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Supply Chain Network Design

All sourcing, production, and transportation activities of a company are bound within the structure of the supply chain: Suppliers, production facilities, warehouse locations, transportation lanes, modes, and stocking locations. Creating a network of these components to yield ongoing cost-competitive benefits requires substantial experience. Today's dynamic business environment makes regular assessment of current network against corporate strategy a necessity. Changes in market trends, outsourcing, globalization, mergers and acquisitions, and new product introductions are common triggers for re-evaluation of supply chains.

Supply Chain Network Design involves optimizing the supply chain network by taking into account several factors such as transportation costs, warehousing costs, inventory costs, and labor costs. Thousands of possible solutions make it impossible to solve network planning problems without use of a sophisticated algorithm. Typical questions answered by strategic network planning include:

  • What are the optimal number and locations of DCs/Warehouses based on current business needs?
  • Which warehouse should serve a particular customer?
  • What is the optimum response to changes in market conditions, such as economic recession?

PMC's Supply Chain Network Design products provide strategic analytical tools for designing the supply chain infrastructure that will maximize economic performance over the long term. PMC works closely with its clients and uses its thirty years of operations management experience to ensure synergy between strategic business objectives and supply chain network design. PMC also uses its network planning capabilities to provide support for sales and operations planning, production volume decisions, and new product launches. PMC's network planning methodology uses simulation to test the optimal solutions against the many ill effects of variability, thus creating a robust network providing the following features and benefits:


  • Provides unique solution to the market place that combines power of two methodologies that synergistically complement each other - Optimization and Simulation
  • Accounts for demand and supply uncertainty, considers service level and safety stock requirements, and enables one-step total cost optimization of stocking locations
  • Provides the capability of customizable business objectives, in addition to the standard profit optimization business objective
  • Presents ultimate flexibility in strategy determination by enabling defining of multiple prioritized goals such as reduced transportation costs and improved service levels
  • Models carbon footprint of supply chain activities


  • Testing robustness of optimal solution with simulation results in accurate prediction of realistic service levels. This inclusion of variability in the supply chain analysis is unique among many providers of network analysis services.
  • Modeling carbon footprint enables optimization of the supply chain network which is becoming increasingly significant to today's green companies.
  • Ensuring synergy between business needs and supply chain strategies such as:
    • Product sourcing strategy; evaluate supplier location decisions based on parameters such as lead time, reliability, etc.
    • Production strategy; evaluate make-or-buy decisions, postponement strategies, determine locations, size, product mixes of production facilities
    • Distribution network strategy; evaluate supplier-direct, plant-direct, consignment strategies, and determine transportation modes, lanes and customer - distribution center alignments
    • Customer service strategy; evaluate the effect of service targets on profitability

PMC provides software and services with off-the-shelf Supply Chain Network Design products like Supply Chain Guru and Solvoyo. For detailed product information, on-line demo or presentation, contact PMC.

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