A lot is happening in the world right now. Understanding these changes, how they affect our businesses, and the critical role the supply chain plays, is necessary to navigate the future and maintain competitiveness in the market. This article outlines 5 supply chain trends in 2024 by supply chain experts Anders Remnebäck and Fredrik Jersby that you shouldn’t ignore.

1. Robotics and autonomous vehicles will revolutionize last-mile delivery

There is a huge wave of technological progress underway, leading to advancements and breakthroughs. Robotics and autonomous vehicles are at the forefront of this transformation, although it has taken longer and proven to be far more challenging than anticipated.

The ultimate challenge lies in achieving fully autonomous vehicles capable of navigating entirely new urban environments without prior training or constraints in that particular area. This involves more than simply getting from point A to point B; it is about mastering complex real-world scenarios.

Similarly, integrating robotics into human environments presents its own set of challenges. But if we can create bots with human-like abilities, from ordinary tasks to understanding nuanced contexts, and combine this with fully autonomous vehicles, last-mile deliveries will be revolutionized.

Having a vehicle that efficiently travels from point A to point B is one thing. Still, the last 20 meters present a unique challenge: delivering the package, navigating to the building, ringing the doorbell, or leaving the package securely. Without solving this final leg, the efficiency of reaching point B is diminished.

It is evident that we are steadily progressing in this direction, leveraging technologies like reinforced learning, and neural networks. Once all the necessary components align, the impact on the entire supply chain will be profound.

As one of the founders of Skype pointed out, this could even make delivering something as small as a single toothbrush profitable. The question is: How long will it take to fully realize this vision?

2. AI and automated decisions will replace humans

In the past year, there has been explosive growth in reinforced learning and neural networks, opening new possibilities for supply chain planning. We foresee that this advancement will pave the way for digital supply chain planners and autonomous supply chains capable of making decisions based on sophisticated models.

We are moving towards a future where human involvement in decision-making becomes less prominent, mirroring previous transitions in technology adoption. Historically, we transitioned from manual processes to automation with the introduction of industrial robots, followed by the integration of Enterprise Resource Planning (ERP) and advanced planning tools.

As more decisions become automated, this shift may lead to a reduction in the roles of middle managers. However, humans will continue to play a pivotal role, becoming more involved in dialogue and collaboration with automated systems. Human expertise will remain essential in guiding and fine-tuning these automated processes to align with strategic objectives and evolving market dynamics.

3. Electrification will impact industries unable to transition fast enough

The transition to electrification is a critical trend that calls for urgency. The scale and complexity of shifting the world from fossil fuels to renewable energy are immense but inevitable. It won’t happen overnight; rather, it will unfold gradually, with hybrid solutions emerging before complete electrification.

And there will be winners and losers. For companies reliant on fossil fuel-driven transportation, understanding and planning for this transition is paramount. However, this requires a certain scale and capability. Companies with legacy investments in outdated technologies will struggle, while others, like Tesla, are poised to accelerate this transition through vertical integration.

In Europe, the failure of car manufacturers to adapt to electrification could have significant consequences on jobs and compliance with new regulations, such as bans on gasoline and diesel cars.

In essence, the electrification trend represents not only a technological but also a geopolitical shift with far-reaching consequences. Only companies that proactively plan and innovate will thrive in this new era of sustainable energy.

4. The transition from on-premise software to cloud will bring challenges

There has been a noticeable shift towards cloud services, with companies increasingly favoring web-based solutions over traditional on-premises setups. Initially driven by consumer-oriented needs, this trend has extended to the entire Enterprise Resource Planning (ERP).

Moving critical transactions and data to the cloud offers significant cost benefits. However, this transition may also introduce limitations on flexibility and adaptability, raising concerns about potential lock-in effects, integration costs, and data accessibility.

One pressing question is whether cloud systems will become more closed and rigid or if customers will demand greater access and interoperability. As companies navigate this transition, it is important to carefully evaluate the trade-offs and consider their long-term strategic objectives.

5. A turbulent world will demand a shift in supply chain strategy

We find ourselves in a new era marked by significant turbulence globally. From war and conflicts to climate change and new legislation. This increased unpredictability has underscored the importance of supply chain and the ability to withstand disruptions.

As a result, the interest in scenario modeling and understanding the consequences of events is rapidly growing. More companies recognize the need to invest in people who understand supply chains and systems that can help them swiftly react to events when they happen – and more importantly – proactively anticipate and mitigate risks.

To reduce risk exposure, many are moving towards more regional and local supply chains. This shift represents a departure from the previous focus solely on cost optimization. While centralizing operations can offer cost savings, there are risks associated with a single point of failure. The expenses of redundancy are now outweighed by the potential consequences of its absence.

At the same time, new sustainability legislation is reshaping supply chains, mandating not just reporting but also restructuring supply chain operations for compliance. This means companies will want to balance sustainability with cost and risk as well as service levels to make trade-offs and conclude when to use which strategy.

To navigate these changes effectively, companies must establish robust foundations for decision-making. Planning is key, and continuously exploring alternatives and scenarios and developing action plans are crucial to meet future challenges.

Authors Fredrik Jersby and Anders Remnebäck have deep knowledge and vast experience in the supply chain field.

Do you need the help of a supply chain expert?

Understanding the ramifications of these changes and trends is paramount. Remaining stagnant is not an option; instead, embracing a forward-leaning approach is essential for adaptation and success. The goal is to create supply chains that are resilient, adaptable, and sustainable, capable of weathering the storms of an increasingly turbulent world.

At Optilon, we are experts in efficient supply chain decision-making. Our solutions help businesses design and optimize their supply chains through well-proven processes and technology. We can help you create a future-state roadmap with scenario comparisons and analyses. We can assist in articulating supply chain complexity and relevant actions, evaluate the consequences and risks, and make decision recommendations. Sounds interesting?

Book a meeting today.

As the year comes to an end, we look back on all the important things we’ve learned in 2023. The supply chain industry keeps going through changes, making it important for businesses to stay updated with the latest trends and smart ways of operating.

During this year, we have shared a lot of knowledge and expertise about supply chain. In case you’ve missed it, we have summarized our three most popular articles from this year. Check them out and happy reading!

The time to embrace supply chain is now

The world has changed a lot recently, with a global pandemic, wars, and economic uncertainties. This has made it crucial for businesses to rethink how they handle their supply chains. Companies are moving away from just focusing on cost and looking more at reducing risk, improving speed, and ensuring sustainability. Shifting to local supply chains might seem like a solution, but it’s not a one-size-fits-all fix. Want to know more? Read the full article here       

7 Global Supply Chain Trends in 2023

In this new global environment, businesses also need to adapt to emerging trends. In this article, you will find important shifts in supply chain strategies, emphasizing the paradigmatic move from cost-centric approaches to risk awareness. It highlights trends such as reshoring, differentiation, and the growing importance of sustainability and transparency. These trends signal a transformative era where supply chain design and digitalization take the center stage. Maybe these trends will follow us into 2024? Read the full article here.

Discover the Potential of Your Inventory Through Smart Supply Chain Planning

Are you struggling with balancing inventory? You are certainly not alone. Balancing inventory in a changing market has become a big challenge for Nordic businesses. But there’s good news: smart planning can help you make the most of your stock and improve your supply chain. Read the full article to understand how, so you can pave the way for supply chain success.

Thank you for an incredible year filled with valuable supply chain insights. We’re looking forward to what 2024 has to bring. Are you looking for any other information about Optilon? You can find more information on our web page or get social with us on LinkedIn. Make sure to follow us there so you don’t miss any news, tips, or opportunities. 

The transition from a solely global to a more balanced global-local supply chain is not without challenges. However, it is a necessary evolution to navigate the multifaceted global business landscape. But how? Here are 4 step on how to balance global and local in supply chain.

How to balance global and local in supply chain

Prescriptive algorithms, like Linear and Mixed Integer Linear Programming (LP/MILP), are powerful methods commonly used for Network Optimization problems. Network Optimization can be used to mathematically solve complex supply chain problems. These problems can be related to logistics, facility location, resource allocation, inventory positioning, and the flow of goods. The goal is to minimize costs, meet service requirements, and maximize performance metrics, all while considering various conditions and assumptions.

Combined with massive scenario analysis, Network Optimization models allow you to gain insights not only into the uncertainties stemming from our unpredictable world, but also those created by the limitations in available data and its quality.

4 steps toward a balanced global and local supply chain

Here are 4 steps to achieve a more balanced supply chain using Network Optimization models.

1. Carry out scenario analysis of local versus global needs

Network Optimization models can be used to analyze how different levels of glocalization impact your supply chain. It helps you understand the effects of global versus local strategies across different regions, segments, and phases of the product life cycle. By testing different demand scenarios, the models provide insights into configurating a global-local supply chain to meet demand changes in different markets.

2. Optimize cost, service, and risk adjustments

Network Optimization models can analyze cost trade-offs between global and local strategies, such as transportation, customs, or local compliance costs. It can also assess the impact of glocalization on service levels, such as response times to market changes and customer lead time. They can also evaluate the impact of supply disruptions and assist in designing a supply chain that mitigates risks associated with geopolitical issues or other global disruptions.

3. Improve sustainability and regulatory compliance

Network Optimization models can help you analyze the carbon footprint of different supply chain configurations and design a supply chain that aligns with your company’s sustainability goals. When it comes to legal adherence, it can capture the costs and implications of regulatory compliance across different regions under various glocalization scenarios.

4. Optimize capacity planning and multiple objectives

Network Optimization models can help you optimize production and distribution capacities to meet demand in the most cost-effective manner, in alignment with the global-local configuration. It can also facilitate multi-objective optimization to achieve a balanced approach between global efficiency and local responsiveness, along with other objectives.

Do you need advice from a supply chain expert?

At Optilon, we see the Network Optimization model as a cornerstone of long-term strategic planning and an ideal tool for analyzing the impact of glocalization. We support a modern implementation that relies on thorough scenario analysis, aims for automating the analytic process, and becomes part of your ever-evolving decision-making process.

Contrary to common beliefs, we argue that the “algorithmic approach” is not about finding one perfect answer. Instead, it is about increasing organizational awareness of various possibilities. This heightened awareness will empower you to consistently make well-informed decisions, especially in the face of uncertainty.

Do you need advice on balancing global versus local in your supply chain? Book a meeting with one of our supply chain experts today.

S&OP is a critical business process for transforming strategy into execution and driving supply chain performance. Even though technology has advanced, many companies are still stuck using old-fashioned and inefficient methods, And there are some big misconceptions that are getting in the way. They exist because businesses don’t fully understand what S&OP is really about. It is time to debunk the myths.

What is S&OP?

Let’s begin by discussing what S&OP – Sales and Operations Planning – actually entails. S&OP is a forward-looking planning process, superior to the operational process and subordinate to the strategic process, bridging the gap between the two. It serves as a mechanism for aligning a company’s strategic objectives with its operational activities. 

S&OP is used to continuously identify disparities between a company’s desired goals and its current trajectory, and find strategies for closing these gaps. This can include a range of actions, such as intensifying sales efforts within specific markets or product segments, increasing manufacturing capacity to meet projected demands, or reallocating resources to areas where they are more effectively used. In essence, S&OP is a structured approach to navigate a company toward its desired future state.

5 myths about S&OP – let’s debunk them

Now, let’s clear up some common myths and get to the bottom of the real value of S&OP.

Myth 1: S&OP is not a relevant operational process today

The concept of S&OP originated in the 1950s, evolving from a production-centric approach to enhance efficiency. It was never designed to be a process for gaining detailed knowledge of every aspect of a company’s operation. Instead of striving for operational precision, S&OP is a tool for planning and fostering flexibility. Today, the fundamental need for tactical planning persists.

Many of today’s companies find themselves caught in the ”too late corner.” They primarily focus on assessing their order backlog for the next couple of months, and as a result, they struggle to maintain control and end up spending their time putting out fires.

To overcome this, it is not viable to merely focus on the short term and hope for the best. Looking further into the future and making the most of the information you can capture is essential. Companies must adopt a broader perspective and examine the dynamics of supply and demand across extended time horizons. This entails not only periodic assessments but also frequent monitoring to identify fluctuations and their recurring patterns. A key objective is to understand the flexibility required and how quickly you should adjust your capacity.

Myth 2: It is not worth it, as we cannot predict the future anyway

S&OP is not about predicting the future – it is about planning for the future. Sure, you can use it to analyze historical sales data and create forecasts to align supply with demand. But to unlock the true potential of S&OP, it should be used to understand where your business is today and where you want to be in the future. What is your current trajectory, and what is your desired destination?

This approach places you in control rather than at the mercy of the process. It allows you to gently steer your business in the intended direction. You can accelerate, decelerate, and manage marketing and capacity efforts accordingly.

Used correctly, S&OP is a multifaceted decision-making and gap-bridging process designed to guide your company toward its strategic objectives. It is not about predicting the future – it is about understanding the evolving reality that lies ahead.

Myth 3: S&OP is yet another time-consuming planning process

If this sounds familiar, it might be time to ask yourself this question: How much of your time do you spend on firefighting? The answer might reveal a significant gap in your organizational structure – an absence of a well-defined S&OP process.

As the old saying goes, ”If you don’t plan, you plan to fail.” This is especially true when it comes to S&OP. While it isn’t a magic bullet that guarantees flawless outcomes, it serves as a cornerstone for informed decision-making and facilitates a culture of collaboration.

Imagine sending eleven soccer players onto the field without briefing them on their roles, the game strategy, or whether they should play defensively or offensively. Chaos would occur, and the chances of succeeding would be fairly small.

In the world of S&OP, the scenario is strikingly similar. Planning not only saves you from the chaos of reacting to problems as they arise. It also grants you a more transparent path toward achieving your objectives. S&OP, when executed right, is not just another planning procedure, but a value-adding mechanism.

Myth 4: S&OP is solely a supply chain issue

This myth is rooted in a silo mentality where each department operates in isolation, failing to communicate or collaborate effectively. This is often driven by performance metrics solely tied to individual functions. A ”you handle yours, and I’ll handle mine” attitude dominates the workplace, and the overall success of the company – which should be the primary objective – becomes overshadowed.

In contrast, S&OP is the opposite of this approach. It shifts the individual focus towards an integrated plan and places the organization within an ecosystem where all departments work together towards a common goal, collectively contributing to the company’s success. The breakdown of traditional silos and adoption of a broader perspective fosters collaboration. Succeeding in S&OP is very much connected to acknowledging interdependence and prioritizing collective performance.

In summary, S&OP is not just a supply chain concern. It is a collaborative effort that involves the entire organization, including sales, operations, product development, finance, sourcing, procurement, and marketing.

Myth 5: A fancy S&OP tool is overkill when we have spreadsheets

Even though technology has advanced, many companies still rely on spreadsheet programs such as Excel or rule-based processes in ERP systems to manage their S&OP. So, isn’t using spreadsheets good enough? Well, it depends on the purpose.

Excel is a great tool for creating prototypes to test ideas in the context of S&OP. However, it is primarily designed for data input and manipulation rather than supply chain planning. As it relies on manual data entry, it has significant limitations in supporting comprehensive planning requirements, making it prone to errors.

The problem usually arises as organizations grow in their product portfolio, markets, or volumes. The more data they put into the system, the more complex it gets. This often leads to shortcuts and inaccuracies, making it inefficient and difficult to manage. Consequently, businesses may experience higher costs and operational inefficiencies.

Relying on spreadsheets for supply chain optimization and critical business decisions simply isn’t sustainable. Companies need to realize that spreadsheets must be replaced with more robust solutions for S&OP that support their future business requirements.

Do you want to improve your S&OP process?

Don’t settle for outdated S&OP methods. It is time to say goodbye to manual and tedious Excel corrections and welcome a highly flexible and easy-to-use solution. ​

With a track record of over 1,000 successfully completed projects and a 30-year integration heritage, Optilon is a trusted supply chain optimization partner.

Our flexible system for S&OP can be tailored to align with your specific processes while remaining adaptable to your evolving business needs. It is easy to implement and offers effortless integration with other systems to streamline your operations seamlessly.


Contact us today to book a meeting. We can help you align strategy with operations and navigate you toward your desired future state.

Supply chain has always been a vital aspect of business operations, but recent worldwide events have highlighted just how critical it is. How can companies take advantage of this new supply chain era? Can AI and robotics revolutionize the industry? How does China shape the future of trade? That’s just some of the topics that were discussed during the Optilon Supply Chain Conference 2023, held September 7 in Stockholm.  

With the theme “From Boring to Boardroom,” the conference delved deep into the world of supply chain management, showcasing its critical role in today’s ever-changing business landscape. One key finding was that there is now a strong human component to an industry that is very much tech orientated. Storytelling is and will be a big part to this multi-dimensional aspect of supply chains forward.  

The conference had a lineup of distinguished speakers, panel discussions, and networking opportunities that left all of us inspired and empowered. Did you miss the event? Here is a recap! 

EXPLORING THE SUPPLY CHAIN LANDSCAPE  

The conference welcomed over 250 supply chain professionals, eager to gain insights into the future of supply chain management. The day started off with a thought-provoking keynote by Christina Boutrup, who shed light on “The China Factor” and how it shapes the future of trade.   

Throughout the day, attendees were treated to a diverse range of perspectives and expertise from industry leaders:  

Katarina Blomkvist, in her session on “Building the Supply Chains of Tomorrow”, emphasized the importance of innovation and adaptability in supply chain management.  

Jesper Metz from H&M discussed “How Supply Chain Analytics Create Clarity and End-to-End Optimization”, showcasing the power of data-driven decision-making.  

Danica Kragic from KTH delved into “Machine Learning, Artificial Intelligence and Robotics”, highlighting both the hopes and challenges they present for the future of supply chain management.  

Nicklas Jonsson from Exeger explored how they revolutionized the field with Powerfoyle – a unique solar cell that transforms all forms of light into electrical energy. 

Patrik Johansson from Stora Enso shared an inspiring success story about projects that included machine learning for network optimization. He also presented how you can exceed expectations demonstrating how innovation can push boundaries through creativity.

EXPERT PANEL DISCUSSION

The conference also hosted an expert panel discussion that explored how supply chain management has evolved from a boring topic into a critical boardroom discussion. The panel included Unni Olldén (Synsam Group), Gabriella Norén (AIRA), Richard Molin (Höganäs), and Jens Stenquist (Optilon), offering valuable insights into the challenges and opportunities facing the supply chain industry.

CONNECTING SUPPLY CHAIN PROFESSIONALS AND NETWORKING 

One of the standout features of the conference was the networking sessions. Attendees had the chance to connect with like-minded professionals together with good food and bubbly drinks.  We heard discussions about everything from how companies retrieve their inventory to how e-commerce affects supply chain planning. You could really feel the atmosphere in the room – it was electric.  

LOOKING FORWARD  

As the Optilon Supply Chain Conference 2023 concluded, attendees left with renewed enthusiasm. The event showcased that supply chain management is no longer perceived as “boring” but rather as a dynamic field driving innovation. 

STAY TUNED  

In case you missed this conference, or want to share it with a colleague, we have gathered all the inspiring keynote presentations and the panel discussion and will launch it soon! Follow us on LinkedIn if you want to be the first one to know when the recordings are live. 

Are you struggling with balancing inventory? Today, many Nordic businesses face major challenges in matching their inflated stock levels and assortment of products with changing customer demands. The quest to maintain a high service level while minimizing costs remains a top priority, although now it seems more difficult than ever. Fortunately, smart supply chain planning can unleash the potential of your inventory and pave the way for supply chain success.

Why do businesses struggle to balance inventory?

In the midst of a global pandemic that profoundly disrupted the global supply chain, our current macroeconomic landscape has taken shape. With significantly reduced shipping capacity and prolonged lead times from Asia, businesses faced the challenge of meeting customer demands by placing substantial orders to stock up on inventory.

Fast forward a few years, and we now find ourselves grappling with high-interest rates and inflation. These economic forces have propelled a significant change in consumer behavior. Consumers are now favoring more affordable products over their pricier counterparts. Consequently, businesses have also adapted their supply chain strategies, stocking more inexpensive items to cater to these changing customer needs.

High inventory levels and the wrong product mix

This shift, however, has unwittingly given rise to a particular problem – the overstocking of higher-priced items. The current product mix is simply mismatched and does not align with the new customer needs. This is now causing large financial strains on businesses.

Previously, when interest rates remained low, companies focused on providing a high service level, and they could maintain extensive product inventory without incurring significant costs. Now the scenario is vastly different. Obtaining desired stock has become increasingly expensive, and the bottom line is directly impacted by percentages.

To cope with this, many businesses find themselves resorting to significant discounts to reduce their inventories, or they simply hit the brakes in an attempt to handle the situation. However, this scenario may eventually lead companies to face a ”bullwhip effect”, resulting in empty shelves and disorganization throughout the supply chain.

High inventory levels and the wrong product mix

Discover the potential of your inventory

Instead, this situation calls for careful consideration of inventories to ensure a balanced mix of products. The more complex the supply chain, the more critical the inventory management. And as the complexity grows, so does the need for digitization, robust system support, and control.

For today’s companies, it is important to understand where the forecast lies. Keeping tabs on demand has always been valid, but it has now reached a new level of importance. The large expenses of maintaining product inventory heighten the need to align stock levels precisely with customer preferences.

Despite this, a vast majority of supply chain data correction is still today handled manually in Excel or via rigid and rule-based processes in ERP systems. These traditional systems are primarily designed for data input rather than supply chain optimization. This often leads to an accumulation of slow-moving items with irregular and sporadic demand patterns. As a result, businesses face increased costs and inefficiencies.

To maximize the true potential of your inventory, a System of Differentiation (applications dedicated to handling specific business needs to reach a competitive edge) – rather than a System of Record (applications and ERP systems dedicated to handling the most basic and critical data need and processes) – is required.

Use a smart supply chain planning platform

A smart supply chain planning platform can be tailored to optimize a company’s specific supply chain operations. It leverages advanced algorithms and intelligent automation to provide the insights needed to make informed decisions and take proactive actions.

A modern supply chain planning system will provide a high service level for the end customers by securing the right product mix, while still keeping inventory levels low.

Companies can maintain a high service level not only during peak periods or with high-volume items but also with products sold sporadically. It ensures an efficient operation while keeping inventory levels low or at their optimal point.

By implementing the right system support, businesses can experience remarkable cost savings. On average, stock levels can be reduced by as much as 30%. Imagine the impact that saving such a significant amount of money can have on your bottom line.

Moreover, a smart supply chain planning platform eliminates the need for manual work. Automating time-consuming tasks liberates planners to focus on more rewarding activities, such as proactive risk assessments. This allows them to contribute strategically to the company’s success and drive growth.

To sum it up, your company will benefit from a higher level of service, ensuring customer satisfaction and loyalty. Simultaneously, inventory levels will be optimized, enabling you to strike the delicate balance between meeting demand and minimizing excess stock. Furthermore, the automation provided reduces operational inefficiencies and streamlines your processes, paving the way for increased productivity and profitability.

A large network of supply chain experts at your service

At Optilon, our expertise stems from a rich 30-year integration heritage, empowering us to seamlessly integrate solutions for production planning, demand forecasting, inventory optimization, and replenishment. With a vast network of 50 supply chain experts in the Nordics, we offer unparalleled support to our clients.

Don’t settle for outdated methods. Contact us today and discover how we can help you transform your business. It is time to step into the future of supply chain planning.

Let us help you unleash the potential of your inventory. Book a meeting today!

Is your supply chain a growth driver for your business? If not, it is time to take a closer look at supply chain design. A well-designed supply chain can transform your business by increasing efficiency, reducing costs, improving customer satisfaction, and providing a competitive edge. In this blog post, we will explore 7 ways supply chain design can transform your business and turn challenges into opportunities.

What is supply chain design?

Supply chain design is the process of creating an optimal strategy for moving goods from suppliers to end customers. It involves building an optimal network of organizations, people, activities, information, and resources involved in the production, handling, and transportation of goods. It includes a range of tactical as well as strategic decisions. 

Some examples are defining the optimal warehouse footprint or where to invest in production capacity based on a point-of-gravity or greenfield analysis. Other decisions involve optimizing sourcing based on total landed cost, analyzing the transportation system, or managing resources throughout the supply chain. Additional examples are balancing supply and demand based on lowest cost or highest profit or conducting a cost-to-serve analysis to gain insight into the actual cost of reaching each customer.

Now that we have sorted out what supply chain design is, let us explore 7 ways supply chain design can transform your business.

1. Become proactive rather than reactive

One common misconception about implementing supply chain design is that it is a large and complicated task that only needs to be done occasionally. This cannot be any further from the truth. Yet, many companies engage in supply chain design reactively, after a crisis, or repetitively but too rarely.

By using a structured supply chain data model, companies can empower their supply chain design process and become proactive rather than reactive. By testing different strategies in a sandbox environment, companies can improve their supply chain design and be better prepared when crises occur – or avoid them altogether.

2. Effectively balance supply chain key factors

While supply chains are becoming increasingly complex and data volumes continue to rise, businesses are facing greater challenges in achieving the optimal balance between cost, service, risk, and sustainability. Making the best decisions in this context requires a delicate equilibrium between all these dimensions.

Fortunately, advanced algorithms offer a way for companies to continually review and adapt their strategies, ensuring they are making the most informed decisions that effectively balance these key factors. By leveraging the power of data-driven insights, businesses can fine-tune their operations to reduce cost, deliver exceptional service, minimize risk, and promote sustainability.

3. Respond more effectively to changes

The current macroeconomic situation has created a pressing need for businesses to reduce the time it takes to answer critical business questions. Supply chain leaders are exposed to more questions in shorter time spans than ever before.

A robust supply chain design process that incorporates an end-to-end data model and purpose-built applications empowers leaders to take control of their data and develop strategies to respond more effectively to changes. By adopting new technologies and a continuous supply chain design process, companies can respond more effectively to changes and turn their supply chain challenges into competitive advantages.

4. Make fact-based supply chain decisions 

Given the complexity of supply chain and the increasing demand for fast decisions, it can sometimes be challenging for companies to find the time to get the facts on the table and conduct a thorough analysis. Many companies still rely on spreadsheets, which often lead to hasty shortcuts and inaccuracies.

To stay ahead of the competition, leading companies are turning to modern technologies to fundamentally rethink and transform their supply chain processes. By using advanced tools and techniques, they are able to gain a deeper understanding of the complexities of their supply chain networks and leverage continuous scenario planning.

Companies that successfully incorporate network optimization applications into their decision-making processes gain insights that were previously impossible to obtain solely through experience. Furthermore, these tools provide an objective view of the data, which can challenge long-held assumptions and lead to more accurate decision-making.

5. Increase long-term supply chain resiliency

In supply chain design, the traditional trade-offs have been focused on cost, service, and risk. In recent years, also sustainability has been taken into account while ESG (Environmental, Social, and Governance) has become increasingly important. However, the prevailing approach has still prioritized cost, giving it a higher weight in decision-making. This has led to trade-offs that prioritize short-term cost savings over long-term resilience. But fact remains that a resilient supply chain is critical not only during times of crisis but also in everyday business operations.

To address this challenge, it is essential for companies to balance resilient thinking with the need for faster decision-making. This requires having alternative options already in place and maintaining them over time, so that reactive decision-making can be avoided in favor of strategic analysis. By adopting a long-term perspective, companies can ensure that cost-efficient decisions are also resilient and sustainable over time.

6. Allow for multiple users of supply chain technology

Historically, advanced technology in supply chain design has only been accessible to a select few. This has resulted in bottlenecks and prevented companies from realizing the full potential of running multiple scenarios in a short time span. But with today’s technology, it is possible to create personalized user experiences and bespoke applications that cater to the needs of a much larger pool of users. This allows for tailored solutions where more stakeholders can conduct the scenario analysis.

7. Improve collaboration through increased visibility

The supply chain design process plays a crucial role in increasing supply chain visibility. It not only offers a holistic view of the end-to-end supply chain. It also includes potential future supply chains generated by what-if scenarios. This enables companies to establish a common analytic platform and view of data, rather than creating silos with multiple versions of the same information.

By adopting this approach, all analytical tasks within the supply chain can be based on the same data and assumptions. These can be governed and maintained in a cross-functional arena, promoting collaboration and enhancing efficiency.

Are you ready to take your supply chain to the next level?

I hope this article  gave you some useful knowledge and insights into how supply chain design can transform your business and turn challenges into opportunities. At Optilon, we know that navigating the complexities of supply chain design can be challenging. But the rewards are truly game-changing. By implementing sustainable supply chain design strategies, you increase your chances of beating the competition.

Are you ready to take the leap and revolutionize the way you do business? Our team of experts is here to guide you every step of the way. Don’t let your competitors get ahead – contact us today and let us embark on this exciting journey together.

Yes, I am ready to beat the competition. Let us book a meeting today!

Want to stay in the loop with the latest in supply chain optimization? Join us on LinkedIn!

The past eventful years have had a profound impact on global supply chains. It has exposed vulnerabilities in the system and highlighted the need for resiliency. In this context, supply chain design has become increasingly critical. For many businesses, it may seem like a massive challenge lies ahead. But the reality is the time to embrace supply chain is now. Companies that see and make good use of the opportunities presented in this new supply chain era we are entering can achieve significant competitive advantages now and in the future.

Macroeconomic effects on the global supply chain

A lot has happened in the world lately. We are now living with the legacy of a transformation that has taken place in the past few years. It started with the coronavirus outbreak leading to shutdowns of factories as well as ports worldwide. This had a massive impact on global supply chains and challenged many businesses worldwide. Then, as we all hoped the pandemic would be the worst hit of the decade, the invasion of Ukraine happened. Sanctions against Russia, increased inflation rate, and higher global commodity prices, among other consequences, caused further disruptions in global supply chains.

We now find ourselves in a macroeconomic situation where geopolitical events and new economic conditions are forcing companies to really think about their supply chains: How resilient are they? And what is the best strategy to stay competitive in the global market?

The focus has shifted

Five years ago, few raised an eyebrow when businesses decided to source energy from countries such as Russia or move production to low-cost countries such as China. But now, due to the current state of the world and increased vulnerability, priorities have changed. The focus has shifted from keeping costs down to minimizing risk exposure, shortening lead times, improving service levels, and ensuring supply chain sustainability.

Businesses are no longer willing to take the risks involved in long-distance sourcing, and they are becoming more selective in which countries they choose to do business with. At the same time, supply chain sustainability has emerged as a key corporate goal. Due to stricter laws and regulations but also increased consumer demands, businesses must now navigate a new regulatory landscape and manage both supply chain risks and opportunities related to environmental, social, and governance criteria.

Are local supply chains the answer to vulnerability?

As a response, many companies are considering shifting from a global to a regional supply chain setup. While this has quickly become somewhat of a global megatrend, it is, however, important not to jump on the bandwagon just for the sake of it.

Here is an example: A global medtech company provides the European market with hearing aids. They produce their products in China to keep costs down. But now they decide to move their production closer to their customers in Europe. By moving the production to Europe, they hope to reduce vulnerability in the supply chain. However, in Europe, there are no suppliers that can provide the medtech Company with the material they need to produce their hearing devices. The medtech company ends up having to still source the material from suppliers in China. Although production is now closer to their European customers, the problem remains.

Add to the equation the complexity of a much broader product portfolio with multiple suppliers, production sites, distribution points, logistics partners, network nodes, customer segments, and markets – and you can imagine the challenge.

How to design an optimal supply chain

Shifting from a global to a local supply chain setup is not a universal solution that fits all. In fact, there is no “one size fits all” solution for optimal supply chain design. Each company needs to thoroughly analyze their current supply chain setup to design the best solution for their business. The first question to ask is: What is the most important for my business? Is it reducing cost, minimizing risk exposure, shortening lead times, improving service levels, or ensuring a sustainable supply chain?

The answer will be different for every company. Here are a few examples:

For a company that produces standard products, keeping costs down is probably central as their customers are only willing to pay so much. A company that sells spare parts probably prioritizes fast delivery times over cost as their customers will immediately turn to competitors if they have to wait for the products – and they are probably prepared to pay extra for that. A retail company with high requirements for recycling materials and lowering CO2 emissions probably has sustainability on top of its agenda – and so on.

How to design an optimal supply chain

Most companies are likely to seek a balance between all the dimensions – cost, risk, lead time, service level, and sustainability to make trade-offs between risks and gains and conclude when to use which supply chain strategy or setup.

In addition, today’s debate is very much centered around supply chain from a supply perspective. But equally important is the customer perspective. Businesses need to think not only about what provides orders but also what provides customers: What requirements do customers have in terms of cost, time, service, and sustainability? And what are the consequences of these requirements on the supply chain?

The new supply chain era brings possibilities

For many businesses, it may seem like a massive challenge lies ahead. But the reality is the time to embrace supply chain is now. Supply chain has gone from being a decentralized issue to becoming a CEO issue and a boardroom-level topic. In fact, the willingness to invest in supply chain has never been stronger. Now, post-pandemic, we are entering an era full of opportunities – and now is the time to make good use of them.

Do you want your supply chain to be a growth driver and engine for your business? Don’t just go with the flow and follow the next big trend. Ensure you put time and effort into analyzing your current setup in order to create a more agile, customer-focused, and resilient supply chain.

Do you need help from an expert?

Are you considering redesigning your supply chain to stay competitive in the global market? Perhaps, you are unsure what setup is the best for your company or what options or possibilities there are? At Optilon, we are experts in efficient supply chain decision-making. We help businesses build, strengthen, and optimize supply chain design through well-proven processes and technology. We can help you create a future-state roadmap with scenario comparisons and analyses, articulate supply chain complexity and relevant actions, evaluate the consequences and risks, and make decision recommendations. Sounds interesting?

Let Optilon unlock the potential of your supply chain. Book a meeting today!

Today, supply chain is not only an integral part of most businesses. In the wake of the pandemic, it has proven to be crucial to company success and customer satisfaction. Here are 12 supply chain phrases every company needs to know in the 21st century.

1. Supply Chain

Let us start with the basics: What is Supply Chain? A Supply Chain is a network of organizations, people, activities, information, and resources involved in the production, handling, and distribution of goods and services. It includes all the steps required to create and deliver a product or service – from purchasing raw materials and components – to manufacturing, distribution, and delivery to the end customer.

2. Supply Chain Management (SCM)

Supply chain management (SCM) refers to the planning, coordination, and execution of activities involved in the production and delivery of goods and services from the supplier to the end customer. SCM involves managing the flow of goods, information, and finances across the entire supply chain. The goal of SCM is to optimize the supply chain to maximize efficiency, minimize costs, and improve customer satisfaction. Activities include procurement, production, inventory management, logistics, transportation, and distribution. SCM also involves collaborating with suppliers and other partners in the supply chain to ensure that all parties are working towards a common goal.

3. Value Chain

Value Chain is a concept used in corporate management and strategic planning to describe the various activities carried out within an organization to create value for their customers. A Value Chain consists of several activities. They range from the start of the production process to the delivery of the final product to the customer. The activities in a Value Chain can be divided into primary and secondary activities. Primary activities are those directly involved in the production of a product or service, such as purchasing, manufacturing, marketing, and sales. Secondary activities are those that support primary activities, such as logistics, technical support, and personnel management.

4. Supply Chain Planning

Supply Chain Planning involves forecasting demand, determining purchasing volumes for safety stock, and scheduling production, transport, and distribution of goods and services. It is an important part of Supply Chain Management, as it helps to ensure that the right products are in the right place, at the right time, and in the right quantities.

Learn more about Supply Chain Planning here.

5. Supply Chain Design

Supply Chain Design involves building an optimal network of organizations, people, activities, information, and resources involved in the production, handling, and distribution of goods and services. It includes strategic decisions for where to place warehouses and manufacturing facilities, how to transport goods, and how to handle the flow of information and resources throughout the supply chain.

Learn more about Supply Chain Design here.

6. Supply Chain Sustainability

Supply Chain Sustainability aims to reduce the environmental impact and improve the social and economic performance of the supply chain. It includes activities such as reducing waste and emissions, promoting ethical and responsible purchasing, and supporting the well-being of employees and communities. Supply Chain Planning & Supply Chain Design are effective methods for minimizing the environmental impact of waste and emissions.

Learn more about Supply Chain Sustainability here.

7. Sales & Operations Planning (S&OP)

Sales & Operations Planning, also known as S&OP, is a process that involves the coordination of sales and operating functions within a company. It involves creating a long-term plan for sales, production, and warehousing and identifying and solving any conflicts or problems that may arise. S&OP helps to ensure that the company can meet customer demand while maximizing efficiency and profitability.

Learn more about Sales & Operations Planning here.

8. Supply Chain Optimization

Supply Chain Optimization is the process of improving and simplifying the supply chain by identifying and eliminating inefficiency and improving the flows of goods, services, and information. This can be done through various techniques such as forecasting, warehouse management, logistics, and transport management. The ultimate goal is to increase efficiency, reduce costs, and improve customer service.

Supply chain phrases

9. Supply Chain Digital Twin

A Digital Twin is a virtual representation of real-world supply chain operations. The live data can be used in everything from quality control to inventory management. A Digital Twin can be used by engineering, production, and maintenance teams to experiment with new approaches and what-if scenarios without disrupting the actual production. The data can be fed to Machine Learning predictive models to discover previously unknown operational patterns and aberrations. It can also be automatically input into decision models. A Digital Twin will ultimately help teams explore and understand the key drivers and trade-offs in optimized plans and decisions.

10. Supply Chain Visibility

Supply Chain Visibility means having control and insight into the entire supply chain, from suppliers to customers, to make informed decisions and handle any problems or deviations. Businesses can achieve through technology that collects data from relevant sources, such as Enterprise Resource Planning (ERP) Systems, Transport Management Systems (TMS), or Warehouse Management Systems. These can provide real-time data on key figures, such as warehouse product flows and estimated delivery times.

11. Scenario Planning

Supply Chain Scenario Planning aims to identify and analyze possible future events and their impact on the supply chain. This involves creating different hypotheses and evaluating how the supply chain would respond to each one. It helps organizations predict and prepare for any disruptions or changes in demand and make well-informed decisions on how to reduce risks and optimize the supply chain. Scenario Planning can also help organizations identify opportunities for improvement and develop backup plans for unexpected events. It is a proactive method for managing uncertainty and risks in the supply chain.

12. Demand Forecasting

Demand Forecasting is the process of estimating the amount of a product or service that customers will buy. Companies use Demand Forecasting to make well-informed business decisions about how much stock they need, how much they should produce, and what prices to set. It also helps companies identify trends and patterns in consumer behavior and predict changes in demand.

Is your supply chain resilient enough?

I hope you found these supply chain phrases helpful. In the past few years, supply chain resilience has become a hot topic – and with good reason. To ensure business continuity, mitigate risks, enhance customer satisfaction, improve operational efficiency, and meet regulatory and social expectations, today’s companies need to create future-proof supply chains. How resilient is yours?

Optilon focuses on helping customers utilize their resources where they generate the most value. We are a company founded by engineers that combine world-leading technology with Nordic expertise in supply chain.


Let one of our dedicated supply chain experts help you. Book a meeting today!

Supply chain consultants at Optilon have been helping Nordic companies become the most competitive in the world since 2005. After years of growth and an increased Finnish demand for the company’s services, Optilon is now opening its new office in Finland.

Optilon helps companies use their resources where they are most useful by combining leading technology and Nordic expertise in supply chain management. This includes simplifying and strengthening complex distribution chains and creating more optimal product flows, which in turn leads to less unnecessary resource consumption, less carbon footprint, and increased profitability and a smaller environmental impact. This has become increasingly sought after at a time when global trade and global distribution chains have been challenged by pandemics and Russia’s invasion of Ukraine.

Since its inception, Optilon has experienced strong growth, with steadily increasing sales figures. To meet customer needs, the company is now opening a new office in Helsinki, Finland.

– We have worked with Finnish companies for many years, but now we are scaling up our ambitions even further. Our goal is to double our turnover in Finland. By opening our first physical office in Helsinki, we can even better meet the needs of our existing customers, while fully focusing on winning new assignments. With this, we are also in need of recruiting new talents to the Finnish market, says John Wikström, Sales & Account Manager Finland at Optilon, responsible for establishing the company in Finland.

Supply chain management has risen higher on the agenda as many companies actively work to create more robust and sustainable flows. In fact, value chain emissions account for up to 70% of a company’s greenhouse gas emissions, according to UN estimates. Therefore, Optilon is now also strengthening its sustainability offering.

– We want to be where our customers are and help them solve their biggest challenges. For many, it is specifically reducing emissions from the supply chain. By measuring and including their emissions data from the start, designing with that in mind, and constantly optimizing their supply chain to reduce emissions, a company can make enormous climate gains. And we want to help them with that, both in Finland and in the Nordics, says John Wikström.

About Optilon:

Optilon is a consulting firm that helps its customers use their resources where they are most useful by combining world-leading technology with Nordic expertise in supply chain management. Optilon was founded in 2005 and is today active throughout the Nordic region with offices in Sweden, Denmark, and Finland.
www.optilon.com

For further information please contact:

John Wikström
Sales & Account Manager Finland
Ph: +358 400992919
e-mail: john.wikstrom@optilon.com

Tea Grbic
Brand & Marketing Lead
Ph: +46 761029751
E-mail: tea.grbic@optilon.com

Join us at the Optilon Supply Chain Conference 2023!

Learn from experts and supply chain leaders, and discover innovative solutions to help you stay ahead of the game. This event is free but there are limited tickets available.