Here is the description of the talk from SCOPE's website:
“Dr. Pepper Snapple Makes the Most of their Supply Chain by Utilizing Network Design for Ongoing Sales and Operations Support”
· Supply Chain Network Design is not only a powerful business tool but if applied well can provide great value within all areas of your business.
· Sales and operations at Dr. Pepper Snapple Group must continually ensure the operation of an optimal supply chain structure is in order to allow for the best service levels to stores at the lowest overall cost.
· Come learn how Dr. Pepper applies supply chain network design down to the regional level by rationalizing warehouses and flow of product to stores as part of their territory planning.
Josh Buchanon, Packaged Beverage Network Optimization Manager, Dr. Pepper Snapple Group with Sara Lewis, IBM Smarter Commerce Supply Chain Marketing Lead, Co-Author ofSupply Chain Network Design: Applying Optimization and Analytics to the Global Supply Chain
* If you are reading this blog, you, your managers, and your internal and external customers should read this book. It will make you a better modeler, help you manage projects better, and help your customers better understand what you do and why it is important.
IBM's Smarter Commerce Summit will be held in Orlando, Sept 5-7, 2012
"There’s no question that your customers are in charge. They
have more information, more access, more influence. They’re savvy, and
Building on Smarter Commerce Global Summit in San Diego last year,
and the recent Summit in Madrid, the footprint expands with a Smarter
Commerce Summit Orlando 2012!
Smarter Commerce Summit 2012 provides business executives and
practitioners, with the insight and resources to effectively connect
with today’s customers. An event like no other, it combines over 150
business and practitioner breakout sessions comprised of new technology,
best practices, industry perspectives and visionary thinking, all to
help you optimize your business. It is the single largest gathering of
experts and peers for discovering new solutions to today’s most complex
As a supply chain professional, you will get a lot out of the conference's many talks and keynote sessions. If you are an ILOG customer, some talks that may be of direct interest include:
- The Supply Chain Revolution: GE Healthcare Uses Optimization to Manage their Global Supply Chain: Best-in-breed, smart and adaptive supply chain networks are the next
major wave of innovation in supply chain management. Learn how several
groups within GE Healthcare are using ILOG Optimization solutions to
make ongoing intelligent supply chain decisions. By building optimal
distribution networks and service strategies, GE Healthcare and its
relevant business units are reaping the benefits of a more competitive
and agile supply chain, resulting in better margins and profits. Join
this session and learn how you can do the same.
- Managing LTL Decisions with Optimization: Over the last six years, a team of experienced and committed supply
chain and outbound specialists have leveraged optimization and analytics
to significantly transform the CNH North American Distribution network
making it one of the most efficient networks in the Industry (as
measured by the North American Service Part Conference) both in terms of
service to the customers (internal and external) and in terms of costs
- Inside Scoop: Examining IBM's Supply Chain Roadmap and Strategy: When all participants are aligned, the interconnected supply chain can
cost-effectively keep supply and demand in balance--however, volatility
is on the rise. Join us as we discuss our strategy to deliver solutions
that effectively manage global volatility, optimize your supply chain
network, create an inventory and logistics strategy, execute global
logistics, detect risks early and help you react quickly to avoid
inventory issues and lost sales.
- Reinventing Decision Making with Optimization. Optimization can be an intimidating concept for business executives.
This presentation explains in business language, beginning with the kind
of bottom-line results you can achieve, what optimization is, what it
uniquely adds to an organization's decision-making capability, and how
you can go about exploiting its potential.
- Making Your Business Work Smarter with Optimization: Companies
across the globe are using optimization technology and solutions to
increase ROI and achieve deeper insights into business efficiency and
competitiveness. Join us to learn how optimization is being used across
a spectrum of industries for strategic advantage, and how you can
achieve the same results for your organization.
Is Product Bundling Right for your Retail or CP
- Optimize your Supply Chain While Juggling Multiple Objectives: Learn how the powerful optimization techniques developed by IBM can
improve the efficiency and results of network design analyses, and find
out how you can achieve multiple objectives while still getting more
value from your supply chain.
- Creating a Global Inventory Hub to Support the Right Plan, Right Promise and Right Fulfillment: Large, global manufacturers have a major challenge in deciding how much
inventory to keep, where to keep it and how to accurately promise it to
customers. On the one hand, companies want to stay as lean as possible,
yet on the other, they have to ensure that customer service levels are
met. In this session, we will discuss how IBM Order Management can be
used as a unified hub to manage inventory across business units,
stocking locations, business units and even different systems of record
(ERP or WMS). The IBM Inventory Planning and Flow Analyst solution
complements the Order Management hub by determining what the optimal
safety and cycle stock levels should be given different assumptions
about demand patterns, variability, and more.
- Using Analytics in Supply Chain Optimization: Find out how a leading company is using optimization analytics in
inventory placement, network design and truck routing, along with a
sustainability analysis engine and profit and loss simulation. Join this
session to see how they have been able to achieve dramatic results in
their supply chain operations.
- Manage Suppliers and Mitigate Risk: The uncertainty, volatility and fast-changing environment of a global
marketplace creates challenges all across the supply base. Techniques to
mitigate and counter risk, create transparency on global supplier base
and manage supplier relationships are key development for the today's
CPO. Join this session and to learn how companies can qualify, evaluate
and optimize suppliers to improve overall supplier reliability, drive
innovation, encourage competition and rationalize the supplier base.
Learn how to ensure corporate responsibility and increase sustainability
in the supply chain, and to effectively manage the end-to-end supplier
- Supply Chain Visibility: Applying Analytics to Integrate and Optimize the Supply Chain: Visibility is a top challenge for supply chain executives.
Multi-enterprise supply chain visibility is a key capability for
reaching new levels of effectiveness and efficiency and enabling a more
end-to-end approach to optimization. In this session, you will hear
IBM's point of view on supply chain visibility and get best practices
for collaborative supply chains. You'll also learn about the advanced
analytics capabilities IBM clients are using today--and within IBM's own
supply chain as well.
- The Executive Guide to Optimization: What does the optimized organization look like and why should this be
top-of-mind for the executive decision maker? Steve Sashihara, President
and CEO of Princeton Consultants discusses best practices for
recognizing optimization opportunities and how to ask for them.
- Workin' on the Railroad with Maintenance Optimization: Learn how to get the most value from your railway assets by improving
internal processes to help ensure resources are not wasted.
- Creating a Smarter Supply Chain with Analytics: What if you could reduce costs and increase customer satisfaction by
managing, controlling, and predicting inventory levels, while
synchronizing global communication and collaboration with your customers
and suppliers? Learn how your organization can become smarter by
attaining insight from your information to make better decisions. You
will also discover the growing role analytics plays in every aspect of
- Is Your WMS Future-Proof?: We live in a constantly changing world. And that is especially true for
businesses with acquisitions, mergers, new channels, partners,
outsourcing, and more. How easily your business can adapt to such change
is, to some extent, determined by how quickly your systems can change.
Have you invested in solutions that allow you to be flexible enough to
change as rapidly? Learn how IBM Sterling WMS can future-proof your
business to provide you the flexibility to be able to respond to change.
A new case study is available showing how Südzucker, Europe's leading supplier of sugar products with an annual revenue of approximately €7 billion, uses IBM ILOG LogicNet Plus to help meet their goals of a cost-effective and flexible supply chain:
Here is a quick summary of the case:
"When the European Union adopted a new market regulation for the sugar industry in 2006, Südzucker was forced to re-evaluate their entire supply chain network. On the one hand the company’s ability to export sugar to world markets became very limited, on the other hand major sugar deficit areas within the European Union were created. This led to a much greater focus on sales and distribution. Südzucker also knew this ruling would give them the ability to enter new sugar markets like Greece, Italy, Spain and the United Kingdom. Their challenge was to merge their national supply chain networks to create one integrated and powerful European supply chain network. The company had to determine how to modify their supply chain network by adding new facilities to ensure excellent service but also minimize transportation costs."
To read more, click here to download the full case study.
A new case study is available highlighting how Johnson Controls uses LogicNet Plus to model and improve their closed-loop battery supply chain.
The following is a quote from Johnson Control's Supply Chain Network Strategy Manager, Chad Montgomery:
"I’m using LNP XE every week to perform modeling on a variety of projects from small capacity analysis/capital investment decisions to quarterly financial forecasting and annual budgeting for capacity utilization, plant manufacturing, and shipping territories. LNP XE has allowed us to create clear pictures of our network, starting with a best-case utopia state and then quantifying the impact of each constraint. This clarity can reveal hidden savings opportunities as well as gives complete insight into the main drivers of our supply chain”
We will host our June Virtual Users Group meeting on Jun 26 at 11 AM ET, 10 CT, 8 PT.
We will cover some new features in LogicNet Plus XE, some aspects of LogicNet Plus XE to improve your productivity, and review what is new with Inventory and Product Flow Analyst.
You should have received an invite by now. If not, contact us and we will make sure you get one.
Today, we announced
the release of a new version of our multi-echelon inventory optimization product, Inventory and Product Flow Analyst (IPFA) v7.6
We have put a lot of investment in IPFA so that it fits within the workflow of an organization. That is, it is important to be able to answer strategic inventory optimization questions, but it is even more important to maintain the right inventory targets. You maintain these targets with strong work flow capabilities.
By maintaining the right inventory targets at all levels in the supply chain, you can avoid lost sales, minimize late shipments, minimize expediting, and keep inventory to a minimum. And, since IPFA directly accounts for demand forecast error and supply variability, you get value even when your forecasting is not very robust. For more details on the strategic importance of inventory optimization, click here
Highlights of this new release include:
- Simulation capability: Inventory planners can now analyze inventory and service level performance against simulated customer demands.
- More powerful Multi-Echelon optimization: Inventory and
supply chain planners can now optimize total inventory costs based on
variable committed service times or variable upstream service levels.
- Forecast error and supplier performance analysis: Inventory
and supply chain planners can now analyze forecast error and take into
account forecast bias in the inventory optimization process. They can
also measure supplier performance with an automated calculation of lead
time variability and receipt period.
- Ease-of-use enhancements: Enable inventory planners to perform their tasks more effectively.
At a the recent Manufacturing Leadership Summit, Toshiba gave the "Manufacturing Leadership 100 Award Winner Case Study Presentation." The talk was titled: "Using SCM to Create Competitive Advantage."
In the talk
, they mentioned that they used IBM ILOG LogicNet Plus XE to model different options. Among the improvements that they saw, the cost per shipment decreased by more than 12%. In addition, obsolescence reduced by more than 40% and missed service calls reduced by more than 16%. This all helped lead to double digit growth in customer use of Toshiba Supply Chain Services.
The May 22, 2012 edition of the Wall Street Journal featured an article about manufacturing moving back to the US. (Click here for the article-- it may be restricted to subscribers
). The article cited statistics from David Simchi-Levi of MIT stating that 39% of companies surveyed were considering moving production back to the US.
Of course, several factors were mentioned for this trend including changes in the relative cost of labor, the price of oil, and the ability to respond faster. Although not touched on in this article, making product closer to the demand can reduce the required inventory.
What is also interesting is that over the last 5 years, China has become a market where companies sell product. It used to be that companies just received product from China. Soon, firms found that their China plants were well-suited to cover the demand in China.
From a network design perspective, this brings up some interesting questions: should you make product for each region of the world in that region? Which products should you make in China and which ones in the US? And, what is the break-point for the price of labor and oil where it makes sense to move product from China to the US?
IBM was recently named to Inbound Logistics Top 100 Logistics IT Providers
. ILOG was acquired by IBM in 2009. Since then, IBM has dramatically increased its supply chain capability. some of this capability includes:
- ILOG Supply Chain applications for network design, inventory optimization, and transportation optimization
- ILOG Optimization solutions for unique scheduling and planning applications
- Sterling TMS for SaaS for transportation management
- Sterling Order Management and Supply Chain Visibility for distributed order management and visibility. This, for example, enables retailers to better handle their multiple channels and gain control of their supply chain
- Emptoris for strategic supply and contract management
- DemandTec for trade and promotion management and optimization
- Cognos and SPSS for supply chain descriptive and predictive analytics. For example, Cognos and SPSS have been deployed for value added S&OP.
We've recently written an educational book on network design. This book is aimed at both those who do network design projects for a living and for use in the classroom.
For those who do these studies, you will develop better intuition on how these models are solved and new ideas for modeling your supply chain. It can also be a good guide for people who are new to the discipline within your organization.
For those of you who teach, this book will introduce your students to the topic and provide them with a wide ranges of realistically sized models to work on. You can use with the IBM ILOG LogicNet Plus XE software from the academic initiative to allow your students to learn the topic with the use of commercial software.
If you want an educational demo of our network design solution using our LogicNet Plus XE product, check our video on YouTube. Click here for the link.
video gives you an introduction to the concepts of network design, shows you the software, and highlights the some of the powerful capability like multi-objective optimization. The focus of this video is on
traditional network design-- locating the optimal number, location,
size, and territories of warehouses.
Today, the latest version of IBM ILOG LogicNet Plus XE was released. This new version of LogicNet Plus XE has been translated into 7 languages. It is available in
- Portuguese (Brazil)
- Simplified Chinese
- Traditional Chinese
This release has been posted. If need help accessing it, please contact us.
Here is a description of the session from the registration site:
Managing a global supply chain is a constant balancing act. Making
sure you’re getting the best results means calculating thousands of
trade-offs. You need to consider every cost and constraint associated
with transportation, production, storage, and global trade, while
keeping service levels as high as possible. And when you consider how
unpredictable high-growth markets can be, the levels of complexity
Attend this IndustryWeek webinar featuring experts from IBM
and GE Healthcare to learn best practices for simplifying the complex.
Find out how your company can calculate the best possible supply chain
network design to meet rapidly expanding business needs.
You will learn:
- Why leading companies are integrating ongoing network optimization
into every major supply chain planning activity -- and how you can
benefit from their insights
- How major companies such as GE Healthcare are managing their
global supply chain structures in order to reduce costs, improve
customer service, and prevent disruptions
- How solutions can help your company simplify the complex though all-in-one packaged network design and planning
Global Network Optimization Manager
WW Technical Lead
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:
A driving force behind much of the success at ITW is the 80/20
business process. Learn how this business process was applied to supply
chain network and supply chain optimization at ITW.
Also, learn how new trends such as considering multiple objectives at
the same to gain deeper insights and learn how inventory optimization is
really about preventing lost sales, reducing late shipments, reducing
expediting, and running a better supply chain
Learn how the combination of tools and processes leads to on-going benefits
Toni Stark, Director, Distribution Operations, Illinois Tool Works Inc.
co-presented with Michael Watson, Ph.D., IBM and Adjunct Professor,
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.
As we've discussed before in this space, retailers are facing growing pressure from the rise of a smarter consumer. To keep up, a retailer has to do business in a smarter way. At IBM, we are calling this Smarter Commerce
One area where retailers have invested is in the ability to deal with customers seamlessly across multiple channels. That is, a customer must have the same experience whether shopping in your store or on your website and should be able to move between the two with ease. IBM's Sterling Order Management
is one way that retailers make this happen. Sterling Order Management allows you to orchestrate cross channel selling and order fulfillment. That is, it allows you to order on-line and pick up in the store.
With this increase in flexibility, it creates the need for additional inventory optimization capability at the store. For example, besides the foot traffic, a store also needs to have the inventory for customers who order on-line and pick up in the stores. Since this can potentially lead to additional sales when the customer is in the store, this may create the need for more inventory (and hopefully more sales).
In addition, some retailers are looking to ship on-line orders from the store. The idea is that you can allocate orders to the appropriate store and then ship it to customers the next day using standard ground service. And, the second benefit is that is could be beneficial to have this extra inventory in the stores. That is, if the store has an uptick in demand, the store will be in a better position to capture the extra sale. Of course, these benefits must be traded-off against the cost of fulfilling in the stores, and the stores must have the space for this.
To make this work is to pick the stores where you will ship on-line orders (you might not want to pick every store) and then put in place a good inventory optimization strategy. These stores will need extra inventory buffers to handle the increase in volume. The distribution centers that support these stores will need a new inventory strategy. And, the retailer will need to review the inventory strategy on a more regular basis. Click here for an article on the importance of a good inventory optimization strategy
As an added benefit, as your inventory strategy is fed into Order Management, you can build smarter rules for how to replenish when you are out of stock at one location. You don't want to take inventory from a secondary location today, only to run of inventory at that location tomorrow.
The commentary discusses how inventory optimization is critical business process that allows a firm to reduce out of stocks, late shipments (and penalties), reduce expediting, and reduce inventory (and free up cash).
At the 2011 annual CSCMP conference, Walmart's Greg Forbis spoke to a full session about Walmart's inbound supply chain. SupplyChainDigest reported on the talk
. Here a a paragraph from their article that represents the challenge and opportunity:
"He also said that Walmart's vast transportation network, including some
6500 dedicated trucks and an amazing 56,000 trailers, covering almost
every area of the country, could reduce total transportation costs
because its network density and buying power may result in lower costs,
especially in terms of using vendor freight to reduce empty miles
travelled, or produce better consolidations. He noted, for example, that
Walmart has about 12 consolidation DCs that combine less-than-truckload
shipments from vendors into full truckload shipments to its stores. "
During the talk, Mr. Forbis mentioned the use of optimization to help with this problem.
This is a great example of how optimization can help firms. When you have an almost unlimited number choices, optimization technology helps you sort through the possibilities. This is especially true with transportation optimization. We have previously discussed how deceptively difficult routing problems are (click here
for more information).
With Inbound logistics, the optimization is even more difficult. For example, you may need to find routes that pick up from multiple vendors and make drop-offs at multiple distribution centers. Most routing optimization focuses on outbound routes from a depot to stores. A nice advantage of IBM's Transportation Analyst is that engine is based on the Constraint Programming engine that gives you the ability to model inbound logistics and find great solutions that you otherwise would not find.
We often find that when we compare the results of an optimization run to the current plans, the optimization can find solutions that meet all the business rules and time constraints (which are not always met in the existing routes) and
reduces the cost.
In addition to IBM's own Smarter Commerce Global Summit, please join us at the following events: