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Network Optimization: How to Select the Right Supply Chain Network Optimization Software


Network Optimization: How to Select the Right Supply Chain Network Optimization Software

While many companies previously relied on spreadsheets, designing an optimal distribution network requires the use of an advanced software solution to ensure long-term success. With so many vendors and solutions on the market today, selecting the right supply chain network optimization software for your business can feel like a daunting task.

Prior to evaluating different solutions, it is important to first understand your specific needs. Will the software be used for strategic planning—such as long-term decision-making and forecasting—for periodic network analysis, or are you looking for a tactical solution for short-term planning and execution that can also be integrated into an ERP or other management system platform? Answering this question will help you determine which features and functions are critical and which are less important in a supply chain network optimization solution.

While advanced software is necessary due to the complex nature of supply chains today, developing a successful network design also requires industry expertise to achieve maximum value. Additionally, depending on usage and needs, the high cost of network optimization software may not make financial sense for many companies. An experienced supply chain consultant can help you determine the right supply chain network solution based on your business objectives.

Once you have defined the main purpose and requirements of the solution, follow the checklist below to help identify the best supply chain network optimization software for your unique needs.

  • Data Elements: What pieces of information are required to build and run the model? Is all of the required information (manufacturing, storage, intermediary, customer locations, volumes, costs, capacities, timeframe, etc.) readily available and accurate?
  • Data Import: How easily can the information be imported into the model? What formatting is required for import?
  • Data Validation: Can the model validate the information being used to create the model or does that validation need to be completed prior to model build?
  • Baseline Creation: Based on the information required, can a complete and accurate ‘digital twin’ of the current network be created?
  • Baseline Validation: How can the baseline model be validated (cost and volume metrics, locations and lanes) using outputs from the model?
  • Geocoding Level: To what level of accuracy can locations be sited (city/state combination, 3- or 5-digit postal code and/or address level)?
  • Scenario Creation: How easily can scenarios be created off of the baseline? Can the scenarios utilize the same data as the baseline, or do separate databases need to be created?
  • Scenario Validation: How easily and accurately can the scenarios be compared and validated against the baseline from the model outputs?
  • Optimization Criteria & Effectiveness: Can the scenario comparisons take place via the software’s reporting or does this comparison need to be done outside of the model from the model outputs? Can the information be easily compared (cost and volume metrics, locations and lanes) from the model outputs?
  • Solution Mapping: Does the software have mapping capabilities for both baseline and scenario results? Can the mapping be manually manipulated and customized easily?
  • Solution Reporting: Do the reports need to be created or are pre-formatted reports available, easily accessible and understandable? Is there enough reporting functionality to provide the information needed, whether the reports need to be created or are pre-formatted?
  • Center of Gravity (CoG) Modeling (Siting, Number of Nodes, Flow Assignment, etc.): Can the software determine optimal nodes (manufacturing, storage, intermediary) based on volumes and costs alone, or do ‘candidate’ nodes need to be incorporated into the model first and then the model determines optimal flows and which nodes to flow to and from?
  • Transportation Flows Modeling (Cost Sourcing, Mode Optimization, Transit Matrix, Service Levels, Taxes/Tariffs, etc.): Can the software determine optimal sourcing (origin) based on specific business requirements (such as source from only one supplier/warehouse)? Can the software determine optimal mode selection (parcel, LTL, TL, rail, air, ocean) for each flow based on mode criteria and required service levels (no shipment load greater than 44,000lbs., next-day air, 2nd-day ground, within five days, etc.)?
  • Facility Modeling (Capacity Planning, Throughputs, etc.): Can the software optimally flow volumes and manufacture and/or store product based on facility capacity constraints (produce 500K units max annually, 250K square foot storage max, etc.)?
  • Inventory Modeling (SKU Optimization – Quantities & Locations): What level of product granularity (product family vs. SKU level) can the model manage and run efficiently and accurately? Can the software provide optimal cycle, safety and in-transit stock levels and locations?
  • Manufacturing Modeling (Capacity Planning, Work Center Routing, ‘Buy vs. Sell’): In addition to product granularity (product family vs. SKU level), what level of production granularity (facility level vs. work centers within a facility) can the model manage and run efficiently and accurately?
  • Model Accuracy: How accurate (sensible) are the model results? How accurately and efficiently can the model results be compared (via client validation, reporting, etc.)?
  • Ease of Use: How quickly and easily can the software be learned? How easily can the UI be navigated? How understandable is the UI terminology? How easily can model updates be made?
  • Interface Visuals: How visually appealing is the software’s UI? Can the UI, reporting and mapping be used to present to clients or executive leadership?
  • Documentation: Is there sufficient software documentation for training and support? Is the software documentation comprehensive and easily understandable and accessible?
  • Training: Is training offered by the software company? How complete and extensive is the training? Is training documentation provided? Are there any additional training fees?
  • Tech Support: How often is tech support required? Is tech support easily accessible and responsive? Does it require any additional fees?
  • Platform: What platform supports the software (cloud, API, etc.)?
  • Licensing: What is the cost and duration to license the software? Is the licensing fee based on usage (e.g., by project per month) or annually (e.g., a flat 12-month fee regardless of usage)?
  • Additional Costs: Are there any additional fees beyond licensing (training, software usage, geocoding, support, etc.)?
  • Vendor: How long has the software company been in business? How experienced are their personnel?
  • Concerns: Are there any other concerns about contracting and implementing the software?

Ready to improve your supply chain network? At Tompkins Solutions, our consultants utilize cutting-edge technology and their decades of experience to design the optimal supply chain network for your unique needs and objectives. Contact us today to learn how to optimize your distribution network to increase resilience, performance and profit margins.

supply chain

7 Ways to Update Your Supply Chain Strategy for 2022

The onset of the COVID-19 pandemic has changed the logistical landscape forever. There have been significant channel shifts due to renewed consumer behavior, the speed of orders, and delivery standard expectations. Amidst all this pandemonium, supply chains had to evolve years in a span of months just to keep up with this significant paradigm shift. 

Companies have moved away from low-cost supply chains and towards a much more resilient and agile framework. 87 percent of supply chain leaders are looking to invest in resilience in the coming years. As a result, the adaptation of next-gen transportation and logistics strategy solutions has made supply chains faster, smarter, and user-centric. Moreover, the logistics industry is evolving at an alarming rate and is said to reach a valuation of $12,256 billion by 2022. 

Since adroit logistics are reshaping the whole supply chain, what should you look forward to in 2022 and beyond? Read on to know more about seven different ways you can make your supply chain strategy even better!

Importance & benefits of a good supply chain strategy

In light of this new normal brought by the pandemic, it is of the essence that all companies, no matter the size, adapt a supply chain component. But why? Well, let’s delve into that for a bit.

Keeps costs and service quality in balance 

Customer satisfaction is key to the success of any business. But that might mean having goods in stock at all times. This might lead to overproduction and wastage of resources. With a good supply chain management (SCM) strategy in place, this can be avoided. The company shall save money and keep customers happy at the same time. 

Higher efficiency rate  

Data-driven SCM provides real-time data on the availability of raw materials and manufacturing delays. Hence, companies implement a ‘plan B’ instead of meeting these hurdles with empty hands. Out-of-stock inventory and late shipments won’t be an issue anymore. 

Encourages business development  

With an effective data-driven SCM strategy in place, you can analyze your past dealings with vendors. You can compare prices, quality of services, raw materials, etc., and realize improvement areas. Work on them and achieve your business goals efficiently. 

7 ways to better your supply chain strategy for 2022

Higher visibility 

Increased visibility into your supply chain’s transportation spend is a must. By doing so, you can improve on your weaknesses, control costs, and make effective, impactful data-driven decisions. In fact, 50 percent of global product-centric companies will have implemented real-time transportation visibility platforms. But why so?

Well, the answer lies in two parts. Firstly, they allow customers to track their orders in real-time. This meets the renewed customer expectations and makes the work of the customer support team a little easier. Secondly, the customer support team can deliver invaluable insights into your transportation costs and overall performance. 

Total visibility into your transportation spend is a gateway to optimize carrier selection, carrier rates, contract management, etc. Not only that, but you now have a stream of high-quality data that can help improve your business intelligence and make smarter data-driven decisions to cut costs further. 

Increased resiliency 

A resilient supply chain can be the only thing standing between a company’s success or failure. A bold claim? For sure. But is it wrong? Absolutely not. An effective, agile, and resilient supply chain management strategy can be a massive sales enabler and a significant driver to the company’s profit margin and growth opportunities. 

You need to optimize your transportation spending to understand where you are directing your money and root out all the unnecessary expenses. By controlling the costs within the supply chain, you can cut many costs and direct that money towards optimizing the areas that require improvement. Provided your supply chain management strategy is spot-on, you can make data-driven and impactful decisions and secure your place at the top of your industry. 

Optimized logistical networks 

The supply chain industry has recently seen a shift to omnichannel. The logistical disruptions caused due to the ongoing pandemic have accelerated this process by a considerable extent. According to a report by Gartner, 76 percent of supply chain professionals claim to have experienced an increase in disruption events in the past three years. 

72 percent of them also stated that the impact of these events has also increased. Hence, optimizing your logistical network for agility and resilience has become vital to maintain and multiply your customer base. Due to the ongoing pandemic, most customers have adapted to online shopping or buying online and picking up at stores (BOPUS). 

Although in-store shopping hasn’t completely disappeared, this new normal demands you to constantly keep up with customer orders and restock retailer inventory. Companies seem to be juggling between global, regional, and local networks to enable quicker delivery times. Hence, 90 percent of US retailers and consumer goods companies plan to change and optimize their supply chain network to increase efficiency. 

Better risk mitigation 

Risk mitigation is essential to maintain your customer base and the integrity of your supply chain. This point can’t be stressed enough post the onset of the pandemic. Over 28 percent of companies experienced a stock shortage in the first few months of the pandemic. This can damage your brand identity and have a detrimental effect on your customer base and market share. On top of this, damages, delayed shipments, inadequate storage environments, etc., can worsen the situation. 

You need to evaluate and identify the current risks to your company, prioritize them by probability and impact, and approach them accordingly. For example, optimizing and automating freight audits can act as a potent risk mitigator, as it eliminates errors, averts delays based on discrepancies, and streamlines operations. 

Digital supply chain adoption 

Supply chains have been very sluggish in adopting digital transformation. But the pandemic has been a wake-up call. With the digitization of almost everything in sight, supply chains need to undergo complete change management to stay afloat and keep up with the changing times. 

But what is change management? Change management is a collective term for all structured processes and approaches used to prepare, support, and help organizations make a complete organizational change. Managers today need to understand its tenets and create a seamless digital transformation. This is extremely necessary as only 1 percent of world supply chain leaders have an extensive digital supply chain system in place. 

With proper change management and digital supply chain tech adoption, this number is expected to shoot up to 23 percent by 2025. But people generally misinterpret the meaning of a digital supply chain. It is not just pushing spreadsheets onto a platform. 

It refers to the development and implementation of advanced technologies cloud-based computing, IoT, blockchain, ML, AI, etc.) to drive improvements in traditional supply chains. Implementation of such technology will reduce errors, improve resource efficiency, and provide valuable insights. 

Reliance on real-time data

Organizational silos can be detrimental to the smooth functioning of your company. Employees might become more insular and distrustful of other departments, making it challenging to work with other groups. Real-time data is the only way to break down these organizational silos as they offer complete transparency within your supply chain’s transportation spend. 

According to a study conducted by Forbes, 84 percent of supply chain leaders claim that real-time data has helped them break down silos across the entire value chain. Real-time data can allow you to control cost centers, measure performance, address procedural gaps, improve decision making, and boost overall team and company performance. 

With the pandemic still at large, the remote work culture makes maintaining transparency and leveraging accurate real-time data even more critical. This is to ensure that your transportations spend management keeps running smoothly and fruitfully. 

Increased disruptions 

The first nine months of 2020 experienced a massive 4200 disruptions to global supply chains, 14 percent higher than 2019. With disruptions set to keep increasing, supply chains must adapt and evolve to survive. Investing in supply chain resilience is an absolute must for 2022. 

Also, climate change is making it more and more necessary to adopt digital solutions within supply chain management. According to a WHO, UNDP, and IPCC report, climate change has increased heat in the workplace and has reduced labor productivity by 20%. Hence, our reliance on software solutions has to proliferate to unburden human resources and prevent productivity loss.

Implementing an agile approach to supply chain transformation

An agile supply chain is a supply chain of the future. Supply chains must encompass the ability to achieve more in a shorter time, adopting new digital technologies. All end-to-end processes, such as planning, manufacturing, logistics, etc., must be backed by the latest technologies. 

A more traditional supply chain will be rendered obsolete and must undergo complete change management to keep up with the rapid digitization of the industry. Process re-engineering (radical redesign of business processes) and adaptation of software solutions to cater to the company’s specific needs will pave the way for an impeccable supply chain management strategy. 


Hazel Raoult is a freelance marketing writer and works with PRmention. She has 6+ years of experience in writing about business, entrepreneurship, marketing, and all things SaaS. Hazel loves to split her time between writing, editing, and hanging out with her family.