Trend vision RESILIENCE
Help with complex supply chain challenges is in high demand
An optimal supply chain requires a continuous focus on various areas: from network design to
demand planning and transport optimization. Many companies lack – or struggle to retain – the necessary in-house expertise. Especially in view of the ever-faster pace of change nowa- days, external consultants provide effective access to the relevant expertise supported by the right technology.
Chainalytics helps companies in various markets, each with their own unique chal- lenges. “In Europe we primarily assist cus- tomers with three types of challenges,” says Erik Diks, Managing Director Europe at Chainalytics. “The first is network design which is focused on optimizing the supply chain infrastructure. We help our custom- ers to answer questions such as ‘What is the optimal location and capacity of my distribu- tion centre (DC) and factories?’ and ‘What is the optimal flow from my factories to my customers – direct or via DCs?’. Secondly we help our customers to improve their plan- ning approaches, including demand plan- ning, supply planning and S&OP, which is mainly focused on aligning supply with demand. Thirdly, we help them to optimize their transport activities, ranging from ten- ders to optimizing the transportation pro- cess.”
Optimization
The market trends and the associated cus- tomer needs are strongly linked to those three pillars, according to Chainalytics. “When it comes to network design, for example, many organizations are suffering from a lack of visibility, as the current pan- demic has underlined. They haven’t paid
sufficient attention to optimizing their net- work in the past, so we’re now seeing high demand for more network transparency and network optimization,” he continues. This rapidly growing market turns out to be closely linked to transport optimization: “They are interconnected. The relatively low transport prices have reduced the pressure on the existing budgets. That budget pres- sure would normally drive demand for exter- nal assistance in tender processes.” One thing companies do still need is strate- gic and tactical insight, as well as help with aligning supply with demand. “That’s diffi- cult when the processes and technology for balancing supply and demand are not up to scratch. As a result, we’re receiving lots of requests – both directly and through our technology partners – to support customer projects.” According to Diks, the solutions that cus- tomers are seeking require the expertise to create network visibility based on big data, to gain insight into the business dynamics and to ensure the so-called ‘best use of current’. “That entails determining the costs and ser- vice levels associated with the optimal use of the existing infrastructure,” he explains.
Scenario planning
“When we’ve completed those steps, we can work with the customer to explore all kinds of scenarios that could help to improve the costs and/or service level, such as by open- ing or closing DCs, adapting routes or trans- ferring production lines to other factories. Ultimately, we arrive at the optimal infra- structure together with the customer.” “Our support for supply planning and demand planning tends to relate to pro- cesses that have evolved gradually over the years and which are sometimes still based in Excel sheets and point solutions that no longer meet today’s needs. We can help cus-
Erik Diks, Managing Director Europe at Chainalytics: “When it comes to network design, for example, many organizations are suffering from a lack of visibility, as the current pandemic has underlined.”
tomers to improve those processes in con- junction with our partners.”
Future outlook
Help from consultants is becoming increas- ingly important. “In the case of network design, for example, which only used to be optimized once every couple of years, now- adays it’s something you should really be doing continuously. You’re constantly faced with new requirements, so it’s wise to re- examine the flows from production sites to customers ever-more frequently. A growing number of companies are outsourcing that now, including bigger players. They often want to do it themselves, but they struggle to retain the necessary knowledge in-house.” Generally speaking, companies prefer to do their own planning. “Nevertheless, some aspects of planning are being outsourced, such
as statistical forecasting to iden-
tify demand patterns based on things like machine learning and mathematical models. Besides that, technology partners are keen to offer solutions that include some plan- ning components in the cloud, for instance. I expect we’ll see even more growth in this area in the years ahead,” concludes Diks.
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www.chainalytics.com
SUPPLY CHAIN MOVEMENT, No.40, Q1 2021
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