IBM Releases New Supply Chain Design Solution

Analytics software makes smarter supply chain network decisions

New York—Dec. 20, 2011—As companies seek to achieve smarter commerce and put their customers at the center of their commerce processes, one of the primary challenges they face is dealing with complicated and extended supply chains. With the complexity and volatility of today’s supply chains, companies are turning to supply chain analytics to optimize their networks on a more frequent basis.

To help clients with this challenge, IBM unveiled the latest release of the IBM ILOG LogicNet Plus supply chain design solution. This solution provides powerful optimization and scenario analytics to determine optimal supply chain configurations, sourcing strategies and production plans. It takes into account all cost and constraint variables, whether manufacturing, transportation or warehousing, across multiple tiers of even the most complex networks.


The new release introduces the industry’s first multi-objective optimization technology; enabling companies to gain a much deeper understanding of the trade-offs between conflicting objectives within their supply chain. This breakthrough in network modeling capabilities is achieved through complex mathematical capabilities. The new solution can move from single to two-dimensional analysis allowing companies to gain more insight and develop better business plans by directly balancing critical objectives.


The software creates a graphical curve that helps companies visualize the tradeoffs between different objectives in any model. Without this capability, users would have to run hundreds of ‘what if scenarios’ to gain just a small amount of insight into this trade-off or blindly run scenarios without guidance as to what limits to set around the key objectives. For example, a company deciding on an optimal number of distribution centers can evaluate the optimal risk point between cost and service levels to understand the exact point of diminishing returns.


This new capability will benefit companies in many industries, including manufacturers, consumer products companies, food and beverage, retail and transportation companies. It will bring companies more insight than ever before into the key drivers of their supply chain by quickly and transparently being able to see the interaction of supply chain objectives.  Popular examples that exploit the multi-objective optimization include these comparisons:


Total costs vs. sourcing costs: This helps companies achieve the best balance between developing products themselves or sourcing them by comparing optimized sourcing costs from outside suppliers with transportation and internal manufacturing costs.


Total Costs vs. Number of Storage Locations: This helps companies understand the diminishing returns on the total cost of its supply chain network when considering adding new storage locations closer to demand markets.


Service to Top Customers vs. Overall Service: This helps companies understand how much its service levels to its standard customers suffer when it tailors service for its top customers.


The latest release of this already-robust network design solution continues IBM’s efforts to give companies full insight into the optimized results being recommended. For example, it’s added additional depth into landed cost and lane analysis reporting. In addition, IBM also continues to enhance the tool’s “ease of use” by including features such as lane visualization capabilities that make model building more efficient and visually appealing to line of business executives trying to understand and take part in the modeling effort from a higher level.