Skip to main content
  • login
  • contact
  • language
    • English
    • Français
    • Español
    • Português
    • Deutsch
    • 简体中文
    • 日本語
  • search
X
GEP Logo GEP Logo
  • Company
    • Leadership
    • Customers
    • Partners
    • Sustainability at GEP
    • News
    • Events
    • Culture
    • Mission & Vision
    • Awards & Recognition
  • Solutions
    • Strategy
      • Procurement Consulting  
        • Procurement Transformation
        • Digital Procurement Transformation
        • Opportunity Assessment
        • M & A Services
        • Strategic Cost Management
        • Supply Risk Management
      • Supply Chain Consulting  
        • Environmental, Social and Governance
        • Socially Responsible Sourcing
        • Supply Chain Strategy
        • Supply Chain Diagnostics
        • Inventory Optimization
        • Network Optimization
      Software
      • GEP SMART  
        • Procurement Software
        • Direct Procurement Software
        • Indirect Procurement Software
        • Digital Procurement Transformation
        • Master Data Management
        • AP Automation
        • Spend Management
        • SMART S2P Technology
      • GEP NEXXE  
        • Supply Chain Visibility and Execution
        • Supply Chain Planning
        • Supply Chain Collaboration
        • Supply Chain Control Tower
        • Should-Cost Modeling
        • Inventory and Warehouse Management
      • GEP CLICK  
      • GEP MINERVA  
      Managed Services
      • Procurement Outsourcing  
        • Source-to-Contract
          • Spend Analysis
          • Strategic Sourcing
          • Category Management
          • Supply Market Intelligence
          • Tail-Spend Management
          • Procurement Support Services
        • Procure-to-Pay
          • Cost Recovery & Invoice Auditing
          • Accounts Payable
      • Supply Chain Outsourcing  
        • Planning & Forecasting
        • Inventory Management
        • Logistics Management
        • Supply Chain Data Management
        • Supply Chain Risk Management
  • Industries
    • Automotive
    • Chemicals
    • Consumer Packaged Goods
    • Energy & Utilities
    • Financial Services
    • Government & Nonprofit
    • Industrial Manufacturing
    • Life Sciences
    • Oil & Gas
    • Retail
    • Telecommunications, Media & Technology
    • High-Tech
    • Media & Entertainment
    • Software, Social & Platforms
    • Telecom
    • Travel & Hospitality
  • Knowledge Bank
    • Digital Transformation
    • Software & Technology
    • Strategy & Planning
    • Operations
    • Procurement
    • Sustainability
    • Insights From the Top
    • COVID-19 Resource Center
    • Inflation Strategies
  • Careers
    • Join Us
    • GEP Per Se
    • Campus Connect
  • Partners
   
  • GEP Strategy ›
    • GEP Strategy
    • ‹ Back
      • Procurement Consulting ›
        • Procurement Consulting
        • ‹ Back
          • Procurement Transformation ›
            • Procurement Transformation
            • ‹ Back
              • Procurement Strategy
              • Org. Design & Implementation
              • Capability Building
              • Change Management
              • Governance & Performance
              • Processes & Policies
              • S2P Operations
              • Sourcing & Category Management
              • Technology
          • Digital Procurement Transformation
          • Opportunity Assessment
          • M&A Services ›
            • M&A Services
            • ‹ Back
              • M&A Clean Room
          • Strategic Cost Management ›
            • Strategic Cost Management
            • ‹ Back
              • Zero-Based Budgeting
          • Supply Chain Risk Management
      • Supply Chain Consulting ›
        • Supply Chain Consulting
        • ‹ Back
          • SUSTAINABILITY AND RESILIENCE
          • Environmental, Social and Governance
          • Socially Responsible Sourcing
          • Scope 3
          • PLAN
          • Digital Planning, S&OP, S&OE
          • Collaborative Planning
          • PROCURE
          • Source To Contract
          • Procure To Pay
          • MAKE
          • Inventory Strategy & Management
          • Operations & Manufacturing Excellence
          • DELIVER
          • Network Strategy & Optimization
          • Warehousing & Transportation Management
  • GEP Software ›
    • GEP Software
    • ‹ Back
      • GEP SMART ›
        • GEP SMART
        • ‹ Back
          • Procurement Software
          • Direct Procurement Software ›
            • Direct Procurement Software
            • ‹ Back
              • Bill of Materials Management
              • Data Analytics & Reporting
              • Inventory Management
              • Master Data Management
              • Quality Management
              • Supplier Collaboration Portal
              • Supply Chain Operations
          • Indirect Procurement Software ›
            • Indirect Procurement Software
            • ‹ Back
              • Source-to-Contract
              • Spend Analysis
              • Savings Project Management
              • Category Management
              • Contract Management
              • Savings Tracking
              • Sourcing
              • Supplier Management
              • Procure-to-Pay
              • Guided Buying
              • Procurement Portal
              • Catalog Management
              • Order Processing
              • Invoice Management
          • Digital Procurement Transformation
          • Master Data Management
          • Product Accessibility
          • AP Automation
          • Spend Management
          • SMART S2P Technology
      • GEP NEXXE ›
        • GEP NEXXE
        • ‹ Back
          • Supply Chain Visibility and Execution ›
            • Supply Chain Visibility and Execution
            • ‹ Back
              • Inventory and Warehouse Management
              • Logistics Visibility
              • Control Tower
          • Supply Chain Planning ›
            • Supply Chain Planning
            • ‹ Back
              • Supply Chain Control Tower
              • Should-Cost Modeling
              • Demand Planning
              • Supply Chain Bill of Materials
              • Supply Chain Direct Sourcing
              • Supply Planning
          • Supply Chain Collaboration ›
            • Supply Chain Collaboration
            • ‹ Back
              • Forecast Collaboration
              • Purchase Order Collaboration
              • Quality Collaboration
              • Capacity Collaboration
              • Quality Management Software
          • Supply Chain Control Tower
          • Should-Cost Modeling
          • Inventory and Warehouse Management
      • GEP CLICK
      • GEP MINERVA
      • Innovation ›
        • Innovation
        • ‹ Back
          • Emerging Technologies
          • Native to Cloud
          • Native to Mobile
          • One Unified Platform
          • Security
          • User-Centric Design
  • GEP Managed Services ›
    • GEP Managed Services
    • ‹ Back
      • Procurement Outsourcing ›
        • Procurement Outsourcing
        • ‹ Back
          • Source-to-Contract
          • Spend Analysis
          • Strategic Sourcing ›
            • Strategic Sourcing
            • ‹ Back
              • MRO
              • CAPEX
              • Logistics
              • Packaging
              • IT & Telecom
              • Energy
              • Direct Materials
          • Category Management ›
            • Category Management
            • ‹ Back
              • Contract Management
              • Supplier Performance Management
              • Savings & Compliance Tracking
          • Supply Market Intelligence
          • Tail-Spend Management
          • Procurement Support Services ›
            • Procurement Support Services
            • ‹ Back
              • eSourcing
              • Supplier Performance Management
              • Savings & Compliance Tracking
              • Sourcing Support
          • Procure-to-Pay
          • Cost Recovery & Invoice Auditing
          • Accounts Payable
      • Supply Chain Outsourcing ›
        • Supply Chain Outsourcing
        • ‹ Back
          • Planning & Forecasting
          • Inventory Management
          • Logistics Management
          • Supply Chain Data Management
          • Supply Risk Management
  • Industries ›
    • Industries
    • ‹ Back
      • Automotive
      • Chemicals
      • Consumer Packaged Goods
      • Energy & Utilities
      • Financial Services
      • Government & Nonprofit
      • Industrial Manufacturing
      • Life Sciences
      • Oil & Gas
      • Retail
      • Telecommunications, Media & Technology
      • High-Tech
      • Media & Entertainment
      • Software, Social & Platforms
      • Telecom
      • Travel & Hospitality
  • Knowledge Bank ›
    • Knowledge Bank
    • ‹ Back
      • Digital Transformation
      • Operations
      • Procurement
      • Software & Technology
      • Strategy & Planning
      • Sustainability
      • Podcasts
      • Insights from the Top
      • COVID-19 Resource Center
      • Inflation Strategies
  • Company ›
    • Company
    • ‹ Back
      • Leadership
      • Customers
      • Partners
      • Sustainability at GEP
      • News
      • Events
      • Culture ›
        • Culture
        • ‹ Back
          • GEP Core Values
          • Women@GEP
          • Diversity
          • GEP Cares
      • Mission & Vision
      • Awards & Recognition
      • Contact Us
  • Global Presence ›
    • Global Presence
    • ‹ Back
      • Americas ›
        • Americas
        • ‹ Back
          • English
          • Español
          • Portugués
      • Europe ›
        • Europe
        • ‹ Back
          • English
          • Deutsch
      • Asia-Pacific ›
        • Asia-Pacific
        • ‹ Back
          • English
          • 中文
      • Middle East ›
        • Middle East
        • ‹ Back
          • English
          • العربية
  • Contact Us
  • Careers ›
    • Careers
    • ‹ Back
      • Join Us
      • GEP Per Se
      • Campus Connect
  • Language ›
    • Language
    • ‹ Back
      • English
      • Français
      • Español
      • Deutsch
      • Português
      • 简体中文
      • 日本語
  • Rapid Response from GEP
  • BLOGS
  • Strategy
  • Technology
  • MIND
Contact Us
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Breadcrumb

  1. HOME
  2. BLOG
  3. TECHNOLOGY
  4. UNDERSTANDING SUPPLY CHAIN OPTIMIZATION
Blog Image

Understanding Supply Chain Optimization: A Detailed Guide

  • Optimizing supply chains has today become vital for all businesses.
  • This enhances efficiency, mitigates risks and allows organizations to work effectively with suppliers.
  • Supply chain optimization can be achieved with the help of advanced supply chain software.

July 20, 2022 | Supply Chain Software Blogs

Today's supply chains are becoming increasingly technology-driven, so businesses must incorporate optimizations in the cloud to be effective at the ground level. Faster processing of supply chain data collected from multiple sources can be a powerful start to transforming the supply chain, resulting in cost and risk reduction.

What is Supply Chain Optimization?

Supply chain optimization (SCO) aims to ensure the optimal operation of a supply chain network. Optimization involves the application of mathematical modeling techniques using software as well as qualitative, management-based approaches.

Importance of Supply Chain Optimization

End-to-end supply chain optimization ensures that the supply chain operates at peak performance and efficiency. In other words, optimization maximizes profits while lowering overall costs and ensuring that the enterprise's goals are met.

Supply Chain Optimization Process

Businesses must adopt the following processes to optimize their supply chain:

1. Supply Chain Design

This process involves setting up suppliers, warehouse locations and production facilities, distribution centers, and the flow of materials between them and the end customer.

2. Supply Chain Planning

This process involves demand forecasting, inventory strategy and planning, production planning, and scheduling per the order and delivery timelines.

3. Supply Chain Operations

This focuses on execution activities – order management, inventory management, logistics management, data management and optimization, end-to-end supply chain visibility, and global trade management and execution.

Optimizing A Supply Chain Network

Supply chain network optimization enhances connectivity between suppliers, production facilities and distribution centers to enable faster time-to-market at the lowest possible costs. Based on a simulation of multiple supply chain optimization models, optimization results are evaluated for each model and compared for maximum profitability.

In this process, enterprises must also consider the constraints or specific requirements that are vital to their operations. These may include a limited production capacity or a sustainable practice.

Supply Chain Network Design

A global supply chain network design aims to ensure that data and supply chain functions such as inventory management , working capital, and logistics costs are optimized. It also increases end-to-end visibility, identifies opportunities for cost savings, and mitigates potential risks.

Best Practices for Supply Chain Optimization

  • Establish a center for network design manned by a team specialized in supply chain network design.
  • Design a supply chain network model.
  • Ensure the remodeling exercise of the supply chain network design is carried out per the established rules.
  • Ensure sustainable practices are considered while optimizing.
  • Consider automation and the latest supply chain optimization technologies for optimizing the supply chain and its processes.
  • Appoint a trusted consultant that has thorough knowledge and experience in the field of supply chain network optimization and design.

Benefits of Supply Chain Optimization

 • Cost Reduction

Supply chain optimization identifies potential cost savings opportunities in warehousing, inventory, logistics & delivery processes. It helps increase efficiency by automating repetitive processes, thus reducing overall costs.

 • Increased Revenues and Profits

Optimizing supply chain processes helps increase end-to-end visibility and derive actionable insights that enable faster responses and enhance customer experience. This helps in customer retention and provides competitive advantage, increasing the top line and bottom line.

 • Better Supplier Performance

Supplier performance is enhanced by transparent collaboration between the enterprise and its suppliers. This means the sales data, its analysis to determine future trends, and the stocking timelines must be communicated to the supplier. This helps in the following ways:

  • Fill the innovation pipeline for enhancing the efficiency and profits of both the supplier and the business.
  • Smarter decision-making by all concerned could mitigate risks and meet customer deliverables.
  • Better planning & stocking norms result in reduced inventory, leading to lower working capital requirements for both the suppliers and the business.

Integrated Supply Chain Management

Optimizing supply chain data sets can affect the physical supply chain at the ground level. Thus, integrated supply chain management provides useful data and insights that can be used to simplify decision-making.

Software That Helps Optimize the Supply Chain

Best-of-breed supply chain software is powered by advanced technologies like AI, ML, big data analytics, collaborative planning, demand sensing, and forecasting tools to provide actionable insights and enhance profitability and customer satisfaction.

How To Select the Right Software

Consider these features while deciding on the right supply chain management software :

  • AI-powered data insights
  • 360-deg visibility for deeper and actionable insights
  • Real-time collaboration for reduced costs
  • Predictive analytics
  • Using supply network intelligence data to spot patterns
  • Integration with ERP systems
  • Scalability with the cloud
  • User-friendly and intuitive interface

The last two years have clearly shown that disruptions in one form or the other will continue to wreak havoc on supply chains. Businesses must be prepared to deal with supply challenges and cope with unanticipated disruptions.

FAQ

1. Why is optimizing the supply chain important?

End-to-End supply chain optimization ensures that the supply chain operates at peak performance and efficiency. In other words, optimization maximizes profits while bringing down overall costs and ensuring the enterprise's goals are met.

2. How can supply chains be optimized?

Businesses must implement automation and the latest supply chain optimization technologies for optimizing the supply chain and its processes along with a skilled team to leverage them for efficiency and reduced costs.

3. What programs are used for supply chain management?

  • AI-powered data insights
  • 360-degree visibility for deeper and actionable insights
  • Real-time collaboration for reduced costs
  • Predictive analytics
  • Using supply network intelligence data to spot patterns
  • Integration with ERP systems
  • Scalability with the cloud
  • User-friendly and intuitive interface
 

Tags: Supply Chain Software , supply chain optimization

Add Comment +

FEATURED POST

...
Supply Chain Strategy Blogs

How to Effectively Monitor Scope 3 Emissions From Your Supply Chain

...
Supply Chain Software Blogs

From Cost to Resiliency: How Supply Chain Priorities Have Changed

    BLOG CATEGORIES

  • Procurement Software Blogs
  • Supply Chain Software Blogs
  • Inventory Management Software Blogs
  • Accounts Payable Blogs
  • Source to Pay Blogs
  • Contract Management Blogs
  • Mobile and Cloud Blogs
  • Spend Management Blogs
  • Spend Analysis Blogs
  • Operations Blogs
  • Purchasing Blogs
  • Supplier Management Technology Blogs
  • Sourcing Technology Blogs
  • Procure to Pay Blogs

TAGS

sustainability
Procurement Software
supply chain strategy
Inflation
Russia-Ukraine War

By checking the box below, you consent to GEP using your personal information to send you thought leadership content – such as white papers, research reports, case studies – and other communications. GEP representatives may contact you to provide additional information or answer questions.

If at any point in time you decide to withdraw your consent, you may unsubscribe by emailing your request to us at privacy@gep.com.

Please refer to the GEP Privacy Statement to understand how we manage and protect your personal information.

Terms of Use | Privacy Statement

Contact Us

Ask Us

Send us your question(s)

RFP

Request for a business proposal

Feedback

Share your thoughts, comments and suggestions

Demo

Schedule a live demo of our software

Discover
STRATEGY
Strategy
  •   Procurement Consulting
  •   Digital Procurement Transformation
  •   Strategic Cost Management
  •   Opportunity Assessment
  •   Supply Chain Risk Management
  •   Supply Chain Consulting
  •   Supply Chain Strategy
  •   Supply Chain Diagnostics
  •   Inventory Optimization
  •   Procurement Transformation
  •   Sustainability and ESG Consulting
SOFTWARE
Software
  •   Procurement Software
  •   Supply Chain Software
  •   Source-to-Contract
  •   Procure-to-Pay
  •   Supply Chain Planning
  •   Supply Chain Collaboration
  •   Supply Chain Visibility & Execution
  •   Supply Chain Control Tower
  •   Should-Cost Modeling
  •   Inventory & Warehouse Management Software
  •   Source-To-Pay Software
MANAGED SERVICES
Managed Services
  •   Procurement Outsourcing
  •   Strategic Sourcing
  •   Tail-Spend Management
  •   Category Management
  •   Procurement Support Services
  •   Supply Chain Outsourcing
  •   Supply Chain Planning & Forecasting
  •   Inventory Management
  •   Logistics Management
COMPANY
Company
  •   About Us
  •   Leadership
  •   Customers
  •   Sustainability at GEP
  •   Careers
  •   News
  •   Awards
  •   Partners
  •   Contact Us

Fresh Insights, Now on Your Phone

  • Dowmload On The App Store Button
Stay Connected
  •  
  •  
  •  
  •  

Latest Tweets

  • #SupplyChain #disruptions are a reality in today's unpredictable world. Learn how @gepsoftware has helped #SGS resp… https://t.co/jA2GnbWIBg

  • What steps can companies take to achieve #ESG goals effectively? Well, they can start with #procurement. Learn how… https://t.co/HGEfNyGdeD

  • #ElectricVehicles are a key part of the auto industry's plan to become #NetZero by 2050. But EVs aren't enough on t… https://t.co/YlEoys6vTA

  • Why did Asahi choose #GEP as their #procurement and #SupplyChain partner? Check out this video featuring Carmen Rad… https://t.co/RmstcfJXtm

  • GEPpers know how to have a good time! Check out a glimpse of our Winter Party at the GEP Prague office. We are hir… https://t.co/BqVK6XkpHv

  • #Inflation has dampened expectations for GDP growth and raised the risks of a #recession. What can #procurement lea… https://t.co/Hn1R5bxZXn

  • 4D seismic #technology is opening deep-sea #OilAndGas reserves for exploration, lowering costs and optimizing reser… https://t.co/Omq51vlEq7

  • The #GEP Europe Outlook 2023 Roadshow is coming to a city near you! Join us to learn the seven critical priorities… https://t.co/Hzv68et4Rr

  • GEP wishes a Happy Republic Day to all the Indians around the world.  We are #hiring. Explore our careers section:… https://t.co/RKTsyBfQFc

  • Sustainability Outlook for 2023: Trends, Insights and Actions 25 Jan 2023 https://t.co/58KIepy577

  • #Pharma companies are reshoring production, but shortages of active pharmaceutical ingredients make it a challenge.… https://t.co/a3uQJhn7tx

  • With uncertainty looming over 2023, there’s no end in sight to the challenges for #SupplyChain and #Procurement lea… https://t.co/O9tWELnt2i

  • Tight timelines and #COVID-related uncertainties made post-merger data ecosystem #convergence a tricky task for thi… https://t.co/RY6du0AP1D

  • Discover the keys to operating a strategic #procurement and supply function at an essential #PetroChemicals company… https://t.co/sJZmqhnWvS

  • What action should business leaders be taking on #sustainability in 2023? Join #GEP Founder and COO @JT_Turimella a… https://t.co/aerbJSp3GU

  • The pandemic and a labor shortage have exposed gaps in #pharma supply chains. Digital #SupplyChain transformation c… https://t.co/Bwvey5ObWn

  • GEP wishes everyone a very Happy Lunar New Year. May this Year of the Rabbit herald fresh starts and renewal of pro… https://t.co/Lnf3ZkO2zJ

  • Facing uncertainty and #disruption, #procurement needs agility — something #ERPs can’t provide. Here are 5 things t… https://t.co/ouGnhfW6wM

  • #GEP's Global Supply Chain Volatility Index reports 'Demand For Raw Materials Goes Down Reflecting Recession Risks'… https://t.co/dvIRfr8eyd

© Copyright GEP 2022. All rights reserved. Terms of Use | Privacy Statement | Cookie Policy |   | Quality Policy | GEP Logo