Selecting the Best Inventory Policy Using Gojii

Problem:

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.

Solution:

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.

Place of Gojii in Supply Chain Analytics

Place of Gojii in Supply Chain Analytics

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.

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.

Supply Chain Decision-Support Tool

How the Decision Support System Works

Outcome:

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:

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