Leveraging technology in supply chain logistica12

Logisticia ’12

18th September 2012

(A certified IBM partner)

Ph: +91 98406 18472/ +91 44 4501 8472
Email : optimize@optiriskindia.com
Web: http://www.optiriskindia.com
© 2010-12 OptiRisk India (P) Ltd, All rights reserved

Bala. Padmakumar
Director & CEO
OptiRisk India

1. Introduction
2. Supply Chain Network Design
3. Transportation Planning
4. Solution Architecture


2

Math

+

Science

+ Common Sense

=

Technology

Products/Service
Meet

Need

Analytics
Math

Operational
Research


Predictive
Analysis
Optimization

3

Raw Material

Supplier

Manufacturing

Warehouse

Retail Outlet

Consumer

Acquire, transport, produce, distribute to meet certain need of customers.


4

help companies
achieve More (Benefits) with Less (Resource)


5

Strategic

Long Term

1+ years

Supply Chain Network Design
Resource Acquisition

Tactical

Medium Term

Monthly / Quarterly

Production or Distribution Planning
Resource Allocation

Operational

Short Term

Weekly/ Daily

Transport Planning and Scheduling

Resource Scheduling


6

1. Introduction


7

Identifying the locations and capacity of plants and warehouses to meet the
demand, which reduces overall operating expenses from end-to-end.

8

Demand Centers
Location
Quantity
Change over time

Costs
Labor
Materials
Facilities
Transport
Inventory
Taxes and Tariffs

Constraints
Capacity
Local Infrastructure

Input

Plant and Warehouse

Output

Numbers
Location
Capacity
Capacity change over time
Supply demand mapping

What-if Analysis
Risks
Natural Calamities
War
Oil Crisis
Exchange Rate
Regulatory Changes
Employee Relationship

9

Software GUI *

MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU
MANU

MANU
MANU
MANU

*Courtesy : IBM ILOG LogicNet+

10

XE

: The client is one of the largest providers of ‘Building Products’
(roofing & interiors) in India.

: Due to lack of high-level supply chain visibility, plan and
policy, the company resorted to “Ad-hoc”/manual order fulfillment process from
different warehouses & plants to agencies, which caused higher overall logistics
cost (transport, warehouse, taxes)
As the demand was growing fast, the client wanted to identify new warehouse &
plant locations and their capacities to optimally meet the future demand at the
least cost. Furthermore, they needed to realign the supply linkages so as to
maximize plant capacity utilization and rationalize inventory levels across
warehouses.
The client also wanted to understand the impact of the proposed Goods & Services
Tax (GST) on the existing and proposed Supply Chain Network.


11

What we Delivered
OptiRisk developed SCN model
suggested reconfiguring order delivery
to reduce out-bound transportation
cost, overall taxes, and inventory level.
In addition, it suggested potential
warehouse locations, plants, and their
optimal capacity for future growth. At
the end, "what-if" analysis is done to
study the impact of proposed Goods &
Services Tax (GST) on the existing and
proposed Supply Chain Network.

Key Benefits
 17% saving on out-bound
transportation cost + taxes
 Reduced inventory
 Reduced delivery time
 Reduced capital requirement
 Reduced carbon foot-print
 Increased service level
 Payback in a couple of months
 ROI : 1: 70 times.


12

Existing Supply Linkage

Optimal Supply Linkage


13

1. Introduction


14

Customers

Manufacturing
Spare Parts Logistics

Key Questions
How many trucks to use from the set of fleet and
from which carrier?

Which shipment option to use for each order?

Which customer /vendor should be served by each truck
and in what sequence?

Are there ways to reduce cost and still maintain/ improve service level?


16

Should the company buy (or) lease (or) rent trucks?

What-if the truck capacities are increased/decreased?

What would be the impact of fuel price change to logistics cost?

What-if alternate transportation options are used?


17

Software and What It Does for YOU
USE OPTIRISK / IBM SOFTWARE to get Optimized Vehicle Routes

Software used custom OR models + CPLEX solver.
Software is customized to YOUR CLIENT+BUSINESS needs.
Software helps client to achieve :
Reduced fleet travel distance / time / cost (5 to 30% saving)
Faster Customer-Response-Times (Optional)
Extra Carriage Capacity with same fleet (3 to 10% saving)
Improved Stakeholder Satisfaction Levels
Significant Planning Man-Hours Saving (70% to 90% saving)
Helps in long Term Planning

18

On-Time Delivery

Increased Visibility
Greater visibility and control
Increased Planning Productivity
Enabled Employees

Reduced Stock-outs
Improved Service Level
Satisfied Customers
Increased Business

Optimized Delivery Routes

Ease of Use

Fewer Fleet requirements
Lesser driving distance / time.
Lower cost & Investment
Increased ROI

Visual Displays
Ready to print customized reports
Visual Performance dash boards
for KPI tracking

Payback in months
Less than six months
ROI 1: 30 to 70 times
(in 5 years)


19

Shareholder Value

ROI
Profit

Investment

Cost

Revenue

Less mileage

Business

(10 to 30% )

# Trucks

Service Level .
Planning
Errors

Lead time


(5 to 10%)

20

OptiRisk Route Planner & Scheduler Studio (ORPSS)


21

The client is one of the multinational fuel distribution
companies having wide presence in India.

The aim was to develop a automated planning
tool which would reduce total cost incurred on out-bound logistics

23%+ reduction in total out-bound delivery transport cost.
Total planning time is reduced to minutes.
Payback of investment was less than a month
Improved service level and increased customer satisfaction.


22

1. Introduction


23

Other RDBMS
Database DB2

Top Management

.
.
.
.

Intranet

Web Server

Firewall
External
Router

SPSS Server
(Optional)

Planning & Execution
Staffs

Optimization
Server
Dealers

Internet
External Data Server
(Optional)

Suppliers

24

Bala. Padmakumar
Ph: +91 98406 18472 / +91 44 4501 8472
Email: optimize@optiriskindia.com
Web: http://www.optiriskindia.com/

Asia Pacific, Africa, Australia & Middle East :

Europe & America :

No 12, Ground Floor, 25th Cross Street
Thiruvalluvar Nagar, Thiruvanmiyur,
Chennai - 600041, India.

OptiRisk R&D House One Oxford Road,
Uxbridge Middlesex, UB9 4DA,
United Kingdom.
25

Leveraging technology in supply chain logistica12

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