you have objectives but no strategy.
Identifying a strategy everyone can agree on is important.
That’s because focusing the multiple functions on a single,
universally agreed-upon strategy is more likely to bring success than having the organization begin work on multiple,
possibly conflicting, initiatives in parallel.
You and your group probably will have many ideas about
what the strategy should be. But in order to effectively evaluate the various options, you should use supply chain design
tools, also known as network modeling software. This software makes it possible for managers to model, simulate, and
fine-tune many different supply chain strategies. Senior managers can then assess each one in terms of costs, benefits, and
difficulty of execution. Once they have identified the workable
strategies, they can prioritize which ones to implement first.
These network modeling tools are especially good for
designing multiechelon supply chains—that is, supply
chains that comprise suppliers’ warehouses, manufacturing
plants, and central, regional, and local warehouses. Skilled
users of the software can determine the optimal number of
warehouses in a network—and where they should be located—to minimize total supply chain costs. (Note that you do
need skilled users who can accurately estimate the costs of
new transport lanes and warehouses in different regions.)
In addition, the tools calculate the minimum total inventory investment needed for the new supply chain in light of
leadtimes, required service levels, and forecast uncertainties. Good tools also identify the products that should be
held only at the primary distribution center (DC) and those
that should be stocked at both primary and secondary DCs.
