New concept for supply chain optimization

With ORion-PI® Network Scale Savings Axxom Software AG has developed a new approach for even more realistic and efficient supply chain optimization. The concept allows users to consider complexity costs and economy of scale effects when analysing and improving their logistics and production networks. From 2nd to 4th of March 2010 Axxom presents the approach for the first time at trade fair LogiMAT in Stuttgart (hall 5, booth 240).

Today, transport, warehousing and production costs generally are the decisive cost factors when planning and optimizing supply chain networks. However, focussing on these factors often comes up short – especially if a company owns a huge variety of product programs and value added processes. For realistic modelling and optimization of a network, economy of scale and complexity costs play an important role as they sum up to 70 percent of the added value.

Up until now, companies optimizing logistics and production networks have been holding the wolf by the ears: To put it simply, they could save costs by processing as large amounts as possible at one location.

Thereby, significant economy of scale can be achieved by consolidation of handling and production. Afterwards, however, they have to put up with long transport distances and high distribution costs. To optimize the latter, a dispersed location strategy is necessary. “With our new approach ORion-PI® Network Scale Savings we help companies to solve this conflict and to find an optimal balance by considering effects like economy of scale and complexity costs in their optimization calculations.”

Other than the new concept, Axxom will present further novelties of its product family ORion-PI® at LogiMAT, which allow integrated planning and optimization of processes along the whole logistics chain. For example, the technology company will show new functions of its software ORion-PI® Logistics Optimization for warehouse and space management. Using realistic simulations of different scenarios, the solution allows, for example, the efficient analysis and optimization of warehouse assignments, pick strategies or different warehouse and material handling technologies. The functions for warehouse and space management are also the optimal basis for an integrated logistics and staff planning. In a geometrical model of the warehouse layout built with ORion-PI® Logistics Optimization companies can plan their staff demand and deployment for different warehouse areas in detail with Axxom`s software ORion-PI® Staff Planning & Scheduling.

Caption:
Complexity Costs and Economy of Scale do not only have impact on building sand castles, but first of all on design and optimization of supply chain networks. With a new approach of Axxom companies are now able to consider these decisive factors.

Source: Transportweekly