Supply chain optimization is more than simply optimizing inventory levels. Key capabilities in supply chain planning software help companies run optimization logic to balance multiple objectives like profitability, sustainability, and more, to achieve specific business goals.
In this soundbite from one of our customer webinars, Paul Mackie, Senior Business Consultant at John Galt Solutions, explores the principles of ‘true optimization’ for supply chains.
The Atlas Planning Platform automates the supply chain optimization process, allowing teams to specify their goals and constraints, and receive tailored solutions. This empowers organizations to make informed decisions while minimizing costs and environmental impact.
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Optimization is a term that gets used a little bit loosely. I would say. You know, in general, people often talk about optimization when they really mean. I know I have too much inventory in one place, and I want to move that inventory around in the supply chain.
But when we talk about true optimization, what we're really talking about is essentially running a formula that will solve for what the best way is to do something to achieve a certain objective.
So, if you have a number of different objectives that you're trying to balance, optimization is a way to handle all of those complexities and basically build a formula to figure out the right way to do things. Now, there's a number of places in Atlas where optimizations are used locally.
You know, for instance, one of the classic examples is this safety stock simulator, where Atlas is able to show you what the best service level is to target for a given SKU in a given level of the supply chain. It'll basically look at the cost of having that inventory in stock versus the stock out cost that you might have, and it'll be able to figure out for you where the cost is the lowest overall.
This is an example – a simple example of optimization. But there are many more complex examples available as well. And one of the areas is what we call capacity optimization. This is part of the capacity component of Atlas which essentially helps you take various resources, various constraints that you may have and determine what the best way to balance against those constraints might be.
One of the things that Atlas will now help you do is specify exactly what you're trying to achieve and then run optimization logic to account for it.
So basically, whatever constraints you have and whatever objectives you're trying to achieve Atlas can optimize the way you balance production to account for those various constraints, and you can even compare the result of one optimization against another.