04 Mar Increasing Logistics Complexity Requires Greater Optimization
Today’s supply chains are so complex and change so rapidly that optimization efforts often are overtaken by events, says Mike Comstock of Grand Canal Solutions. Planning needs to become much more dynamic, with analytics adapted to make optimization a continuous process, he says.
The complexity of today’s logistics is overwhelming many companies, says Comstock, senior vice president for customer success at Grand Canal Solutions, which offers a cloud-based supply-chain analytics platform called Optimize.
The difficulty with supply-chain optimization until now has been that access to manufacturing and carrier data has not translated into a good overall view of the interrelationship of all different data sources, Comstock says. “These data sources are so disparate it has been very difficult to see the big picture. By using analytics, we are able to look at the total cost to serve, end to end. Then as we model different approaches and different service levels, we can see how that cost to serve goes up or down. I think more and more companies have to be looking at this because the markets are changing so rapidly,” he says.
Comstock says he frequently has noticed that companies make changes and institute processes to address a specific problem, and think they are done. “But the next month everything has changed,” he says. “So you really need to constantly look at your analytics, to constantly look at your costs and service levels because these things constantly change. Even if your business is running at a steady state, there may be changes in the marketplace that afford you better alternatives than when you optimized last time.”
Maintaining stable operations while continually optimizing is a balancing act that companies will need to master, Comstock says. “At any point along the way, no company will ever be fully optimized; there always will be areas of sub-optimization. But the idea is to look at the net effect of current operations compared with a reliable model of what could be, then to actually change and invest in an alternative approach with better payback– not only in money, but in service level and quality,” he says.
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