Published December 2023
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Supply chain design is the process of optimization of the location and function of supply, manufacturing and distribution networks in support of overarching company strategy and customer requirements.
It involves making strategic decisions about the configuration of the supply chain network, including the locations of facilities such as production plants, distribution centers, and warehouses. The goal of supply chain design is to create an efficient and effective network that can meet customer demand while minimizing costs
Supply chain network design tools enable the creation of network models with the application of analytics to determine the optimal supply chain design in a structured, scalable and repeatable way.
With rise in E-commerce, supply chains of today are increasingly becoming omnichannel making them more complex than ever. Legacy supply chain design software were build to design brick and mortar supply chains and fail to design a true omnichannel network that has both parcel and non parcel flows.
Our research includes following companies and their design solutions:
| Company Name | Product Name |
|---|---|
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Optiflow |
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Supply Chain Modeler |
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Cosmic Frog |
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SC Navigator |
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Anylogistix |
Optiflow is Lambda SCS’s supply chain design software platform that addresses challenges of designing a truly omnichannel supply chain.
Key Features
Let us look at some of the key features of Optiflow:
Most e-commerce networks use parcel shipping to deliver small packages to consumers’ homes. Companies utilize national carriers (FedEx, UPS, USPS, DHL) or regional providers (OnTrac, LaserShip, etc.) for last-mile delivery—from fulfillment locations to consumers’ homes. Parcel rates depend on the package’s weight, zone (origin-destination), and service level, and are generally negotiated by the shipper. Optiflow has mapped the networks (zones and transit times) of leading parcel providers (FedEx, UPS, USPS) and allows users to easily upload their parcel rate contracts for calculating the logistics cost of the network.
Zone skipping in a parcel network is a logistics strategy where parcels are consolidated and transported over longer distances, bypassing certain intermediate distribution points or zones. This process helps optimize the delivery network and reduce overall shipping costs.
Here’s a breakdown of how zone skipping works:
Parcel Consolidation: Parcels from various origins are grouped together before reaching a central hub. This consolidation typically occurs at a distribution center or fulfillment center.
Long-Distance Transport: Instead of following the traditional route that involves multiple intermediate stops or zones, the consolidated parcels are transported over longer distances directly to a destination zone.
Last-Mile Delivery: Upon reaching the destination zone, the parcels are then distributed for the final leg of delivery—the last-mile delivery to the end consumer.
By skipping intermediate zones and consolidating parcels before long-distance transport, businesses can achieve several advantages:
Cost Savings: Long-distance transportation is often more cost-effective than moving parcels through multiple zones. Zone skipping reduces transportation costs, especially when shipping a large volume of parcels.
Faster Delivery: Skipping zones can lead to quicker delivery times since parcels spend less time in transit and go through fewer distribution points.
Reduced Handling: With fewer intermediate stops, there’s a lower risk of parcel damage or loss during transit.
Optimized Network: Zone skipping helps streamline the overall logistics network, making it more efficient and responsive to demand
Optiflow allows users to model and optimize intermediate parcel hub based on customer demand and product profiles.
Many companies that have historically utilized store networks to sell to customers are moving to online channels, either through e-commerce platforms like Amazon or Wayfair or by establishing their own direct-to-consumer (DTC) channels. Deciding on the optimal product flow and inventory strategy across sales channels is paramount to business growth and profitability. Optiflow can be used to create supply chain scenarios to test different product flow and inventory strategies to support customer demand.
Coupa acquired LLamasoft in 2020 and began marketing the supply chain modeler which was their design solution. The Coupa offering is a combined desktop and cloud-based solution focused on network optimization, inventory optimization, and simulation.
Coupa was acquired by Thomas Bravo (private equity group) in Feb 2023
Key Features
Optilogic was started in 2018 by Ex-llamasoft (acquired by Coupa in 2015) team members to make supply chain design process powerful and easier for design professionals. Their design platform, Cosmic Frog, combines optimization, risk and simulation into a single platform allowing companies to achieve a more wholistic view of their supply chain
Key Features
AIMMS, headquartered in The Netherlands, offers the Supply Chain Design Solution. SC Navigator uses a mathematical optimization back end with a scenario analysis-based front end to create supply chain design models. The company also offers products for inventory planning, demand forecasting, and S&OP.
Key Features
Anylogistix is a supply chain design solution owned by The Anylogic company. Their solution combines dynamic simulation and analytical optimization to provide advanced supply chain decision support in an easy-to-use application.
Key Features
There are other companies like Logility, Gains, Log-Hub, Sophus x, which also offer supply chain design solutions.
Contact us today to learn more about how our Services can drive success for your business.
We’re excited to discuss what problems you are facing and how can you make your existing supply chain more efficient by continuously designing it.