MIT Supply Chain Design Lab Analytics-Driven Supply Chain Design for Business Leaders

Table Of Content

• Cut down on warranty costs
• Ongoing Collaboration in Supply Chain Network Design
• Tue 24 Sep, 2024 • 14:30 GMT • Business Design Centre, UK
• Data-Driven Supply Chain Network Design
• What Is the Flow of Manufacturing Costs?
• Supply Chain Performance Measures
• Louisiana Primed to Take Helm of Offshore Wind Supply Chain

This way, you can keep the sources minimal, reducing points of contact and limiting the different logistical puzzles while lowering the stress on supply chain capabilities. If possible, limit the number of subcontractors used for manufacturing your parts. Commonly, every manufacturer offers a variety of services but does not cover all of the necessary fabrication methods of a project. So even if the third part arrives late and you can start the work on the final assembly later, you will have saved time by letting others do part of the work for you. It is one of the most crucial design concepts in today’s market that manufacturers are trying to leverage for great payoffs.

Cut down on warranty costs

Whether you’re struggling with supply chain volatility, risk management, or balancing cost and sustainability, our expert panel will provide you with the tools and strategies you need to succeed. The increased efficiencies of supply chains have played a significant role in curbing inflation. As efficiencies in moving products from point A to point B increase, the costs in doing so decrease, which lowers the final cost to the consumer.

Ongoing Collaboration in Supply Chain Network Design

Assume, for example, that XYZ Furniture manufactures high-end furniture, and that a supplier provides metal handles and other attachments. The metal components need to be durable so that they last for many years. They must meet the design and quality specified by the manufacturer, and they must work as intended. Logistics deals with the planning and control of the movement and storage of goods and services from their point of origin to their final destination.

Tue 24 Sep, 2024 • 14:30 GMT • Business Design Centre, UK

For example, an increase in inbound material costs because one material costs more this year than it did last year can have major implications on a company’s cost structure. Or labor market mismatches can cause operational concerns—for instance, if transport companies can’t find enough people who want to drive trucks to deliver goods. Understanding Delivery Time – You must have a good idea about how long it will take for raw materials and finished goods to reach their destination. Knowledge about the location of your suppliers and distributors is crucial for this. Keeping all these in mind experts have designed six supply chain models for different requirements.

Data-Driven Supply Chain Network Design

High-performing supply chains invest in formal roles to coordinate planning along the end-to-end value chain across business units, functions, and sites. One-fifth of organizations tell us they have acute struggles with silos and difficulty in cross-business execution. Even companies in which “supply chain” covers the entire plan-source-make-deliver system don’t solve the coordination issue through the reporting structure alone. They can still be hobbled by a range of factors, including competing incentives, gaps in capabilities, and the sheer effort required to pull data together from different systems. With a better experience, customers are more likely to make repeat purchases and recommend the brand to their friends.

What Is the Flow of Manufacturing Costs?

All the above-mentioned challenges can be hard to overcome with isolation of functions being the most common enemy to tackle before moving on to supply chain optimisation. There are some common challenges that get in the way of efficient application of DfSC in many companies. By proactively addressing these issues, any company can reap the many benefits of DfSC. If a technology is approaching end-of-life, strategists recommend proactively phasing out older technology and simultaneously introducing new technology.

Designing supply chains for the circular economy - ellenmacarthurfoundation.org

Designing supply chains for the circular economy.

Posted: Wed, 15 Nov 2023 09:55:03 GMT [source]

In this approach, decisions regarding the configuration and management of the supply chain are guided by the analysis of vast and real-time data sets. When designing a supply chain network, it’s essential to strike a balance between cost and service levels. A well-designed network optimizes the trade-offs between inventory, transportation, and warehousing costs while ensuring that service levels meet or exceed customer expectations.

Data, Security, and Privacy

Cuboid cans have a packing efficiency of almost 100% and are hard to tip over, but are difficult to hold and weird to drink from, lowering customer satisfaction. To overcome this, engineers proposed thicker walls that would increase raw material costs. Initially, many different shapes were proposed to store beverages along with the cylindrical shape that is so popular today. Due to the sheer scale of the process, a small change in the product design could multiply exponentially and translate either into big costs or big savings. Design teams can eliminate servicing and warranty costs to a large extent by building reliability and other relevant features into the product.

Under the leadership of Alfred Sloan (then CEO of GM), GM pursued a ‘full-line products’ strategy that aiming to produce a variety of models from small economical version to large luxury models; some models for family use other for business. It was very rigid in its asset deployment, product line modification and introduction, no flexibility in responding to demand changes (due to fixed production capacity). As Henry Ford once said “Our customers can have any coloured cars they want, so long as it’s black.” This was a statement that acknowledged the system’s rigidity and inflexibility. Supply chain configuration can also be observed from the network relationship perspective. You know that in today’s market, supply chain network design is foundational for your success, regardless of your product, industry, or market. Simulation allows you to model at a transactional level with variability in mind and understand how your future-state supply chain can perform much better than a simple optimization model.

Optilogic Cosmic Frog delivers supply chain solutions built for resiliency. Our three-in-one design uses optimization, simulation, and a risk engine to provide insights that guide intelligent, sustainable, robust supply chain network design. You need information regarding demand, cost, replenishment, production, shipping, and more. And if you use benchmark data, you’re simply guessing because that data may not be current or accurate for your organization. And while optimization is critical to a successful supply chain network design network, it’s not the only element affecting your design choices. Supply chain management is especially critical when manufacturers are working with perishable goods.

Jarrod is founder and director of the MIT Humanitarian Supply Chain Lab in the MIT Center for Transportation & Logistics. Dr. Goentzel has an extensive experience in supply chain design, information systems, and decision support technology. We focus on the development of new quantitative methods for supply chain design and the use of visual analytics to facilitate a cross-functional co-design process. The MIT CTL Supply Chain Design Lab conducts innovative research to help organizations implement a value-driven, collaborative co-design process.

Obviously, the criteria what are chosen must serve the strategic intention of the decision-maker, and depend on the specific circumstances surrounding the location. The types of outsourcing business can be broadly observed in three categories. This would increase logistics cost as fewer cans could be transported and stored at any given time and a greater number of trips would be needed. Using standard parts in products instead of proprietary parts is advisable to maintain an uninterrupted supply of said parts. In the event that a supplier cannot complete an order, you can easily find another supplier.

Organizations must have access to organizational data to determine the end-to-end metrics that guide departmental goals. The company has also incorporated supply chain management into its environmental, social, and governance (ESG) initiatives, including those involving human rights, animal testing, sustainability, and transparency regarding product ingredients. Once products are made and sales are finalized, a company must get those products into the hands of its customers. A company with effective SCM will have robust logistic capabilities and delivery channels to ensure timely, safe, and inexpensive delivery of its products.