The supply chain is a set of steps that allows a finished product to reach its customers, starting with the raw materials. Supply chains are generally very complex, and managers have cut them into sections in order to understand and improve them. For example, a warehouse manager seeks to reduce inventories, but production asks him to increases it. Meanwhile, purchases want to order the largest batch possible, which then leaves transport to deliver the products to the customers at the last minute to meet delivery dates. With this supply chain consulting sub-section cut, we are assured to get a sub-optimal solution because we eliminate synergy opportunities.
Operations research allows us to analyze and optimize a very large set of variables and constraints in order to find the most optimal solution for the entire firm. For example, in the optimization of the supply chain our consultants would, in the previous example, well-coordinate production needs and purchases. The warehouse would not have to take unnecessary stock since the forecasting system would provide us with the required service rate and transport would plan its routes with production, procurement and customer needs.
The interest for the supply chain cunsulting with MELIORE’s supply chain management tools and mathematical methods comes from the facts that the solutions found are significantly better than a solution found by human intuition or found by analysis from a spreadsheet. The more expensive the unit cost of the resource that we optimize, the more appreciable the gain.
The optimization of the supply chain is a typical application of operations research because decision variables are very large, and unit costs are high. Indeed, whatever the cost of stocks, storage, transshipment, transport or time, all of these resources need to be optimized.