Network Design & Scenario Modeling

Scenario-based design is an idea of modeling a future system or a potential system concretely to understand what happens if the defining parameters of a supply chain changes. For example what would happen if instead of 10 distribution centers the company had 15 distribution centers? Similarly how would outsourcing from abroad alter the safety stock levels?

The prominent reason in using scenario-based modeling in supply chain stems from the fact that there is an abundance of stochastic elements one need to consider in supply chains. Forecasts, lead times, order cycles, reorder points, promotions, trends, seasonality all induce variability to the supply chain. Hence scenario modeling provides the ability to monitor every single scenario and determine the replenishment levels accordingly which in turn affects the routing options. In one scenario you might prefer to use trucks whereas in another you might find it more cost-efficient to use trains.

Another vein in scenario based modeling is to design your supply chain network with respect to different realizations. Scenario based network design gives the flexibility to analyze whether current distribution network functions effectively. It also considers the what-if analyses such as rather than 4 distribution centers would it be better to have 3 or 5.

SOLVOYO gives the flexibility to generate scenarios as many as the customer wants. The basic parameters of the scenarios are determined by the customers and they see the results for these different scenarios. For example the customer might want to see the effects of changing transportation modes; he is given the option to alter the transportation modes. Or company wants to see whether to open a new inventory. The software adapts this change and provides results to the customer.