Companies in Asia Pacific Eager to Innovate with Supply Chain Optimization
The adoption of advanced analytics has moved at a much slower pace in Asia Pacific compared to Europe or North America. There are innovative firms that are setting the standard for innovation and successful analytics adoption, but as Actionable Intelligence expert Keith B. Carter explained in an interview with us last year, large businesses in the region are still lagging behind. In recent months, I‘ve been active in several events in the region and I’ve noticed a changing trend. Companies are increasingly eager to hear about optimization and advanced analytics. It’s not hard to see why. People are very intrigued by Prescriptive Analytics and Modeling, hearing success stories from counterparts in industries like energy and retail. Still, most businesses are worried about execution. Let’s take a closer look at their interests and concerns.
Areas of interest
There are several areas where companies are eager to apply optimization. These tend to be:
- Network design and planning: the process of evaluating complex trade-offs to deliver a network plan that maximizes profits and minimizes costs.
- Distribution center and coverage planning: a process to identify what the best location for your distribution centers is to ensure efficient and on-time deliveries across the chain.
- Stock allocation: the process of aligning supply and demand to move merchandise in a fast and agile way.
- Production planning: determining a production plan to serve different customers in an optimal way.
The need for advanced analytics in these areas is pressing, as large amounts of data are available, adding complexity to operations. However, there are some concerns hindering adoption.
Chief concerns preventing the adoption of Advanced Analytics in Asia Pacific
When I talk to supply chain leaders in the region, two main concerns emerge:
- Real business constraints: Optimization solutions deliver an actionable plan that you can implement to tackle any problem in your business, but the environments that companies operate in are very complex. Factors such as government regulations are difficult to incorporate into models. Therefore, it’s challenging to make sure the model represents the real business case.
- Small talent pool: The talent pool of optimization specialists is very small in Asia Pacific. It’s rare to find employees with this background. Finding the right people and managing an optimization system is difficult for most companies.
These are valid reasons to feel apprehension about adopting a new technology. You need to make sure the technology will be able to encompass the complexity of your business’ fast changing environment and constraints; and you need to have the people to drive and maintain the initiative. Our clients have overcome these challenges in two ways: by building up their in-house capabilities and adopting a flexible technology that allows them to modify their model to fit their unique needs. Off-the-shelf tools cannot provide this, so they see a great opportunity to embrace a technology like AIMMS. Let’s explore some use cases.
Companies setting an example
- SF Express is the biggest local express delivery company in the region. Their CEO wanted to adopt optimization really early on. The company is using AIMMS technology for network planning, aiming to identify the best route for deliveries given service network capacity.
- CEPRI is using a unit commitment model built in AIMMS. Their goal is to support the electricity energy network of China and the development of their economics in an optimal way. With the unit commitment model, they can adequately assess how much energy the electricity generators should generate and at which minimum cost.
- Woodside Energy in Australia is using AIMMS technology for marine scheduling. They have off-shore platforms and needed to determine an optimal schedule to deploy their ships for maintenance.
If you’re interested in how optimization can help you make better decisions to improve business outcomes, I highly recommend the following resources:
- Understand Prescriptive Analytics in 20 Minutes
- How to Set Up a Supply Chain Analytics Center of Excellence
- Creating a Next Generation Supply Chain: Enabling Your Team with Supply Chain Analytics
- White paper: Optimization as a Catalyst for Innovation
To find professionals that can help you implement supply chain analytics and innovation initiatives, I suggest that you learn more about:
- INFORMS, an international society for practitioners in the fields of operations research and management science.
- The AIMMS Alumni Connection Group on LinkedIn
Contact me for more details.