Improving supply chain performance is critical to business because of the strong link between supply chain effectiveness and profitability. However, this is extremely difficult to do well because supply chains are complex and the business environment is uncertain. Because traditional decision-making takes into account neither the full complexity of the situation nor the many inter-related factors, it is often too simplistic and static to enable the right supply chain decisions to be made.
In PA Consulting Group’s experience many mistakes can be avoided and multi-million dollar benefits realised through the use of the right decision support and modeling methods:
- modelling that incorporates supply chain complexity can create innovative options and identify much better solutions than when only one part of the chain is considered
- the modelling approach can be tailored to meet the specific business situation
- the principle of ‘fitness for purpose’ ensures the delivery of business benefit.
Case studies
PA worked with the following clients to identify the best decision support approach and deliver the stated benefits.
Nissan
The first ever end-to-end scheduling model of a car plant resulted in Nissan reducing work-in-progress stock holding by over 40% (including engines awaiting installation being reduced from 250 to 20) because for the first time the schedule was fully achievable.
A major shipping company
Our client saved several hundred million dollars by adopting a global optimisation model. The previous method, which regarded each ship as a profit centre, performed far worse for the company as a whole because it resulted in very high numbers of empty container movements.
The BBC
The BBC was able to identify benefits of several million dollars per year through making more effective use of programme-making staff and associated facilities, together with better planning of programme-making activity.
In all of the cases above, the complexity involved meant delivering the benefit would not have been possible without the right decision support approach.
