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VCSC simulates and animates any supply chain as an aid to diagnosis,
design or learning. It drags real demand data through a fully
featured electronic reconstruction of the supply chain. Your demand,
through your chain, at your chosen settings, if
you will. But with an answer in risk free seconds, not risky months
(an early run was on NZ wine with a 13 week lead time)
Settings include forecast method and smoothing (also forecastless)
seasonality method and smoothing (including on/off), ROP (or
similar) method and setting.
Within ROP or BTL are the SS and EOQ and variants. Then there's re-order review
frequency, lead times, and the penalty costs of overstock, understock and out
of stock.
That there are ~20,000 possible combinations of input settings
puts the logistics task in perspective. Optimisation is a red
herring, a complete pipe dream.
Success is about understanding cause and effect, and managing the big causes.
VCSC helps users, managers and directors understand the supply chain, the dangers
of hindsight, and the need to reconcile conflicting objectives - often in different departments.
The product is its own best advert, just call for a demonstration.
VCSC takes the customer's own demand data (or any other data) and shows how a supply chain would react under a range of about
20,000 possible input settings. Users very quickly learn which settings work for their situation. As important, they learn which
inputs are actually trivial - quite often the ones they have kept under closest scrutiny!
The inputs might include:-
- Forecast method and smoothing, including forecastless
- Seasonality method and smoothing, including switched off
- ROP (or similar) method and setting. Within ROP or BTL are clearly the SS and
EOQ and variants (including, e.g., the additional costs of emergency lead time sourcing and or buying at less than EOQ)
- Review frequency. Note this is new order (order none or some;
if some then how many) review. It is not the expedite / de-expedite
review, which is not worth modelling because there's a much simpler health check available. It's this:-
If there are far fewer de-expedites, then you're actually making matters worse!
- Lead times.
- Penalty costs of overstock, understock and out-of-stock.
Until companies can balance these, they are juggling apples vs pears.
See our Value Chain Thought Piece for more detail
More details …
- More recent examples include 708 million, 1,186 million and one I haven't counted but suspect exceeds 1 billion
(1 million million) possible combinations of settings
Because the Tools approach makes such complexity digestible, the team on this last project coined a useful catchphrase.
"This (additional) insight alters no principle" Each further option cemented our view of best practice and further strengthened
the case against status quo.
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