An organization’s supply chain is foundational to day-to-day and long-term operations. Intentional and strategic supply chain design empowers businesses to understand how to operate most effectively, efficiently, and intentionally to hit target KPIs and meet various organizational goals.  

Supply chain modeling provides visibility and insights into your current and future-state supply chain and allows companies to create scenarios to analyze the trade-off between financials, service, and risk. 

However, supply chain modeling can be intimidating, especially if it’s never been a priority within an organization. As a result, many businesses don’t consider the nuances of their supply chains or how modeling can help them make data-driven decisions that promote their success.  

This article explores supply chain modeling and provides tips for getting started. Don’t put off supply chain modeling. It will transform how you think about–and execute–supply chain design.  

Let’s jump in.  

Why Supply Chain Modeling is Essential

Your supply chain affects every aspect of your organization. From location to delivery and every step in between, your supply chain is your business. Modeling is the most effective way to ensure you define, create, and execute a good supply chain for your organization.  

Modeling allows you to explore all the “what if” questions about your supply chain. You can manipulate every factor in your supply chain to ensure balance, creating resiliency that protects your organization from supply chain disruptions and provides various avenues for you to operate at peak efficiency.  

The importance of a robust supply chain cannot be overstated, and neither can supply chain modeling. Read on to learn how to get started. 

First Steps of Supply Chain Modeling 

Embarking on a supply chain modeling strategy requires intentionality. You won’t drift into results-driven supply chain modeling. Below, we outline the best first steps for getting started with your supply chain models. 

 

1. Identifying a Champion within the Organization

Organizations must create a solid foundation for their supply chain modeling. Identifying and assigning an executive sponsor is the first step to creating a solid supply chain. Your executive sponsor will support the efforts, fund the actions, and be a champion for the work within the business. 

2. Prioritizing the Initiatives

As organizations embark on supply chain modeling, there’s an endless list of questions to ask and potential models that can be built.  

You must understand the expected value of a project or initiative and the time it takes to develop the initiative to inform the questions you ask of the model. Consider the potential achievable value and the time you have to achieve it. From there, look for quick wins and choices or avenues that can achieve value quickly.   

3. Assigning the Right People and Skills to Your Team

Identify the right people in the organization to execute your supply chain modeling. This team needs to have the skills and talent to manage your supply chain tasks. Most businesses must invest in skills training to ensure all contributors have the knowledge and capability to handle supply chain modeling needs.   

Supply chain initiatives often require cross-functional alignment across various departments within your organization. Establishing your team and investing in skills training ensures your supply chain strategy and modeling practices deliver the results you’re looking for.   

Many companies will take the next step and build a supply chain design center of excellence.  

4. Collecting Data

Collecting data is the first step in creating your initial supply chain model. However, data collection can potentially transform into a never-ending search for perfect, complete data sets. The relentless pursuit of perfect data will slow your organization down, and it’s unnecessary to begin modeling for your supply chain.  

Collect data that’s readily accessible. Find available data, gathering as much as you can as quickly as possible. You’ll likely have gaps in your organizational data. If and when that happens, make educated decisions based on historical or sample data so you can promptly begin modeling.  

If you look for perfect data, you’ll waste time. Collect what you can then move forward.   

5. Establish a Functioning Baseline Model

Once you’ve completed the initial steps to establish a foundation for supply chain modeling, you can create your baseline model.  

This may be the first time you see your supply chain come to life outside of spreadsheets or a scribbled drawing on the whiteboard.   

You can now visualize your supply chain by seeing all of your nodes and flows on the map. You will see the locations of your customers, distribution centers, plants, and factories, as well as business rules that govern flows between those nodes.   

You can automatically calculate and quantify important metrics for this baseline supply chain including total cost, revenue and profit. The baseline scenario confirms existing flow and business relationships in the model, aligns cost calculations with reality, and provides a starting point for key metrics.     

6. Run Various Scenarios

Once you’ve established the baseline, it’s time to test and run scenarios.  

You should expect and prepare to run many scenarios and tests. Some will work, bringing you closer to your optimal supply chain, and some won’t. Asking various questions of your model gives you a more complete, high-level view of your supply chain, empowering you to balance service, risk, and cost at every juncture.  

Optilogic’s platform supports and facilitates this high-volume scenario modeling. Utilizing our cloud-native platform, you can hyperscale to run hundreds of scenarios simultaneously, exploring virtually unlimited supply chain options while balancing cost, service, and risk.  

Cosmic Frog network optimization runs 40% faster than competitor solutions, making your network design process even more efficient. 

The more testing and modeling you run, the more insights you can access that drive decisions for your organization. You can then market your success internally based on the value those models identify. Internal marketing campaigns will build support for the next initiative, garnering more support, funding, and people for your projects. 

How to Build Your First Supply Chain Design Model

Supply chain modeling is essential for your organization to operate efficiently and effectively, balancing various factors to meet your established KPIs.  

Optilogic’s Cosmic Frog simplifies supply chain modeling. Our platform gives you everything you need to build supply chain models in the cloud. Follow Cosmic Frog’s five steps to get started with supply chain modeling:  

1. Create your free Cosmic Frog account
2. Create a new model, or select from a template
3. Upload your data, or use our test data
4. Build your baseline and run scenarios
   
5. Analyze and share scenarios with your teams

As your initiatives grow, you need technology that delivers a comprehensive analysis that allows you to evaluate financials, service, and risk, understanding the trade-offs between these factors and how best to balance them within your supply chain.  

Regardless of your experience with supply chain design modeling, Cosmic Frog simplifies the process, helping you create accurate, data-driven models that provide the insights you need to make the most of your supply chain design.  

Get Answers to all Your What-If Supply Chain Questions

Effective supply chain design happens when you model supply chain scenarios to explore options for your organization. The Cosmic Frog platform runs multiple models synchronously, providing results faster and more accurately than any other technology on the market.  

Our team delivers solutions that provide real answers to your what-if supply chain questions. Our three-in-one design uses optimization, supply chain simulation, and a risk engine to provide insights that guide intelligent, sustainable, robust supply chain network design.  

Sign up for a free account and try the future of sustainable, resilient, optimized supply chain network design with Cosmic Frog.