Learn to target key supply chain areas for modeling and achieve maximum efficiency gains with expert Operations Research techniques.

I think demand forecasting will help organisations to effectively run the optimal supply chain. This will make companies to balance their ordering frequency and optimal inventory level.

How do you prioritize which areas of your supply chain to model first for maximum efficiency gains?

When it comes to enhancing your supply chain's efficiency, knowing where to start can be as crucial as the optimization process itself. Operations Research (OR) provides a toolbox of mathematical models and algorithms to improve decision-making in complex systems, like supply chains. By prioritizing the right areas, you can achieve significant efficiency gains. The key is to identify bottlenecks, predict the impact of potential changes, and allocate resources where they can make the most difference. In this article, you'll learn how to prioritize which areas of your supply chain to model first for maximum efficiency gains.

1 Bottleneck ID

To start, pinpoint the bottlenecks in your supply chain as these are critical areas where traffic builds up, causing delays and inefficiencies. A bottleneck can be a slow production line, limited shipping capacity, or a cumbersome procurement process. By using techniques such as bottleneck analysis in OR, you can identify these constraints. Once identified, modeling these areas first can provide quick wins because even small improvements can have a significant ripple effect, enhancing the overall flow of your supply chain.

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Manoj Khandelwal

Senior Procurement Leader | Strategic Sourcing | Vendor Management | Oil & Gas Industry.
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I find few areas where automation can help the bottleneck. Details as below: 1. Requirements identification to released requisition 2. Drawing and documentation approval 3. Item receipt at site to acceptance where user inspection is required.

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2 Impact Analysis

Next, conduct an impact analysis to understand which changes will have the most significant effect on your supply chain. This involves using simulation models to predict how alterations in one part of the supply chain will affect the rest. For example, you might simulate the effects of increasing warehouse capacity or speeding up delivery times. By focusing on areas where changes will have a substantial impact, you can ensure that your efforts and resources are invested wisely for maximum efficiency gains.

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Manoj Khandelwal

Senior Procurement Leader | Strategic Sourcing | Vendor Management | Oil & Gas Industry.
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I think one feature can improve the supply chain efficiency is visibility of dynamic lead time to all stakeholders, this should be continuous updated based on progress and some unforeseen events.

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3 Resource Allocation

Resource allocation is another crucial aspect to consider. It's about determining where to invest your time and money for the best return on investment. In OR, linear programming and other optimization methods can help you decide how to allocate resources effectively. For instance, if you have a limited budget for improvements, you might use these techniques to decide whether to invest in better inventory management software or a fleet of delivery vehicles.

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4 Demand Forecasting

Understanding demand patterns is essential for efficient supply chain management. Demand forecasting involves predicting customer demand to ensure that you have the right products in the right quantities at the right time. By modeling areas related to demand forecasting first, such as sales data analysis and market trends, you can better align your supply chain operations with consumer needs, reducing excess inventory and improving customer satisfaction.

Add your perspective

Manoj Khandelwal

Senior Procurement Leader | Strategic Sourcing | Vendor Management | Oil & Gas Industry.
Report contribution
I think demand forecasting will help organisations to effectively run the optimal supply chain. This will make companies to balance their ordering frequency and optimal inventory level.

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5 Technology Leverage

In today's digital age, leveraging technology within your supply chain can lead to substantial efficiency gains. Consider modeling areas where technology can be implemented or upgraded, such as automated inventory systems or real-time tracking of shipments. By prioritizing these areas, you can reduce manual errors, speed up processes, and enhance transparency across the supply chain.

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6 Continuous Improvement

Finally, remember that supply chain optimization is an ongoing process. Continuous improvement models such as the Plan-Do-Check-Act (PDCA) cycle can guide your efforts. By consistently modeling and analyzing different areas of your supply chain, you'll be able to adapt to changes in the market, technology, and your business environment, ensuring sustained efficiency gains over time.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you prioritize which areas of your supply chain to model first for maximum efficiency gains?

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4

5

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1 Bottleneck ID

2 Impact Analysis

3 Resource Allocation

4 Demand Forecasting

5 Technology Leverage

6 Continuous Improvement

7 Here’s what else to consider

Operations Research

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How do you prioritize which areas of your supply chain to model first for maximum efficiency gains?

1

2

3

4

5

6

7

1 Bottleneck ID

2 Impact Analysis

3 Resource Allocation

4 Demand Forecasting

5 Technology Leverage

6 Continuous Improvement

7 Here’s what else to consider

Operations Research

Rate this article

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