2017 Supply Chain Network Design Industry Report

What are companies looking for in Network Design Technologies?

Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

About this Report

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About AIMMS

About Supply Chain Insights

Companies want to maximize service levels, but they also want to cut costs. These goals are often at odds with one another. How do you find the optimum balance? That's what Supply Chain Network Design is all about. The world's most profitable companies have built their success on an effective and responsive supply chain network. But achieving this is easier said than done. Supply chain networks are becoming increasingly complex and available tools are often too rigid and difficult to use.

The purpose of this study is to understand the value proposition of supply chain network design technologies, including user satisfaction and key benefits and barriers to using these technologies. The study is based on an online survey conducted by Supply Chain Insights. It explores what 110 professionals think about the network design process and available technologies to support that process. The majority of respondents are based in North America and Europe and they hold mostly director-level and managerial positions in supply chain.

AIMMS is a forward thinking platform provider democratizing the use of supply chain analytics so everyone is self-enabled to make better decisions.

Founded by Lora Cecere, Supply Chain Insights is focused on delivering independent, actionable and objective advice for supply chain leaders. Research is at the center to help understand supply chain trends.

5 Key Takeaways from this Report

Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

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Poor data quality and lack of skilled resources are the most common challenges for SC network design

Spreadsheets are still the most commonly used technology for this purpose, but they have several limitations

Most respondents value configurability over standardization in network design technology

Better decision making and cost savings are the biggest drivers for network design

Technology prices, speed and usability often fail to meet expectations

Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

Nearly Three-Quarters Have a Supply Chain Network Design Process, with 35% Using In-House Technologies

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Network design as a discipline is complex. You need technology to crunch the numbers, manage the data and run optimization models for decision support.

The majority of survey respondents (72%) have a network design process in place. Half of them are already using technologies, 35% of which are deployed in-house.

Traditionally, network design technologies have been used on a project basis. Recently though, we have seen a move from strategic to tactical use, with companies running models on a quarterly, monthly or even weekly basis. This has resulted in a need to build up internal skills in the form of a dedicated team or center of excellence.

Survey Population

(Manufacturers,retailers,

distributors, 3PLs)

72% have a process

50%use technology

35%use in-housetechnology

Only 19% of Those with a Supply Chain Network Design Process Rate It as Very Effective

Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

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Out of the respondents whose companies already have a network design process in place, only 19% would rate it as "very effective." The vast majority (44%) rate it as "somewhat effective" and 22% rate it as "not very effective," indicating that there is certainly room for improvement. What's getting in the way?

Data Quality is a Top Challenge for Supply Chain Professionals

Poor data quality is the most common challenge cited among respondents with a network design process in place.

Network design is a data-hungry ordeal. Models need quality data to provide optimal answers and being able to work repeatedly with data is key. Practitioners need to leverage not just ERP data, but data from a variety of other sources as well.

Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

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Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

Lack of Skilled Resources Is Top Challenge for Those with Process AND Reason for Not Having a Process

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The lack of skilled resources is the second most common obstacle, cited by 30% of respondents with a process in place and 58% of those without a process in place. The majority of network design practitioners are managers, not data analysts. As such, they don't want to depend on consultants or undergo extensive training to use a particular tool. Finding talent to progress from simple to more complicated models is also becoming increasingly difficult.

Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

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Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

Spreadsheets Are Still The Most Common in-House technology

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65% of respondents are using spreadsheets for SC network design purposes. Using spreadsheets is convenient, as they are inexpensive and familiar. But the more com-plex the network, the harder it is to make them work. They are also unsustainable. If the person who initially created the spreadsheet leaves the company, it’s often harder for other users to understand the built-in logic.

In Respondents’ Own Words:

Spreadsheets are flexible to adopt new changes, but high volume of data slows down the PC considerably. Attractive from a cost perspective, simple to use, but handles only a few variables and cannot optimize.

Everyone knows how to work with Spreadsheets, however you only get limited insights, only easy to use for tactical decisions, a comprehensive view is missing.

Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

The Ability to Configure While having a Standardized Technology is Highly Desired

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55% of respondents prefer configurability. Only 11% prefer standardization. Out of the box technologies are feature-rich but often cannot accommodate unique constraints faced by the business. It's also harder for users to understand the model output with off-the-shelf tools, as they lack transparency into the underlying technology.

Learn from the best:

Claire Johnson, E2E SC Strategy Development at Marks & Spencer

"Self-enablement allows us to create the models we need to answer any question that arises at any time. It gives us flexibility and control. We can ask and answer as many questions as we want to because we have control of the model and we can change and develop those models to address new questions that come up from a strategic point of view."

Watch the full video

SC Network Design Technologies are Expected to Result in Better Decision Making and Cost Savings

Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

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What are respondents hoping to get from supply chain network design?

Perhaps unsurprisingly, 68% expect better decision making, as network design decisions often involve hefty investments. 60% of respon-dents expect to see cost savings by following a network design process.

Expertise and Lack of Skills in-House are primary reasons for hiring a Consultant

How often do respondents rely on consultants?

28% of them indicated that they need a consultant's expertise and 17% lack internal skills to do the work. But with increasing complexity across the supply chain, more companies are starting to invest in their own technology and skill set.

Supply Chain Network Design Industry ReportSource: Supply Chain Insights LLC, Supply Chain Network Design Study (Aug. – Sep. 2017)

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Greatest Performance Gaps are in Price, Speed, Implementation Time and Import / Export Data

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When it comes to expectations vs reality, the biggest gap is the price. 84% of respondents want an affordable network design solution, but only 54% of them thought available tools meet their price expectation. Ease of use, speed and data exchange are also becoming increasingly important.

Take action:

Chris Gordon, Product Lead SC Navigator at AIMMS

"With new questions popping up every day, you need more answers. We think that supply chain software can and should be more affordable and easier to use. It's not about having bulky software with an endless list of features and functions that you will never use. It's about having agile software that is intuitive and highly configurable that provides you with the answers you need by leveraging sophisticated analytics."

Watch the full video

AIMMS SC Navigator™ is the supply chain platform that's challenging the status quo

We've heard you loud and clear. Supply chain professionals are looking for a fresh approach to modernize supply chain decision making. The findings from this survey have led us to develop AIMMS SC Navigator, a product dreamt up by our team with the lofty goal to democratize supply chain analytics. AIMMS SC Navigator is built on the following guiding principles to help today's overloaded supply chain professionals:

Technology that fits the skills of your existing SC team

Standard and highly configurable while retaining the power of mathematical optimization

Data clarity & data re-use

Real transparency so that your users can trust the technology

A realistic path to enhance the skills in your team

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AIMMS SC Navigator can be used by your entire team, you don't need to be a math whiz or technical expert.

Our built-in wizard offers a unique guided experience that makes customizing your App as easy as answering a survey. The AIMMS Prescriptive Analytics Platform, our underlying technology, has been honed for over 25 years. So you can get sophisticated analytics while retaining usability and speed.

We think it’s time to stop focusing on making your data work for a technology. That’s why we enable you to use a comprehensive and robust supply chain data set with the help of a wizard that tells you exactly which data you need to answer the questions you have. That same database can also be used to feed Apps for a multitude of other areas.

We offer a glass box approach with access to modeling logic so you can always see what's behind the models.

We want to self-enable companies to improve their strategy and operations and have designed a training program to help you build up the capabilities you need to achieve this internally.

Flip the switch! Find out what new network design capabilities can do for your team

www.aimms.com/demoemail: info@aimms.com | call: +31 23 5511 512 (EMEA) +1 425 458 4024 (NA)

One platform, multiple configurable Apps, infused with the power of sophisticated analytics, so you can self-enable your entire supply chain team

Data Navigator

S&OP Navigator

Network Design Navigator