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Supply Chain Risk Management
©2019 ITC Infotech. All Rights Reserved. 1
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Even the best supply chain designs perform sub optimally – Why?
©2019 ITC Infotech. All Rights Reserved.
Supply chain reliability and variation
• Demand variation
• Transportation lead time variation
• Production output variation
• Supplier delays
• Quality issues
Supply chain disruptions
• Bad weather
• Road closure
• Factory/line closure
• Unplanned holidays
• Political crisis
• Fill rate
• Order fulfillment
• Excess stock
• Higher transportation cost
• Reduced asset utilization
SOLUTION: Prior anticipation and pre‐emptive action
Variations, disruptions and incorrect decisions under uncertainty
Impact on Supply chain KPIs
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Solution flow
©2019 ITC Infotech. All Rights Reserved. 3
Variations and events
Sensed demand based on recent sales at every node
Preempt supply chain service and cost
impacts
Simulation based future supply chain performance
Classify the problems by root causes
Root cause classification based on simulation output
Action reports sent to concerned process
owners
Prescriptive actions
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Network
©2019 ITC Infotech. All Rights Reserved.
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Operation Logic
©2019 ITC Infotech. All Rights Reserved. 5
Factory
Hub
DC
DC
Branch/ Customer
Factory
DC DC
Branch/ Customer
Branch/ Customer
Branch/ Customer
Supplier
• Actual production plan• Fair Share distribution
algorithm• Anticipated days of
cover
Shipment after building x % FTL
• Pipeline consideration• Fair Share distribution algorithm• Anticipated days of cover
Demand generated using demand sensing along with an induced variability to cater to forecast errors
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Data flow for the solution
6
Simulation model
1. Production Plan2. Current inventory (finished
products/ raw materials)3. Raw material receipt plan4. Replenishment policy at
different facilities
1. Stock levels2. Fill Rate3. Logistics cost4. Other KPIs
1. Demand surge2. Delays in RM3. Facility/warehouse shutdown4. Production reductionInputs from ERP systems
Planned/unplanned Events information
Output from simulation
©2019 ITC Infotech. All Rights Reserved.
1. Root cause analysis
2. Reason classification for Service level
Auto Classification of root cause
Recommended Actions
Sensed Demand
Using proprietary Demand Sensing Tool of ITC Infotech
Prescriptions
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Solution roadmap
Capture the current
snapshot of supply chain
Predict the future supply
chain KPIs (stock levels,
cost, fill rate)
Navigate to the root cause
of underperformance at
specific points
Recommended
countermeasures
Digitaligence@work |©2019 ITC Infotech. All Rights Reserved. 8
Solution roadmap
Capture the current
snapshot of supply chain
Predict the future supply
chain KPIs (stock levels,
cost, fill rate)
Navigate to the root cause
of underperformance at
specific points
Recommended
countermeasures
Digitaligence@work |©2019 ITC Infotech. All Rights Reserved. 9
Solution roadmap
Capture the current
snapshot of supply chain
Predict the future supply
chain KPIs (stock levels,
cost, fill rate)
Navigate to the root cause
of underperformance at
specific points
Recommended
countermeasures
Digitaligence@work |©2019 ITC Infotech. All Rights Reserved. 10
AI supported automated root cause analysis
Low fill Rate @ Customer
Production planning
Production planning issues
Plan compliance problem
Distribution/supply planning
Unbalanced distribution
Logistics issues (Truck shipment frequency/load
building)
Inventory
Forecast error
Inventory norms inaccurate
Production Schedular
Schedular
Logistics manager
Supply planner
Demand Planner
Inventory Manager
Digitaligence@work |©2019 ITC Infotech. All Rights Reserved. 11
Solution roadmap
Capture the current
snapshot of supply chain
Predict the future supply
chain KPIs (stock levels,
cost, fill rate)
Navigate to the root cause
of underperformance at
specific points
Recommended
countermeasures
Digitaligence@work |©2019 ITC Infotech. All Rights Reserved. 12
Countermeasures to balance inventory and mitigate shortages
Fill rateFill rate
Transfer stock
from nearby
warehouses
Transfer stock
from nearby
warehouses
Adjust the
inventory
norms
Adjust the
inventory
norms
Prepone/defe
r shipments
Prepone/defe
r shipments
Increase
shipment
frequency
Increase
shipment
frequency
Revise the
production
plan
Revise the
production
plan
Thank youConnect with us to understand how ITC Infotech can help your business Email: [email protected]: www.itcinfotech.com
©2019 ITC Infotech. All Rights Reserved.All trademarks are the registered property of the respective companies and are acknowledged.
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