoupling and buffering – are more than just a means to improve the short, medium, and long term resilience of a supply chain; they are also examples of supply chain management best practices.

The 360° Simulation Analytics at the heart of Cosmo Tech’s Simulation Digital Twins for supply chain management are built from the ground up with a feature set that uses these levers to improve resistance, recovery, and resilience. Already manufacturing and supply chain leaders are embracing Cosmo Tech’s solutions to help improve their resilience in Europe and globally, too. As the global pandemic pulls the need for resilience into greater focus every day, there’s little doubt that such tools will continue to prove attractive to managers seeking to optimize and reinforce their supply chains in the future.