IBM Decision Optimization
Earlier, we recorded a session with SupplyChainDigest on strategic sourcing. This session covers how firms can better use their manufacturing network. For example, where should a product be made and at how many of the plants. These decisions can impact manufacturing costs, transportation costs, and the ability of your supply chain to meet its objectives.
This use of LogicNet Plus XE (LNP XE) is part of a larger trend. More firms are using LNP XE on an on-going basis to gain a competitive advantage in the market. This can range from strategic sourcing to budgeting to contingency planning. This is a way to leverage your supply chain data and bring advanced analytics to your supply chain.
Click on this link for a video on strategic sourcing. You will need to submit your email to register and you will be all set.
We will be speaking with ITW at SCOPE Spring in Chicago on Monday April 23rd 11-12. The title of the talk is "New Trends in Supply Chain Analytics."
Here is the abstract from the SCOPE website:
Toni Stark, Director, Distribution Operations, Illinois Tool Works Inc. co-presented with Michael Watson, Ph.D., IBM and Adjunct Professor, Northwestern University
ITW is well known for their use of the 80/20 rule to focus on the important. (Click here for their write-up on this idea). It will be interesting to hear how these concepts apply to supply chain analytics. We look forward to seeing you at SCOPE.
Retailers are Restocking Shelves-- Analytics and Optimization Can Ensure You Stock with the Right Products
MichaelWatson 270002K5FS Tags:  supply_chain store_operations retail shelf_space analytics ilog optimization 3,469 Views
According to an article in Businessweek, "Companies from Tiffany & Co. to Home Depot Inc. are restocking shelves in a move that will boost economic growth and may keep the recovery on track through 2010."
The questions many retailers are asking is "what should I restock with?"
Today, we recorded an educational webinar with SC Digest on shelf space optimization-- a great way to answer the question about how to stock your stores. The objective is to keep customers happy at every single store with the right products and, in turn, drive up revenues and profits.
SC Digest will keep the Webinar available for 12 months for viewing. You just need to register to watch it. Click here for the link.
MichaelWatson 270002K5FS Tags:  inventory_optimization cscmp inventory_analyst ilog 3,462 Views
Abbott Laboratories and IBM will speak at the upcoming CSCMP annual conference in San Diego.
This holiday shopping season showed the importance of good inventory visibility and optimal inventory levels for retailers.
A recent report from internet Retailer reported on an Aberdeen study that showed that over half the retailers do not have good inventory visibility into their supply chain and that 30% of retailers reported out-of-stock rates higher than 7% (representing lost sales or unhappy customers). Click here to go to the article.
At NRF this month, IBM will be highlighting our supply chain visibility and inventory optimization solutions. If you will be there, stop by the IBM booth to learn more.
Having the ability to continually analyze and optimize your supply chain allows to you keep costs low, respond to customer requirements, and better support the overall business strategy. Firms using LogicNet Plus XE on an ongoing basis have been able to realize these benefits.
A good example of this is from Armstrong World Industries, "a global leader in the design and manufacture of floors, ceilings and cabinets with a focus on innovation, design and environmental sustainability." Here is a link to their case study.
The case study sites the ability to make better decisions as a key benefit of this type of on-going analytics:
Some business units within Armstrong do not make a change or investment without consulting with the central modeling team. Sometimes the modeling results confirm the preconceived notions and sometimes the results cause people to change their mind. In all cases, the process makes the managers in the business think more rigorously about the problem and allows for better solutions.
We also have a white paper on this topic as well if you would like additional information.
In the recent letter from the chairman in IBM's 2010 Annual Report, Sam Palmisano discussed business analytics and optimization as a key part of IBM's future growth strategy:
IBM spotted this emerging need early, building the world’s leading analytics practice, with 7,800 expert consultants, the world’s premier nonacademic mathematics function, leading‑edge software and offerings integrated by industry.
As a reminder of a detailed explanation and definition of analytics from an IBM team, click here.
MichaelWatson 270002K5FS 3,410 Views
In the Nov/Dec 2010 issue of Analytics, four IBMers from R&D, software, services, and strategy outline IBM's view of business analytics.
IBM identifies three broad categories of analytics activity: descriptive (what happened?), predictive (what will happen?), and prescriptive (what should we do?). As you move from descriptive activities to prescriptive, you are bringing more value to your organization.
The ILOG optimization and supply chain applications fit into the area of prescriptive and play a key role in IBM's overall strategy. The article sites an example:
Of course, prescriptive analytics does not stand alone. You need to provide input data, build this into an overall work flow, and be able to act on the results. IBM is uniquely positioned to help firms effectively compete with analytics. The last sentence of the article sums up IBM's business analytics strategy: "IBM is aiming to be the a market leader in business analytics."
On Sept 15, SupplyChainDigest and IBM will be hosting a videocast on building smarter consumer products supply chains. Click here to sign up for this event.
The following is the text from the registration site with more information:
Videocast Series: Building Smarter Consumer Product Company Supply Chains
Part II: Capitalizing on Supply Chain Complexity and Your ERP Investment in the Consumer Products industry
Next in this IBM series on Building Smarter Consumer Products Supply Chains, we will explore the ways in which companies are capitalizing on supply chain complexity and ERP investments. We will discuss top executive and supply chain challenges in the consumer products industry, including customer case studies focusing on the following issues:
We explore all this and more in this outstanding broadcast. Featured speakers include:
Remzi Ural, Global Supply Chain Solutions Manager, Consumer Products Industry, IBM
Michael Watson, IBM Optimization & Supply Chain Solutions, Technical Sales Lead
As usual - excellent material from IBM ILOG.
Optimizing inventory is about determining the appropriate reorder points and order sizes so you have the right amount of inventory for every SKU at every location.
The graph to the left shows the results of an inventory study. The SKU's are along the x-axis and the y-axis shows the needed change in inventory.
The SKU's with the red bars show that you should hold less inventory for these items. That is, for these items, you will reduce the amount of inventory. This frees up cash and reduces your cost to finance and hold that inventory.
However, the SKU's with the green bars show items where you should be holding more inventory. What this tells you is that for these items, you are currently either missing sales, providing poor service, or going through extraordinary means to fill the orders (shipping out of territory, expediting, and so on). Of course, these extra costs may not matter to you-- but, our experience has shown that these extra costs or lost sales easily swamp the extra cost of the inventory. And, it is important that you explicitly decide whether you want to hold the right amount of inventory or pay the costs in lost sales, poor service, out of territory shipments, or expediting.
Webcast: Building A Smarter Supply Chain - Positioning Your Business for Economic Recovery and Growth
Register today: http://www.sctvchannel.com/Videocast_Building_Smarter_Supply_Chain.php
Join IBM Optimization and Supply Chain experts on March 30, 2010 for the webcast: Building a Smarter Supply Chain: Learn how to position your business for recovery and growth with better supply chain decision-making using next generation supply chain optimization.
Is your business positioned for recovery? Are your supply chain strategies flexible enough to manage a rapidly changing and volatile economic landscape? Join IBM ILOG Optimization & Supply Chain experts to learn how optimization technology supports flexible business strategies that enable companies to reduce costs today and prepare for growth tomorrow.
Use Optimization Techniques for Complex Decision Support: A DecisionBrain Case Study in Container Terminal Logistics
Length: 1 hour
Next Session: June 25, 2014 at 07:30 Pacific, 10:30 Eastern, 16:30 CET
Speaker: Filippo Focacci, CEO, IBM Business Partner DecisionBrain
Session Topic: Use Optimization Techniques for Complex Decision Support: A DecisionBrain Case Study in Container Terminal Logistics
One of the challenges of large Container Terminals is to smoothly coordinate Quay-side and Yard-side operations during the container load/discharge process. Taking advantage of the IBM Optimization platform and technology, DecisionBrain (www.decisionbrain.com) successfully implemented an innovative decision support solution to help one of the largest Container Terminals worldwide to closely coordinate operations and reduce Yard Clashes. In this presentation we share the key ingredients of this successful implementation: project approach, solution architecture, technical approach and best practices.
We look forward to your participation. Please contact Kitte Knight at email@example.com for an invitation to this Webinar.
This map shows a classic network design case. This client was producing most of its product in northwest Mexico with some product coming from the Virginia plant.
Like many firms, they were just distributing product from the plant where the product was made. The baseline map shows the current situation.
They wanted to do an analysis to determine a better distribution strategy. The result on the right shows the optimal distribution strategy. Thy shipped full trucks loads from the plant in Mexico to the warehouse in Virginia and then on to the customer.
This solution has much more expense in transportation from the plant to the warehouse. However, this is more than offset by the savings on shipments to customers. The optimal solution resulted in $5MM in savings (about a 25% reduction in transportation costs).
Although this case looks rather simple, it wasn't clear at the start whether the best solution would have one warehouse in the center of the country, two warehouses not located at the plants, or a third warehouse. And, it wasn't clear how the country should be split. And, finally, with a lot at stake in terms of savings, and moving capabilities, it is important to do a robust study to make sure you have covered all the angles.
Andrew Reese 270002Q78Q Tags:  chains conference regional chain supply visibility smarter – atlanta 3,339 Views
The first presentation of the day came from Karen Butner, Global Supply Chain Management Leader for the IBM Institute for Business Value, on IBM's Global Chief Supply Chain Officer Study, based on interviews with 400 some supply chain executives worldwide. Karen Butner has more than 25 years of experience in supply chain management business practices and strategies. Her concentration has been to assist clients in the high technology, retail and consumer products, electronics, and transportation logistics industries develop strategies and improvement agendas to bring significant value in transforming their global supply chain performance.
The study took about six months to get through, with conversations (hour-and-a-half interviews) with 400 supply chain leaders in about 30 different industries across 25 counties, and they spoke with a variety of different supply chain executives within the enterprise. They focused on supply chain strategy; how companies are collaborating; how agile companies are; how they manage risk; how they use technology and leverage opportunities around real-time data management. One key focus was on how effective different supply chain initiatives are.
The top challenge cited by Chief Supply Chain Officers was supply chain visibility, and where they are focusing is on real-time information transparency inside and outside the enterprise, as well as on event management and alert notification. Interestingly, the top barriers to greater visibility were "organizational silos" and people are "too busy to assist others" in collecting the data and information necessary to provide visibility.
MillerCoors and IBM will speak at the upcoming CSCMP annual conference in San Diego.
A screen shot from the brochure is to the left showing this talk. This talk will also feature a speaker from Ralph Lauren. I will post an update when CSCMP updates the brochure.
As always, the CSCMP talks are very educational. If you are going to be in San Diego for the event, please stop by for the talk.