Use back testing technology to test all your supply chain what if scenarios.

1. Redesigning and optimizing a
Distribution Network Strategy

2. What is SOAP Simulation ?
It is a supply-chain simulation tool allowing back testing of
what if scenarios.
One question our system is built to answer:
“What if my future supply-chain distribution strategy was
implemented last year ?”
Run numerous „What if‟ scenarios and get detailed financial
and operational performance reports.

3. Distribution network redesign
A distribution network strategy defines how we move goods to
market, from the suppliers to the customers thru the
company supply-chain network, therefore it need to
constantly adapt to external and internal constraints.
Redesign main drivers
 Mergers and acquisitions
 Business growth or downsizing
 Competitive pressure to increase costs efficiency
 Change in customer service requirements
 New market opportunities
 Change in supply or customer base
 Increase in fuel / transportation costs
 Change in local logistics optimization (pack, size, EOQ…)

4. Distribution network redesign
What are the most encountered question when redesigning a
supply-chain network strategy?
What is our best sourcing What is our best distribution What is our best
strategy? strategy? transportation strategy?
• Should we do direct to store • How many distribution centers?
distribution? (Per family, What size? • For which suppliers should we
category, velocity...) • Where are the best locations? use an integrated inbound
• Should we source to each • which type of product (family, freight?
distribution center or thru a category, velocity, sourcing ...) • Which transportation modes
primary location? • What market should be served by and partners should we use
• When should we do supplier each distribution center? from each site?
cross-docking replenishment? • What is the optimum stocking • How can we consolidate and
• What is the financial impact strategy? optimize our freight?
of the different replenishment • How can we optimize global • What are the best routes for
strategy (Full truck, minimum distribution costs? my shipments
quantity, JIT, Frequency, • How do we reduce working • What strategies can we use
scheduled...)? capital in our distribution network? to minimize carbon footprint

5. SOAP back testing methodology
phase 1 – business assessment
Model Model Detailed
Business Data
baseline alternate result
assessment gathering
scenario scenario analysis
Business assessment:
 Identify supply-chain redesign project‟s scope
 Identify current business model
 Identify key business issues and main drivers
 Identify company strategic vision.

6. SOAP back testing methodology
phase 2 – data gathering
Model Model Detailed
Business Data
baseline alternate result
assessment gathering
scenario scenario analysis
Data gathering
 Develop data gathering requirements
◦ Master data file: Item, Vendor, Customer/Site
◦ Inventory file: inventory count, Movements
◦ Marketing file: Promos, assortments (new items, end of life …)
◦ Tags
 Assessment of data availability and data accuracy.
 Develop test files, data control, validation

7. SOAP back testing methodology
phase 3 – Model baseline scenario
Model Model Detailed
Business Data
baseline alternate result
assessment gathering
scenario scenario analysis
Model baseline scenario
 Construct and simulate baseline scenario, this is the
representation of the current supply-chain business model
 Calibrate baseline model to actual spending, this is a major task
that allow thru a „AS IS‟ simulation run to validate the
correctness of the data and the correctness of the current
business model design

8. SOAP back testing methodology
phase 4 – Model alternate scenario
Model Model Detailed
Business Data
baseline alternate result
assessment gathering
scenario scenario analysis
Model alternate scenario
 Define main alternative group of scenarios to evaluate
 Construct and simulate alternative scenarios
 Compare alternative scenarios simulation results

9. SOAP back testing methodology
phase 5 – Detailed results analysis
Model Model Detailed
Business Data
baseline alternate result
assessment gathering
scenario scenario analysis
Detailed results analysis
 For each group of scenarios provide detailed financial report
 For each group of scenarios provide detailed operational report