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Demand supply rebalancing through scenario modeling

At this moment, when dramatic shifts in supply and demand patterns can easily unrest the inventory planning and fulfillment strategies of the Retail and CPG organizations, it is critical to plan and optimize the flow of products and goods within their supply chain.

The Retail and CPG logistics supply chain is fraught with challenges owing to the critical nature of goods being transported globally. Many such factors are pushing retail and consumer goods organizations to take new paths, thus dictating the need for a redefined supply chain network optimization model.

While the demand environment and supply side capabilities are not static, Retail and CPG organizations must take a proactive approach by performing an extensive scenario analysis using technology, data, processes, and harness a competitive advantage by significantly improving in the areas of cost, service, and risk.

Whether you seek to improve your logistics and supply chain management process or transform your entire supply chain, a well-defined supply chain network optimization solution offers the ideal combination of operational efficiency and service level excellence paired with a faster time to value.

Do You Want to:

• Predict the impact on cost and throughput due to changes in the inbound transportation lanes?

• Know the impact of reduced manufacturing output on service levels?

• Have visibility toward the impact of the changed demand plans based on inventory and service levels across locations?

• Envisage changes required in inventory policy to accommodate/ mitigate all the above changes and constraints?

• Know how these changes would affect service levels?

• Understand which organizations are at risk of hitting capacity constraints across their manufacturing, and warehouse locations?

• Know how these changes would impact throughput and cost to serve?

Companies have realized the importance of supply chain network design exercises but are still unable to make the best use of it. The challenge typically lies in selecting the right approach. While internal factors driving supply chain network design are focused on driving service delivery and working capital optimization across existing networks, external factors focus on driving significant structural changes in global and dispersed distribution networks.

Through our Supply Chain Network Modeling approach, we provide you the tools, simulation techniques, and process orientations that are needed to quickly plan for and implement strategies that sustain cash flows and have a positive impact on your bottom line objectives. Our focus is dual:

Whether you’re planning a network, transportation, inventory, or capacity-related efficiency optimization project, HCL Technologies can investigate your present supply chain ecosystem to provide a wide view of similar projects and suggest potential ways to optimize your supply chain network and ROI

• Defining the critical components of your network keeping in mind the constraints imposed by the current business environment and your existing network

• Understanding which channels and capabilities are critical to servicing customers in the immediate time horizon

• Mapping and redefining the underlying processes for those critical capabilities and integrating them into the daily workflow of the company quickly with minimal disruption

• Evolving new network optimization strategies keeping in mind the disruption an event like COVID-19 can have on market and sectoral dynamics

• Simulation of multiple scenarios based on reliable data sources that would help in the determination of the strategic direction taken by the company

• Optimization opportunity exploration at increasingly granular levels to boost overall cost and process efficiencies in addition to discovering new ways to improve customer engagement and customer retention

Short to Medium -Term Time Horizon

Longer-Term Time Horizon

Our Solution andFramework Approach

DATA TRANSFORMATION & MODEL DESIGN

OPTIMIZE & SCENARIO ANALYSIS

BUILD MODEL & BASELINE

RECOMMENDATION & BENEFIT ANALYSIS

CREATE SCENARIOS & RUN THE MODEL

COST MODELLING Baseline Reports comparison with actuals

Identify issues and resolve

Our Framework ModelAs a constituent of our framework model toward designing supply chain networks for Retail and CPG organizations, we offer to deliver a Network optimization project to compare the pre-COVID to post-COVID scenario from a total cost perspective. This assignment is executed for a period of eight weeks, the scope of which includes

Modelling customer’s supply chain network

in llamasoft supply chain guru.

Running network optimization for

baseline (pre-COVID) and post-COVID

scenario.

BI tool (Tableau/ alternate tool) to

interpret and report the result.

Creating conceptual network design for

impact analysis around adding stocking

facilities within new trading blocks.

3

5

4

6

DATA COLLECTION / VALIDATION

Product information Site information & attributes

Supply Network, Lead-times

GlobalTransportation

Customs

Demand

2BUSINESS OBJECTIVE & SCOPE DEFINITION

Stakeholder identification & workshops to finalize objectives and scope of assignment.

Process Experts

Network Planners

SupplyDevelopers

BUSINESS USERS

1

ANALYSE RESULT AND CREATE REPORT

Helping Retailers and CPG organizations build an Agile, Intelligent, and Intuitive Supply Chain

How can our supply chain network redesign help you improve your business outcomes?

A detailed analysis on the impact of COVID-19 on the customer’s supply chain:

- Total landed cost implications

- Supply chain cost breakdown (cost elements: purchasing, transportation, inventory, and custom duties)

Analysis report for ‘conceptual network design’ around inventory positioning within new trading blocks

Our Supply chain modeling decisions typically are taken at three phases as explained below:

Scenario Modeling:

This phase revolves around the creation of a baseline scenario model to analyze the current state of the supply chain and to better understand factors impacting supply chain efficiency.

Data Analysis:

This phase of the supply chain network optimization engagement focuses on integrating retail logistics supply chain data from disparate sources to identify factors impacting supply chain efficiency.

Data Interpretation:

This phase focuses on interpreting data to develop a strategic approach to decision making with visibility into retail logistics processes, network design, sourcing and capacity.

Key Deliverables:

Phase 1: Strategic

Phase 2: Tactical

Phase 3: Operational

1

2

Key Timelines

Timeline Weeks

3

5 6

7

8

4

2

Project Kickoff

Learn the network and set the scope of the analysis

Validation

Validation of data analysis, data synthesization and costs

Conceptual Networks

Create and evaluate the conceptual network alternatives

Recommendation & Deliverables

Final recommendation and deliverable for improvements

Stakeholder Presentation

Present analysis and findings to business

Baseline

Creation of baseline model

Optimize Scenarios

Create & optimize scenarios

Gather Data

Collect and analyze required data

We recommend a simulation framework for testing small changes in parameters. This would result in better decision-making by the supply chain management teams. The simulation framework typically provides the statistical analysis around various KPIs, simulating different scenarios with delta changes at the operational level.

While there are no clear answers to determine the frequency of such an exercise, it is important that companies review their key metrics and goals against existing supply chain networks periodically. Companies can revisit their network periodically, considering changes in business scenarios like new product introduction, changes in demand pattern, regulatory changes and new supply sources so as to better align supply chain networks.

Improved service levels

Reduced cost to serve

Reduced cost of operations

Reduced cost of holding inventory levels

Impact of disruption in the supply base (business continuity, supplier capacity, alternate suppliers) on assets, inventory and transportation costs

Impact of unequal reduction and gradual recovery in manufacturing capacity (labor shortage, regulatory restrictions) on product mix, manufacturing cost, and transportation costs

Impact of unequal reduction and gradual recovery in customer demand (movement restrictions, reduced buying power) on assets, inventory and transportation

Impact of low price of oil on product flow path ( inbound and outbound)

Possible Scenario Mappings with our Solution

BusinessBenefits

Hello there! I am an Ideapreneur. I believe that sustainable business outcomes are driven by relationships nurtured through values like trust, transparency and flexibility. I respect the contract, but believe in going beyond through collaboration, applied innovation and new generation partnership models that put your interest above everything else. Right now 150,000 Ideapreneurs are in a Relationship Beyond the Contract™ with 500 customers in 46 countries. How can I help you?

For more details, please contact CS_Marketing@hcl.com

Success Story 1:

A leading European multinational specialty retailer, with a range of 10000+ products and a network of 4000+ global suppliers and 300+ stores- wanted to optimize its network footprint. Our supply chain management optimization exercise helped them achieving following business benefits:

Success Story 2:

A pharma major holding a diverse product portfolio from low-value density commodity products to high-value density medical devices, had developed a network of co-located warehouses in various countries. Our supply chain management optimization exercise helped them achieving following business benefits

Our Success Story:

Cater to growing online sales volumes

Reduce the operating costs through sustained

logistics footprint

Enable direct delivery from suppliers to stores

Manage current and future growth plans

across geos

Increase in capacities in some of its key

distribution centers

Establish customer-specific service levels

BI-

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