Resiliency is critical to an effectively constructed and balanced supply chain. Scenario modeling empowers you to intentionally create supply chains that can withstand even the most disruptive events.

Optilogic leads the way in scenario modeling for supply chain resilience. Read on to discover how scenario modeling can revolutionize how you think about supply chain design and planning.

Understanding Design and Strategic Planning in Your Supply Chain

Design and planning are nuanced, specific terms within the supply chain industry. There are clear differences between supply chain design and supply chain planning.

Your design considers the whole network: where you source, manufacture, and distribute; customer location; and how you service them best. The overreaching network of your supply chain is your design.

Planning allows you to profile supply and demand patterns based on real and relevant data. Planning creates an efficient plan and the steps you’ll take to meet consumer needs.

Both design and strategic planning involve scenario modeling, and both are required to create effective, resilient supply chains.

What’s the Goal of Scenario Planning?

Running scenarios allows your organization to visualize and evaluate options within your supply chain. Adding or removing constraints within various scenarios gives you access to data that helps you understand the cost, risk, and service outcomes that help guide your decision-making.

Scenario planning gives you a high-level, strategic, forward-facing view of your organization. Instead of relying on historical data, following competitors’ trends, or allowing instinct to inform your choices, scenario planning provides relevant data that drives your organization forward.

Companies run scenarios for many reasons. Here are just a few:

1. Right-shoring Overseas Manufacturing Options

Offshore supply chains have been standard for decades. But with recent global disruptions, manufacturers are rethinking their practices, especially to mitigate China’s supply chain issues. Specifically, businesses are bringing manufacturing closer to their customer base.

2. Expansions or Contractions

If a company is expanding or contracting, they need to know all available supply chain options. Where can they optimize manufacturing and warehousing space? Are there consolidated transportation options that reduce emissions while delivering on service?

3. Taxes and Duties

When you flow products from various locations, you must understand how taxes and duties impact your total cost-to-serve, and thus, your revenue. Scenario planning allows you to determine the best routes for product transport, helping you avoid taxes and duties while achieving an exceptional customer service level.

4. Mergers and Acquisitions

Mergers and acquisitions present opportunities to capture new audiences, but the process is rarely seamless. Even complementary companies bring different –– and often conflicting –– supply chains to the table. They need a clear path to consolidate their existing supply chains.

5. Last Mile Service

Thanks to Amazon’s two-day delivery (and now, same-day delivery), consumers expect near-immediate access to their purchases. Organizations are constantly working to bring their product closer to the last segment of their distribution. Scenarios help you solve for your last mile strategy to ensure fast delivery regardless of customer location.

6. The Power of Two

The uncertainty and volatility of supply chains have birthed the idea of “the power of two”. That is, companies don’t want one source for their products or manufacturing. Instead, they approach their supply chain with a built-in risk system with more than one source or node: the power of two.

Consider the power of two in manufacturing. By employing two locations for manufacturing, companies have a backup plan in case of an event that halts production at one facility, such as a fire, natural disaster, or unforeseen supply chain disruption. If something happens to location A, you can still utilize location B to manufacture the same products. Scenario planning helps organizations diversify their supply chains to operate with a power of two mindset, reducing risk and building in a redundancy in your network.

Each time you run a scenario, you look for ways to optimize the supply chain and decide which choice is right for your organization. Scenarios allow you to optimize for cost, customer service, risk, and other business objectives such as sustainability.

How Do You Get Started with Scenario Planning?

Optilogic builds a cloud-based digital representation of your future supply chain. This model understands the nodes of your supply chain (sourcing, manufacturing, distribution centers, and logistics lanes) and models the high-level constraints of each facility. Our models analyze your volumes, flows, inventory, transportation, and processes.

Once we’ve built a digital representation, you can ask questions of the model:

What if we combine facilities? What if we shut down a particular facility? What if we open a facility in a new location? Asking the “what ifs” of your organization helps you optimize your supply chain to run your business more effectively.

How Scenario Planning Helps Build Supply Chain Resilience to Risks

As you explore various scenarios for your organization, you’ll likely find an imbalance among conflicting objectives. Scenario planning aims to create a balance between cost, service, and risk.

For example, you can adopt a nearshoring strategy to move production facilities to Mexico, reducing manufacturing costs. However, with a Mexico-based location, you may encounter border restrictions or closings or find that your manufacturing facilities are too far from your distribution centers.

Scenario planning exposes these weaknesses and imbalances and provides the data you need to execute resiliency and risk planning that serves your organization for the short and long term.

Scenario planning is essential for your organization. Proactively identifying risks empowers you to prepare for disruptions and avoid the consequences of supply chain shutdowns. Risk resiliency ensures your production remains as streamlined and profitable as possible, delivering quality products to consumers on time.

Why Use Optilogic for Scenario Planning?

Your scenario planning is crucial for an optimized supply chain. But all scenario planning platforms and technology are not created equal. Optilogic differentiates itself with these offerings:

1. Cloud-Native Technology Runs 40% Faster than Competitors

Because we’re the only cloud-native supply chain network design solution, our platform is scalable and provides actionable data for your organization. Unlike past desktop-based programs that took days or weeks to solve for various scenarios, our SaaS approach delivers scenario planning in a fraction of the solve time. Cosmic Frog runs 40% faster than competitor solutions. Hyperscaling enables users to run tens to hundreds of scenarios in parallel, saving even more time.

2. Risk and Resiliency Factors

We’ve uniquely incorporated user-defined risk profiles into our supply chain network design models, delivering the ability to solve for risks and optimize resiliency. Risk is a vital yet often overlooked factor in supply chain planning. Optilogic ensures you’re aware of possible risks and provides options that solve for these issues.

3. Simulation

After running various scenarios, you can choose a scenario and use granular data to simulate how specific choices and paths affect your entire supply chain, given real-world variability.

Supply chain simulation requires significant horsepower that we can deliver through our SaaS approach.

4. Run Hundreds or Thousands of Sensitivity Scenarios in Parallel with a Single Click 

Sensitivity analysis is an important part of the supply chain design discipline, allowing users to understand how robust a scenario is when variables change. 

With Cosmic Frog’s Sensitivity at Scale, sensitivity scenarios are automatically created and then “hyper-scaled” on Optilogic’s SaaS platform, running many hundreds or thousands of sensitivity scenarios in parallel. 

Building Supply Chain Resiliency with Scenario Modeling through Optilogic

Optilogic’s scenario modeling tools provide innovative pathways to optimize your supply chains for cost, service, and risk. Our solutions empower you to design and plan a balanced supply chain for your organization’s unique needs.