In part 2 of her article, Dr Noel Greis describes how a Saffron application to help make real time decisions and manage transactions in the military supply chain can apply to the business world.
All across the supply chain there are lots of transactions, and the biggest problem when you’re managing supply chains is that you don’t want a ‘stock out’. You don’t want to be at the bottom of the chain, standing in front of the customer and there’s nothing on the shelf.
It’s probably the worst thing that could happen to a retailer because in today’s environment, people have so many other choices, so they can readily choose another product, or choose another vendor.
We’ve looked at complex military supply chains supporting critical missions.
But imagine very complex product supply chains today that traverse the entire globe from emerging markets to developed markets.
You have complicated products, and individual parts may be sourced all over the world. The parts have to come together at a certain point and time for assembly and then distribution to the customer.
The supply chain is only as strong as the weakest link.
So if, across the supply chain there’s one little link where something is missing, your entire supply chain can fail.
So we can support commercial supply chains with the Saffron engine just like we did for the battlefield
We can get information across the entire supply chain, both inventory information and demand information, that enable us to balance supply and demand.
We can gather all of this information and use our Saffron engine to make recommendations about where we need to build up inventory for example, so that we don’t have a stock out at the very end of the process when the product is supposed to get to the customer.
It’s the situation that occurs in the battlefield. We’re getting lots of information in real time, using this information to better understand the dynamics of that process in order to avoid a stock out . The Saffron engine lets us make better decisions to manage our inventories more efficiently and effectively.
For example, the supply chain might experience a variety of potential disruptions, like a plain old quality problem.
A shipment of parts comes in from a supplier and it’s no good. So now you don’t have any parts and you have to hold up the supply chain. That supply chain disruption affects another node downstream in the supply chain and so on.
All of these disruptions are happening along the supply chain but the Saffron engine enables us to manage them in real-time and then to make the decisions that keep the parts flowing.
So before, where our solider or retailer might have gotten on the phone, to expedite an order, now they have the opportunity to let the application manage the risk.
Technology can take on some of these tasks and in the process, keep the soldiers on the battlefield better prepared to complete their missions.
Or keep retail customers happy.
Dr. Noel Greis, Director, Center for Logistics and Digital Strategy, UNC