Supply Chain Modelling for Manufacturers
Barloworld Supply Chain Software offers strategic network
design, optimisation software and supply chain consulting services
to leading manufacturing organisations in all of the major consumer
markets across the globe. The flexibility of the CAST Aurora supply
chain network modelling software and its ease of use ensure a
seamless application across all manufacturing industry sectors and
geographies, where there is supply chain complexity. This normally
includes multi-tiered manufacturing, warehousing and multi-mode
transportation options.
In particular, leading global consumer goods manufacturers such
as Colgate Palmolive, Coca-Cola Germany, Unilever and SAB Miller,
not only use the CAST software to identify the optimal warehousing,
transportation and inventory mix within their country supply
chains, but also to optimise their manufacturing, production and
sourcing capabilities.
Our manufacturing clients have used CAST to evaluate the cost
benefits of moving manufacturing from the US & Western Europe
to low cost manufacturing bases in Asia and Eastern Europe. Whilst
they may benefit from lower manufacturing costs, such a strategy
inevitably generates longer, more variable lead-times into the
country of consumption and has significant implications on
resulting inventory levels in the network.
To remain competitive, companies must now not only consider the
domestic supply chain of warehouses and carriers but also the
choice of entry port, along with the associated infrastructure
capacities, handling charges and international shipping rates. The
extension of the global supply chain means that manufacturers must
also look at the opportunities for freight and container
consolidation within the country of origin and the choice of exit
port. Globalisation brings greater opportunities, but also greater
complexity thereby raising the need for supply chain planning tools
and software that can take into consideration all of these micro
and macro elements.
Supply Chain Planning in Developing Markets
Increasingly, manufacturers are not only looking at developing
markets as a source for low cost manufacturing, but also as rich,
domestic consumer markets with increasing disposable income.
Subsequently, there is significant demand for the services that we
can offer to establish the optimal supply chain configuration in
dramatically changing markets such as China, India, Russia and
Brazil. As the local logistics infrastructure improves and matures
in these countries, the opportunities for centralisation of the
supply chain infrastructure (as has already happened across the US
& Europe) increases.
Reducing Supply Chain Costs
A study for a high-tech consumer product manufacturer in China
looked to optimise an existing 50+ Distribution Centre (DC)
configuration for the country. This high DC configuration was
largely driven by a 4 hour service commitment. Assessment of the
historical situation revealed that this service was sometimes
missed due to the right SKUs (Stock Keeping Units) rarely being
available in the local DC. We recommended centralisation of the
slow moving SKU's from all DC's to two central DCs and the adoption
of a next day delivery service. This analysis identified a
potential 80% reduction in the network safety stock level for the
proposed centralised SKUs.
A CAST software study for a leading chemical company aimed to
review and rationalise their global caustic soda supply chain. The
current supply chain of international caustic soda production
plants, storage terminals and multi-mode transportation legs was
accurately modelled at an operating cost of US$135 per annum.
Through a series of optimisation scenarios, CAST software outlined
significant opportunities for storage terminal rationalisation,
optimal production sourcing and demand allocation as well as the
optimal selection of competitive transport modes and carriers by
lane. The study identified a potential total of US$30 million
savings, of which US$ 7 million had been realised within 12 months
of completion of the study.
A CAST software study for a manufacturer in the US evaluated the
benefits of stocking Asia sourced products, (currently held
exclusively in a California DC), in their Texas DC in order to
assess the opportunity for freight consolidation, by merging it
with the product sourced from Mexico, held exclusively in their
Texas DC (and vice versa).
Working at the shipment level, CAST software combined the
Mexican and Asian sourced shipments together from either DC to
achieve a more efficient drop size and reduce the number of
outbound deliveries, where historically they had gone into the same
customer location on the same delivery day but from different DC
locations. The reduction in outbound deliveries, the associated
increase in LTL (Less than full Truck Load) shipment sizes and the
move up from LTL size shipments to FTL (Full Truck Load) shipments,
resulted in an 8% overall reduction in supply chain costs, when
balanced against the increased inbound costs to the DC's required
to ship all products from both DCs.
Customer Quote
"On first viewing we felt that CAST would address our needs, and
our experience has confirmed that view. The software is
exceptionally user-friendly and flexible. We have been able to
achieve all we planned to do, and more. It took a couple of months
to become proficient in using the software, but now we are able to
model one region of our operation in approximately one fifth of the
time that we needed previously."
Anthony Briggs, Distribution Development Manager,
The South African Breweries Limited