CASE STUDY

Supply Chain Visibility and Cost to Serve Analysis for a Leading Manufacturer and Retailer

Apr 28, 2017

Due to the intense level of competition in the global market, industries across the world are facing additional challenges in terms of increasing operational expenditures, rising demands, and constant regulatory changes. To meet the growing demand and reduce the time to market, global conglomerates have started outsourcing their operations. Though outsourcing reduces operational costs, the complexities associated with supply chain visibility make it difficult to predict supplier inventory shortages, which, in turn, will have a significant impact on product deliveries and sales revenue. Without timely access to accurate information on the supply chain, organizations find it difficult to track the effectiveness of their supply chain and improve performance.

With the right implementation, data analytics services can help organizations gain better visibility of the supply chain processes and enhance operational efficiency across the supply chain. By tracking the recent developments in the market and collecting and analyzing data from various credible sources, Quantzig’s supply chain analytics services will help businesses enhance efficiency in the various stages of the supply chain. By analyzing spend data, we also help organizations improve category management practices; thereby, reducing the total cost of operations.

Contact our supply chain analytics experts to learn how we can help you enhance supply chain visibility.

The Business Challenge and Quantzig’s Approach

With a keen eye on identifying future growth opportunities – the client, a leading manufacturer, and retailer in the US approached Quantzig to develop an effective solution for enhancing supply chain visibility and demand-supply management, which would help them overcome the complexities in identifying, measuring, and managing returns. With short product lifecycles and evolving customer demand, the client was facing constant pressure to optimize its supply chain for every node, while also ensuring traceability and sustainability right from the product design stage to development. Additionally, reverse logistics was also impacting the retailer’s demand management decisions, making it more complex and cost-consuming to manage returns.

The primary objective of this supply chain visibility assessment was to overcome the challenges in gaining timely access to accurate supply chain information for demand planning and inventory optimization. Additionally, the client also wanted Quantzig to assist in overcoming the complexities of their supply chain – in terms of suppliers, manufacturing partners, and logistics.

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To cater to the specific requirements of the client in the US, our supply chain analytics team collaborated with the client to develop an effective solution based on the analysis through regression and hidden Markov models. Moreover, to understand business requirements better, our team also collected information on various dimensions including orders, invoices, product backlog, inventory aging, supply constraints, and transportation routes.

An overview of the data used and models applied are given below:

QZ-supply chian visibility
Source: Quantzig

Business Benefits and Insights

QZ-supply chian visibility 2

With the objective to help the leading retailer and manufacturer enhance supply chain visibility, and improve the time to market for their products across a wider customer base, Quantzig deployed a team of supply chain analytics experts with significant experience in offering actionable insights through similar assignments. The solution offered also helped the client overcome challenges due to its limited analytics capabilities and inability to manage the complexity and scalability of information.  In addition to providing a coherent and multi-site view of the transactional data about products and material flow across multiple sites, this supply chain visibility solution also evaluated cost-service trade-offs and helped the client ensure that the requirements of the customers are addressed. Furthermore, to access information related to orders, invoices, forecasts, and product backlog, our analytics experts also offered the client a real-time dashboard using Tableau.

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The demand-supply performance insights offered through this supply chain visibility study forecasted the demand from each territory and for each product. Insights about the product and account-wise performance for each region based on the generated revenue and the sales history was offered. The study gained access to data points related to spend, supplier performance, and component lifecycle management. Our solution also provided insights on supply and demand forecasts to manage variability due to unforeseen events.

In just eight weeks, there was a significant improvement in demand, inventory management, and cost reduction and also enhancement in visibility across the entire supply chain. Additionally, this supply chain visibility assignment also enhanced performance in terms of supplier lead times and revenue maximization by minimizing cost-to-serve.

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