Network modelling
Network modeling is one of the key activities done as part of the overall supply chain strategy to ensure that the demand and supply are well aligned. Network modeling is a crucial tool that can be used to design and set up a supply chain from scratch or it can be used to optimize an existing supply chain.
- Demand and supply mapping
- Network model building
- Network optimization
“An optimized supply chain network operates on optimum level of channel inventory, seamless customer experience, reduced costs, and enhanced service levels.”
– Alvis Lazarus
Network modelling can be used to solve 3 specific business cases:
OTIF is the primary metric which measures the customer service fill levels. OPD is a sub metric within that. In most cases one of the primary root cause of issues in OTIF and 0TD is nothing but the network itself. Leverage in network modelling, the overall supply chain network which includes the logistics and distribution can be optimized to enhance the overall customer experience.
Unit economics map is used to document the end to end of supply chain costing in detail – which includes planning, sourcing, manufacturing, and distribution. Then, network modelling is used to optimize the overall supply chain cost.
Supply chain channel inventory and the stock levels at every node within supply chain is documented using a value stream app. Network modelling and then be used to optimize the overall supply chain inventory keeping the service fill as a constraint.