Selecting the Best Inventory Policy Using Gojii
Product inventory and WIP decisions are important sources of leverage on bottom-line results. Inventories and WIP represent large investments put at risk. These investments ripple through to the P&L in the form of direct costs, revenue impacts, and business growth. Supply line investment, an operational decision that is made every month or quarter, compounds result on the P&L. This important decision is typically addressed through "ad hoc" processes because there are few policy tools designed to support this management decision.
Existing supply chain and S&OP tool sets do a great job of managing supply to meet a selected "forecast." However, there is no single "correct forecast" of future demand, and existing tools are not designed to select the best demand level for the business. There is a "tool gap" between forecast inputs and selection of the best demand signal (aka "forecast") to drive your S&OP system.
Gojii fills the tool gap with a scenario based planning tool that helps stakeholders select the best demand signal to drive the S&OP system. Gojii works by identifying the inventory and build policies that will position your product line to take advantage of opportunities while protecting against adverse consequences.
A system simulation model using AnyLogic Simulation and Modeling Software is the heart of the Gojii tool. The model includes information about supply physics that capture many structural and inventory control dynamics. "The AnyLogic Company provides the perfect tool for this situation -- their "multi-method" AnyLogic simulation engine, which we (DecisioTech) use in all our projects. The Gojii simulation uses components based on discrete-event methods, system dynamics approaches, some agent elements, and bits and pieces of Java code. This all comes together seamlessly in the AnyLogic simulation engine leaving the modeler free to worry about solving the problem rather than managing the simulation technology," describes Lyle Wallis, President at DecisioTech.
Place of Gojii in Supply Chain Analytics
Using Gojii, powered by AnyLogic, DecisioTech models the interaction of the supply system with the market. Gojii captures market feedback as part of the cost curve calculation and generates a profit denominated risk-reward trade-off visualization for use by decision stakeholders to choose a particular strategy.
How the Decision Support System Works
The Gojii tool, powered by AnyLogic software calculates a cost curve whose inputs include a range of market scenarios and alternative supply policy options (build rate, line loading, safety stock, etc.). A simulation for every set of scenarios is run and captures material flow, simulated cash flow, time series data, etc. The outcome is then visualized making it easier for stakeholders to select the policy that makes the most sense for their firm.
The cloud based implementation enables companies to use Gojii via a browser, requiring no software installation. Ultimately, Gojii allows various stakeholders who have different opinions to collaboratively explore and analyze market scenario data.
Learn more about Gojii by watching Lyle Wallis' presentation at the AnyLogic Conference 2013:
More Case Studies
Maximizing Push Boat Fleet’s Net Voyage RevenueInterBarge, a first-class waterway operator, affiliated with SCF Marine, a part of Seacor Holding Group, operates freight along the HPP Waterway (Hidrovia Parana Paraguay, located in Argentina, Paraguay, Brazil, and Uruguay) on a dedicated contract carriage. The company’s challenge was to use the boat capacity free from dedicated contract commitment as a fleet, maximizing net voyage revenue.
Customer-Centric Transportation Network ModellingThe public transportation company employed PwC Australia to develop a solution that could provide a customer-centric view of their railway infrastructure and help the company understand the current incident effects on rail network operations and how to improve the situation. PwC consultants decided to build a model of the transportation network that would simulate train movements, incidents, and customers at stations and in trains.
CSX Solves Railroad Operation Challenges with and without AnyLogic Rail LibraryCSX is a US railroad company that operates about 21,000 route miles (34,000 km). AnyLogic allows the railroad industry users to simulate line-of-road, terminal, and yard problems. The following three projects, completed by CSX in 2014, covered a variety of tasks that were solved using AnyLogic software.
Preventing “Bus Bunching” with Smart Phone Application ImplementationIn public transport, bus bunching refers to a group of two or more transit vehicles (such as buses or trains), which were scheduled to be evenly spaced running along the same route, instead running in the same location at the same time. Dave Sprogis, Volunteer Software Developer, and Data Analyst in Watertown, MA, used AnyLogic to confirm his thesis that preventing "Bus Bunching" would improve the experience of public transit bus riders.
Emergency Evacuation Planning: Minimizing Gridlock and Improving Public SafetyA typical rush hour impedes the mobility of individual vehicles and significantly slows the overall flow of traffic. This phenomenon is compounded by events of mass mobilization, such as during an evacuation due to a hurricane or other event. When this occurs, traffic can reach a state of gridlock. ITS researchers sought to understand how public safety could be improved during such events by incorporating communication among a percentage of the vehicle population.
Supply Chain Design for Vaccine ManufacturerGlaxoSmithKline (GSK) was the world’s sixth largest pharmaceutical company in 2014. The company was launching a new vaccine product on a new market that needed a distribution network different from what they had before. Therefore, the company needed to design a new supply chain and align manufacturing processes with it.
Apparel Company Chose Location for New Distribution Center Using Simulation ModelingFruit of the Loom (FOTL) is one of the largest US apparel manufacturers and marketers. The company was expanding, and the executives wanted to know if it would be beneficial, in terms of shipping costs, to add a new distribution center (DC) on the east/west coasts of the US, or to redistribute products to a pre-existing DC. The contractors decided to simulate the whole supply chain in order to visualize DC locations on a GIS map, and the supply network between them.
Improving Mining Outbound Logistics with Agent-Based Simulation ModelingOne of the largest resource companies in the world, with over $80 billion in sales, decided to enter a new market. It was planning to build a new potash mine with 90% of the resources exported. They wanted to design a reliable supply chain, with a high speed of supply replenishing, and the ability to recover from natural disasters and man-made crises benefiting from such volatility. Amalgama and Goldratt companies contracted this project to design the potash mining operations and a full supply chain of outbound logistics.
Simulation of the Construction of a Tunnel with a Tunnel Boring MachineThe cost of one hour of down time of a tunnel boring machine is usually high and project managers have to do their best to avoid unnecessary delays in construction. The aim of the simulation project, which was carried out at Ruhr University Bochum in Germany, was to create a simulation model that would be capable of determining the bottlenecks in tunnel building processes in order to minimize the possible monetary losses.