Leading Through Supply
Chain Design Excellence
Logistics Summit & Expo
Mexico 2014
© 2013 LLamasoft, Inc. All Rights Reserved
Agenda
Quick Introduction to LLamasoft
What is Supply Chain Design?
A Historical Accident vs. Engineered Reality
Supply Chain Design: Competitive Advantage• What is my Supply Chain Design Maturity Level?
• Closing the GAP
• The COE Imperative
Found Money in Jacket Pocket
Q&A
© 2013 LLamasoft, Inc. All Rights Reserved
LLamasoft Overview
• Develop their own capability for supply chain
design excellence
• Optimize their end-to-end supply chain
operations
• Reduce corporate risk and identify major cost
savings
• Perform continuous what-if analysis
• The global leader in Supply Chain Design
technology & solution services
• Focused 100% on Supply Chain Modeling &
Scenario Analysis
• Headquartered in Ann Arbor, MI with support
centers around the world
• The ideal partner for 1000s of companies to
excel in supply chain design globally
Who We Are
We Empower Companies to
© 2013 LLamasoft, Inc. All Rights Reserved
Recognition and Qualifications
Deloitte Fast 500
Gartner “Cool Vendors”
Pro’s to Know
Supply Chain Top 100
Clients include:
Largest global retailer
Largest company by revenue
Largest military supply chain
Largest public health initiative
30% of Fortune 100 supply chains
Supported More Than
1,500SC Design Initiatives
66% of Gartner’s
Supply Chain Top 25
© 2013 LLamasoft, Inc. All Rights Reserved
LLamasoft Industries
Automotive / Industrial Manufacturing Consumer Goods Defense
Hi-Tech / Electronics Food Beverage
Life Sciences Grocery Logistics
Apparel Manufacturing Petroleum
Public Health Retail Chemical
© 2013 LLamasoft, Inc. All Rights Reserved
LLamasoft Office Locations
Toronto
Ann Arbor
Mexico City
Bogota
Sao Paulo
Capetown
Sidney
Shanghai
Stockholm
ZurichLondon
© 2013 LLamasoft, Inc. All Rights Reserved
LLamasoft Customer Locations
Toronto
Ann Arbor
Mexico City
Bogota
Sao Paulo
Capetown
Sidney
Shanghai
Stockholm
ZurichLondon
© 2013 LLamasoft, Inc. All Rights Reserved
LLamasoft Timeline
• 35% of Budget Invested in R&D• 20+ PhDs in our Applied Research Team• 60+ Staff in our Development Team• Over 80% global growth last 4 years
© 2013 LLamasoft, Inc. All Rights Reserved
Agenda
Quick Introduction to LLamasoft
What is Supply Chain Design?
A Historical Accident vs. Engineered Reality
Supply Chain Design: Competitive Advantage• What is my Supply Chain Design Maturity Level?
• Closing the GAP
• The COE Imperative
Found Money in Jacket Pocket
Q&A
© 2013 LLamasoft, Inc. All Rights Reserved
What is Supply Chain Design?El Concepto
Design
Es el conjunto de estructuras, condiciones,
y políticas que caracterizan una cadena de
abastecimiento, las que constituyen su diseño.
El diseño de cadena de abastecimiento es útil
para crear la cadena que usted necesita hoy
y que requerirá mañana para ser competitivo.
Planeación
Conjunto de procesos y procedimientos para
preveer la ejecución antes de realizarla, sobre
una cadena de abastecimiento preexistente.
La planeación de la cadena de abastecimiento
es útil para la cadena que usted ya tiene hoy,
para administrarla lo mejor posible.
Zona de Clientes Planta Centro de Distribución
¿Quién diseñó esto?¿Cuál es el objetivo de este diseño?
© 2013 LLamasoft, Inc. All Rights Reserved
Supplier Production Distribution CustomerSupplier Production Distribution Customer
Supplier DistributionProduction CustomerSupplier Production Distribution Customer
What is Supply Chain Design?Test sobre Supply Chain Design
Flo
wFl
exib
ility
, Hig
h R
elia
bili
tyV
alu
e A
dd
ed, R
egio
nal
Dis
trib
uti
on
Co
nti
nge
ncy
So
urc
ing,
Reg
. Dis
t.Sp
ecia
lized
Pro
du
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n, R
eg. D
ist.
© 2013 LLamasoft, Inc. All Rights Reserved12
Planning
Operational
Design
Hourly Yearly
Executing the plan
Optimizing the “As Is”Exception management
To Be StructureTo Be Policies
What-If PlanningRisk Analysis
M&ASustainability Analysis
80%
20%
Value
What is Supply Chain Design?La Ubicación & Oportunidades
© 2013 LLamasoft, Inc. All Rights Reserved
S&OP
Supply Chain Design
ForecastingDemand
Planning
Master Production Scheduling
Production
Scheduling
Transportation
Optimization
Allocation &
Promise
Management
Op
erat
ion
alTa
ctic
alSt
rate
gic
Supply Production Distribution Demand
13
Purchase
Execution
Production
Planning
Distribution
Planning
Purchase
Planning
Inventory OptimizationProduct Flow
Optimization
What is Supply Chain Design?La Ubicación & Oportunidades
© 2013 LLamasoft, Inc. All Rights Reserved
Agenda
Quick Introduction to LLamasoft
What is Supply Chain Design?
A Historical Accident vs. Engineered Reality
Supply Chain Design: Competitive Advantage• What is my Supply Chain Design Maturity Level?
• Closing the GAP
• The COE Imperative
Found Money in Jacket Pocket
Q&A
© 2013 LLamasoft, Inc. All Rights Reserved
The Historical Accident
© 2013 LLamasoft, Inc. All Rights Reserved
A Historical AccidentCurrent Supply Chain Structure
© 2013 LLamasoft, Inc. All Rights Reserved
A Historical AccidentCurrent Supply Chain Structure
© 2013 LLamasoft, Inc. All Rights Reserved
A Historical AccidentCurrent Supply Chain Structure
© 2013 LLamasoft, Inc. All Rights Reserved
A Historical AccidentCurrent Supply Chain Structure
© 2013 LLamasoft, Inc. All Rights Reserved
A Historical AccidentCurrent Supply Chain Structure
© 2013 LLamasoft, Inc. All Rights Reserved
The Engineered Reality
© 2013 LLamasoft, Inc. All Rights Reserved
Product Flowpath Analysis
© 2013 LLamasoft, Inc. All Rights Reserved
Port Flow Balancing
© 2013 LLamasoft, Inc. All Rights Reserved
Cost-to-Serve Optimization
© 2013 LLamasoft, Inc. All Rights Reserved
Capacity Modeling & Optimization
© 2013 LLamasoft, Inc. All Rights Reserved
Supply Chain Segmentation
© 2013 LLamasoft, Inc. All Rights Reserved
New Optimal Structure
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New Transportation Routes
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Service Coverage
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Sales & Operations Planning
Sales & Operations Planning
Pre-Position
Pre-Build
Demand
© 2013 LLamasoft, Inc. All Rights Reserved
Production Modeling & Simulation
Historical Inventory Pattern Simulated New Inventory Pattern
• 40% lower stocks.• Less warehouse space required• No expediting or exceptional costs• Regular stable pattern of orders
On-hand
In-transit
© 2013 LLamasoft, Inc. All Rights Reserved
An Engineered RealityWhat the Supply Chain Should be
© 2013 LLamasoft, Inc. All Rights Reserved
Agenda
Quick Introduction to LLamasoft
What is Supply Chain Design?
A Historical Accident vs. Engineered Reality
Supply Chain Design: Competitive Advantage• What is my Supply Chain Design Maturity Level?
• Closing the GAP
• The COE Imperative
Found Money in Jacket Pocket
Q&A
© 2013 LLamasoft, Inc. All Rights Reserved
Supply Chain Design: Competitive Advantage
Supply Chain DesignSupply Chain Design allows companies to thrive since it optimizes the terrain in which planning and execution is in control. A roadmap is then crafted based on this and suggested for improvement, always to be observed within the following in three capabilities technology, people, process.• Technology limits the following:
• Depth of studies• Variety of studies• Visibility• Speed of process and response• Flexibility• Training, Standardization, growth speed
• Opportunities in developing training, growth plans, career paths, COE build up and renewal
• Opportunity in building COE Supply Chain Design R&D
• Automation & Standardization, possibility of easily sharing knowledge and leveraging people.
© 2013 LLamasoft, Inc. All Rights Reserved
Excellence TechnologyHow we solve the COE problems
Technology Enabler for Supply Chain Design
NetworkOptimization
EnterpriseSimulation
InventoryOptimization
TransportationOptimization
Our interface to allow executives to easily visualize models and build scenario logic to share with modelers. Fixes the issue of communication in scenario definition and results presentation
Our solution to manage teams of modelers and integrate them to superusers & executives. File Sharing, logging, managing solving capacity, documentation, visibility of model status and custom dashboards to share via web.
Connect to, process, transform, clean all database information from any database available. Automate model and/or report building and graphs.
Benchmark Data For future Supply Chain Design.
Plus geocoding, product classification, demand classification, actual road networks, service area maps, 11 mapping options, reporting, dynamic tables.
© 2013 LLamasoft, Inc. All Rights Reserved
Capability DiagnosticsSuggested Gap Closure
Managing Design Processes
Project Methodology Supply Chain Design Software
Operating Model & Governance
Process & Tool Training Standard Tools & Templates
Design for Supply Chain
Commercial TechnologyPortfolio Management Process
Data Automation
Design Reuse and Best Practice Sharing
Supply Chain Innovation and R&D
Integrated Project Teams
Customized Technology
Continuous Planning
Processes Increasing
Capability
Maturity
SPACE FOR INNOVATIONB2B integration and collaboration
Process integration (process and data)
Process optimization
Continuous improvement unit
Partnering with Key Technology that evolves
above the competitive trends in the industry
MASTER ANALYTICSEnhanced and standardized capabilities
Portfolio management
Risk management
BUILD THE FOUNDATIONCore processes and capabilities
Standard work systems
Employee development
The evolution of processes, and people development should be aligned to a
policy of growing the capability maturity over time. Technology, process, and
people should be aligned with this trend, and empower the organization to be
able to follow this path.
© 2013 LLamasoft, Inc. All Rights Reserved
Agenda
Quick Introduction to LLamasoft
What is Supply Chain Design?
A Historical Accident vs. Engineered Reality
Supply Chain Design: Competitive Advantage• What is my Supply Chain Design Maturity Level?
• Closing the GAP
• The COE Imperative
Found Money in Jacket Pocket
Q&A
© 2013 LLamasoft, Inc. All Rights Reserved
Supply Chain Design Questions
What is my actual cost-to-serve
each product to each customer?
From whom should we source?
How should we flow each product
through the network?
Where and when should we produce
each product?
Where should we stock product?
How much inventory is enough to
meet my customer service
requirements?
How much should I buy and at what
price?
How should I ship my products?
© 2013 LLamasoft, Inc. All Rights Reserved
Our Value AddedBenchmark on Customer Savings
Reduction in Total
Logistics Costs
0% 20%5% 10% 15%
Reduction in Total
Inventory Costs
0% 20%5% 10% 15%
Reduction in Total
Transportation Costs
0% 20%5% 10% 15%
Service Level
Improvement
0% 20%5% 10% 15%
Flexibility Improvement0% 20%5% 10% 15%
Other Benefits Registered
• Supply Chain Visualization
and of impact of changes
done in supply chain
design
• Product Segmentation and
portfolio optimization
• Consolidate and
standardize global supply
chain design initiatives
• Custom reports of the
results of the supply chain
redesign exercise
• Direct integration with
transactional systems such
as SAP®, software is
certified
15 % – 20% In Cost Reduction in Supply Chain Design
39
© 2013 LLamasoft, Inc. All Rights Reserved
Visualization, Maps & Graphing
Service area maps precisely
display service distance using
actual street-level details
Apply a variety of risk indices to
output maps
GIS mapping with Google, Esri,
Bing, PC*MILER or nearly any
other provider
© 2013 LLamasoft, Inc. All Rights Reserved
Network Optimization
End-to-end model from tiers of
suppliers to the customer
Detailed modeling of complex
production processes, BOMs,
multi-time period capacities,
road routes, etc.
Comprehensive constraint
modeling
Fastest solve times on the
largest models
As-is supply chain
New optimal structure
© 2013 LLamasoft, Inc. All Rights Reserved
Enterprise SC Simulation
Proprietary Simulation Engine
• SimServer
• Open API
• Aggressive Ongoing
Development
Simulate the end-to-end
supply chain and product
detailed performance metrics
• Service
• Cost
• Logistics
• Sustainability
• Risk
© 2013 LLamasoft, Inc. All Rights Reserved
Product Flow-Path Optimization
Identifies how to best use the
newly-optimized network
Utilizes optimal network
design and creates flow
paths at individual item
levels
Balances the trade-off
between lot sizes, freight
rates, replenishment
frequencies, working capital
and lead time
© 2013 LLamasoft, Inc. All Rights Reserved
Evaluate Trade-offs Between Multiple Objectives
Multi-Objective Optimization
© 2013 LLamasoft, Inc. All Rights Reserved
Production Footprint Optimization
Platform for optimizing both
production capability and
capacity at a detail level
Balances production capacities
globally and within each facility
Optimize for maximum utilization
or highest margin (max profit)
Supports S&OP modeling for
near-term realignments
Primary Benefits
• Optimally align forecasts with
production footprint
• Rebalance production
capacities based on short term
changes in demand
Detailed Modeling of All Production-Related Processes and Capacities
© 2013 LLamasoft, Inc. All Rights Reserved
Demand Classification
Analyzes and properly classifies demand into one of
10 patterns, including non-normal and slow movers
Recommends control policies
Easy to set-up and use
Integrates with network optimization and simulation
Fast dynamic programming-based solver
© 2013 LLamasoft, Inc. All Rights Reserved
Multi-Echelon Inventory Optimization
True multi-echelon inventory right-sizing for all product types,
including fast movers, slow movers, intermittent demand, etc.
Optimal mix of postponement versus finished goods inventory
placement
Ability to simulate any inventory strategy to test service level
performance and capacity utilization
© 2013 LLamasoft, Inc. All Rights Reserved
Scenario Management
Create Multiple Scenarios within a
Single Model
Generate sensitivity ranges
around key costs, capacities,
demand characteristics, etc.
Self-documenting audit trail of all
scenario changes and definitions
Compare all scenarios side-by-
side in graphs, maps and reports
Data updates to the baseline
propagate through all scenarios
Key Benefits and Usage
Thanks.
For additional Information Visit us at Booth 102
Carlos Valderrama
Managing Director Latin America
© 2013 LLamasoft, Inc. All Rights Reserved