Global supply chains in the modern business world have become more complex, and a lack of supply chain visibility can affect profitability. It becomes even more challenging when supply chain managers have to make a decision and match supply-demand, considering constraints and profitability. When it comes to supply chain allocations, strategically it becomes exceedingly difficult to decide how much volume/quantity to allocate, from which source to allocate, and where to allocate considering capacity and other constraints.
Linear programming is a scientific technique that can help businesses with decision making and optimizing allocations.
The general form of linear programming is as follows:
Maximize - A1X1 + …AnXn
Subject to - B1X1+…BnXn = < C1
D2X1+…DnXn =< C2
X1>= 0, Xn >= 0
In the above example, A1, An, B1, Bn, D2, Dn, C1, and C2 are given numbers, and X1 and Xn are variables. Similarly, linear programming can be used for minimization objectives as well.
The Anaplan Optimizer aids business planning and decision making by solving complex problems involving millions of combinations quickly to provide a feasible solution. Refer to the following supply chain network diagram. It has multiple distribution centers, multiple stores, and multiple SKUs. With the help of Anaplan Optimizer, supply chain managers can simply click a button and allocate demand by setting relevant constraints and objectives.
SUPPLY CHAIN NETWORK
Set the following prerequisites in Anaplan Optimizer:
Input: Define inputs
Objective: Define Maximization/Minimization
Constraints: Define constraints
Let’s refer to the following example:
INPUT: We have the following inputs:
1.1 – Input represents SKU-DC level stocks.
1.2 – Input represents SKU-Stores level demand
1.3 – Input represents SKU-Stores-DC level profitability =ASP per SKU – Cost per SKU
1.4 – Input represents DC wise maximum throughput/capacity
1.5 – Input represents DC to Stores supply feasibility metric /constraint.
Set up an objective before running an optimizer (in this example—Maximize Profitability).
Maximum profitability after running Optimizer
Set up all constraints example—the value should be >0 and integer, allocation <=capacity etc.
After Optimizer run, the following allocations are done based on maximum profitability and considering all constraints.
Supply chain managers can also set an objective to perform allocations based on product profitability, customer profitability, product-customer profitability, and customer priority. Additionally, supply chain managers can create multiple scenarios. Save and compare scenarios on the Anaplan platform to select the best fit scenario for the business. Your feedback is important to us! Tell us about your experience with Anaplan Optimizer in the comments below.
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With the unprecedented events of this year, warehouse space utilization planning becomes a key decision-making point to balance supply and demand. Inappropriate warehouse space planning may lead to safety concerns like accidents, higher vehicle turnaround times, demurrages, and product quality that can affect the overall warehouse’s operational efficiency and cost.
Benefits of warehouse space planning include:
Visibility on future space utilization and planning.
Reduction in cost due to demurrages, handling damages.
Improved warehouse safety compliance because of proper space planning.
A common challenge for demand planners, buyers, marketing, and sales teams is that they lack visibility on warehouse space utilization to perform their respective tasks or execute decisions made in day-to-day business with a high degree of certainty. Similarly, for a warehouse manager, it is very difficult to forecast warehouse space utilization accurately at a detailed, granular level considering misaligned estimates provided across different functions.
Warehouse managers are responsible for anticipating and quantifying space utilization related concerns and understanding the risks to enable leadership teams to take appropriate and proactive business decisions at the right time, such as partnering with third-party logistics partners, promotions planning, or order postponement.
Considering typical constraints related to warehouse space planning, there are platforms that can help businesses to integrate different business functions with warehouse planning. Anaplan is a leading global planning platform that caters to continuously Connected Planning, specifically empowering warehouse managers to quickly create and analyze various ‘what if’ scenarios. The ability for business managers to create on-the-fly plan variations during sales and operations meetings to conclude a ‘best fit scenario’ facilitates a more interactive and collaborative approach to streamline the integrated business planning process.
The beauty of using the Anaplan platform is all stakeholders—for instance, demand planners, buyers, or the marketing team—can visualize the impact of their independent decisions against warehouse space utilization without being dependent on a warehouse manager. For example, marketing can create their own ‘what if scenario’ versions and immediately determine the impact on warehouse space against a promotional uplift % applied on top of the baseline.
Anaplan provides flexibility for planning at the most granular levels like ‘Product-Location-Period,’ but it also gives users the capability to automate consolidated warehouse space level planning.
More About Connected Planning:
Scale with Anaplan: The 3 Tenets of Planning at Scale
Kick Off Summer by Improving Your Consolidations Process
Using Data and Technology to Create Value in Your Organization
A warehouse space utilization application built on the Anaplan platform can provide a unique opportunity for a business to connect and synchronize its demand planning function with the warehouse planning function at the most granular level of detail leading to lower cost and better performance. What best practices do your team implement for warehouse space utilization? Share in the comments below.
Amit Chavan is a Certified Master Anaplanner and an Anaplan architect with deep expertise in Supply Chain and S&OP. He has great experience and knowledge in the Supply Chain and has been leveraging Anaplan as the planning platform since his first deployment a few years back.
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If a list is published on a dashboard as a page selector and if user opens a dashboard then he/she could see any random list item selected as a page selector instead user prefers to set a top level item as page selector (eg. 'All') by default and there is no option available to set page selector as Top level by default. It will be great if this point can be considered.
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