9-Step Analytics Methodology to Transforming Your Supply Chain

Applying analytics to solve operations and supply chain problems requires domain knowledge, technology and process. We have developed a 9-step methodology to guide you through this process.

1. Define the problem and plan – First, we determine the supply chain or operations problem the company is facing. Then, we decide on the best approach.
2. Create a baseline model – model of the company’s network. This involves mapping the locations of suppliers, manufacturers, Distribution Centers and customers. Then we took a look at various variables such as orders, supply, capacities, inventory, transportation etc.
3. Validate the baseline model –  We check the model in two steps. Step 1 involves comparing the baseline with historical inventory data and the difference in fill rate based on the model’s inventory. In Step 2, the model uses past fill rates and inventory levels to find areas with low inventory. This step helps identify which facilities have issues and where the model has gaps.
4. Quantify key drivers and quick wins – From the model, we can see that several improvements can be made just by optimizing the current model and without making any real changes.
5. Identify and Create Scenarios –  In this phase, we make a list of scenarios to analyze by interviewing executives at the company and running a workshop to determine the problems they are facing.
6. Optimize the Scenarios – Run an optimization of the scenario models and find the various costs, drivers and characterteristics of the solutions.
7. Consolidate and iterate – Once the basic issues are determined, devise several scenarios to see what is driving the problems in the supply chain.
8. Drive Change –   By determining the true drivers of supply chain behavior and cost, you can treat the root causes.
9. Create a Repeatable Process – You need to be able to do the same analysis once there are changes in operations either by design or not. You need the capability to build and analyze models on an ongoing basis.