Leading Through Supply

Chain Design Excellence

Logistics Summit & Expo

Mexico 2014

© 2013 LLamasoft, Inc. All Rights Reserved

Agenda

Quick Introduction to LLamasoft

What is Supply Chain Design?

A Historical Accident vs. Engineered Reality

Supply Chain Design: Competitive Advantage• What is my Supply Chain Design Maturity Level?

• Closing the GAP

• The COE Imperative

Found Money in Jacket Pocket

Q&A

© 2013 LLamasoft, Inc. All Rights Reserved

LLamasoft Overview

• Develop their own capability for supply chain

design excellence

• Optimize their end-to-end supply chain

operations

• Reduce corporate risk and identify major cost

savings

• Perform continuous what-if analysis

• The global leader in Supply Chain Design

technology & solution services

• Focused 100% on Supply Chain Modeling &

Scenario Analysis

• Headquartered in Ann Arbor, MI with support

centers around the world

• The ideal partner for 1000s of companies to

excel in supply chain design globally

Who We Are

We Empower Companies to

© 2013 LLamasoft, Inc. All Rights Reserved

Recognition and Qualifications

Deloitte Fast 500

Gartner “Cool Vendors”

Pro’s to Know

Supply Chain Top 100

Clients include:

Largest global retailer

Largest company by revenue

Largest military supply chain

Largest public health initiative

30% of Fortune 100 supply chains

Supported More Than

1,500SC Design Initiatives

66% of Gartner’s

Supply Chain Top 25

© 2013 LLamasoft, Inc. All Rights Reserved

LLamasoft Industries

Automotive / Industrial Manufacturing Consumer Goods Defense

Hi-Tech / Electronics Food Beverage

Life Sciences Grocery Logistics

Apparel Manufacturing Petroleum

Public Health Retail Chemical

© 2013 LLamasoft, Inc. All Rights Reserved

LLamasoft Office Locations

Toronto

Ann Arbor

Mexico City

Bogota

Sao Paulo

Capetown

Sidney

Shanghai

Stockholm

ZurichLondon

© 2013 LLamasoft, Inc. All Rights Reserved

LLamasoft Customer Locations

Toronto

Ann Arbor

Mexico City

Bogota

Sao Paulo

Capetown

Sidney

Shanghai

Stockholm

ZurichLondon

© 2013 LLamasoft, Inc. All Rights Reserved

LLamasoft Timeline

• 35% of Budget Invested in R&D• 20+ PhDs in our Applied Research Team• 60+ Staff in our Development Team• Over 80% global growth last 4 years

© 2013 LLamasoft, Inc. All Rights Reserved

Agenda

Quick Introduction to LLamasoft

What is Supply Chain Design?

A Historical Accident vs. Engineered Reality

Supply Chain Design: Competitive Advantage• What is my Supply Chain Design Maturity Level?

• Closing the GAP

• The COE Imperative

Found Money in Jacket Pocket

Q&A

© 2013 LLamasoft, Inc. All Rights Reserved

What is Supply Chain Design?El Concepto

Design

Es el conjunto de estructuras, condiciones,

y políticas que caracterizan una cadena de

abastecimiento, las que constituyen su diseño.

El diseño de cadena de abastecimiento es útil

para crear la cadena que usted necesita hoy

y que requerirá mañana para ser competitivo.

Planeación

Conjunto de procesos y procedimientos para

preveer la ejecución antes de realizarla, sobre

una cadena de abastecimiento preexistente.

La planeación de la cadena de abastecimiento

es útil para la cadena que usted ya tiene hoy,

para administrarla lo mejor posible.

Zona de Clientes Planta Centro de Distribución

¿Quién diseñó esto?¿Cuál es el objetivo de este diseño?

© 2013 LLamasoft, Inc. All Rights Reserved

Supplier Production Distribution CustomerSupplier Production Distribution Customer

Supplier DistributionProduction CustomerSupplier Production Distribution Customer

What is Supply Chain Design?Test sobre Supply Chain Design

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© 2013 LLamasoft, Inc. All Rights Reserved12

Planning

Operational

Design

Hourly Yearly

Executing the plan

Optimizing the “As Is”Exception management

To Be StructureTo Be Policies

What-If PlanningRisk Analysis

M&ASustainability Analysis

80%

20%

Value

What is Supply Chain Design?La Ubicación & Oportunidades

© 2013 LLamasoft, Inc. All Rights Reserved

S&OP

Supply Chain Design

ForecastingDemand

Planning

Master Production Scheduling

Production

Scheduling

Transportation

Optimization

Allocation &

Promise

Management

Op

erat

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Supply Production Distribution Demand

13

Purchase

Execution

Production

Planning

Distribution

Planning

Purchase

Planning

Inventory OptimizationProduct Flow

Optimization

What is Supply Chain Design?La Ubicación & Oportunidades

© 2013 LLamasoft, Inc. All Rights Reserved

Agenda

Quick Introduction to LLamasoft

What is Supply Chain Design?

A Historical Accident vs. Engineered Reality

Supply Chain Design: Competitive Advantage• What is my Supply Chain Design Maturity Level?

• Closing the GAP

• The COE Imperative

Found Money in Jacket Pocket

Q&A

© 2013 LLamasoft, Inc. All Rights Reserved

The Historical Accident

© 2013 LLamasoft, Inc. All Rights Reserved

A Historical AccidentCurrent Supply Chain Structure

© 2013 LLamasoft, Inc. All Rights Reserved

A Historical AccidentCurrent Supply Chain Structure

© 2013 LLamasoft, Inc. All Rights Reserved

A Historical AccidentCurrent Supply Chain Structure

© 2013 LLamasoft, Inc. All Rights Reserved

A Historical AccidentCurrent Supply Chain Structure

© 2013 LLamasoft, Inc. All Rights Reserved

A Historical AccidentCurrent Supply Chain Structure

© 2013 LLamasoft, Inc. All Rights Reserved

The Engineered Reality

© 2013 LLamasoft, Inc. All Rights Reserved

Product Flowpath Analysis

© 2013 LLamasoft, Inc. All Rights Reserved

Port Flow Balancing

© 2013 LLamasoft, Inc. All Rights Reserved

Cost-to-Serve Optimization

© 2013 LLamasoft, Inc. All Rights Reserved

Capacity Modeling & Optimization

© 2013 LLamasoft, Inc. All Rights Reserved

Supply Chain Segmentation

© 2013 LLamasoft, Inc. All Rights Reserved

New Optimal Structure

© 2013 LLamasoft, Inc. All Rights Reserved

New Transportation Routes

© 2013 LLamasoft, Inc. All Rights Reserved

Service Coverage

© 2013 LLamasoft, Inc. All Rights Reserved

Sales & Operations Planning

Sales & Operations Planning

Pre-Position

Pre-Build

Demand

© 2013 LLamasoft, Inc. All Rights Reserved

Production Modeling & Simulation

Historical Inventory Pattern Simulated New Inventory Pattern

• 40% lower stocks.• Less warehouse space required• No expediting or exceptional costs• Regular stable pattern of orders

On-hand

In-transit

© 2013 LLamasoft, Inc. All Rights Reserved

An Engineered RealityWhat the Supply Chain Should be

© 2013 LLamasoft, Inc. All Rights Reserved

Agenda

Quick Introduction to LLamasoft

What is Supply Chain Design?

A Historical Accident vs. Engineered Reality

Supply Chain Design: Competitive Advantage• What is my Supply Chain Design Maturity Level?

• Closing the GAP

• The COE Imperative

Found Money in Jacket Pocket

Q&A

© 2013 LLamasoft, Inc. All Rights Reserved

Supply Chain Design: Competitive Advantage

Supply Chain DesignSupply Chain Design allows companies to thrive since it optimizes the terrain in which planning and execution is in control. A roadmap is then crafted based on this and suggested for improvement, always to be observed within the following in three capabilities technology, people, process.• Technology limits the following:

• Depth of studies• Variety of studies• Visibility• Speed of process and response• Flexibility• Training, Standardization, growth speed

• Opportunities in developing training, growth plans, career paths, COE build up and renewal

• Opportunity in building COE Supply Chain Design R&D

• Automation & Standardization, possibility of easily sharing knowledge and leveraging people.

© 2013 LLamasoft, Inc. All Rights Reserved

Excellence TechnologyHow we solve the COE problems

Technology Enabler for Supply Chain Design

NetworkOptimization

EnterpriseSimulation

InventoryOptimization

TransportationOptimization

Our interface to allow executives to easily visualize models and build scenario logic to share with modelers. Fixes the issue of communication in scenario definition and results presentation

Our solution to manage teams of modelers and integrate them to superusers & executives. File Sharing, logging, managing solving capacity, documentation, visibility of model status and custom dashboards to share via web.

Connect to, process, transform, clean all database information from any database available. Automate model and/or report building and graphs.

Benchmark Data For future Supply Chain Design.

Plus geocoding, product classification, demand classification, actual road networks, service area maps, 11 mapping options, reporting, dynamic tables.

© 2013 LLamasoft, Inc. All Rights Reserved

Capability DiagnosticsSuggested Gap Closure

Managing Design Processes

Project Methodology Supply Chain Design Software

Operating Model & Governance

Process & Tool Training Standard Tools & Templates

Design for Supply Chain

Commercial TechnologyPortfolio Management Process

Data Automation

Design Reuse and Best Practice Sharing

Supply Chain Innovation and R&D

Integrated Project Teams

Customized Technology

Continuous Planning

Processes Increasing

Capability

Maturity

SPACE FOR INNOVATIONB2B integration and collaboration

Process integration (process and data)

Process optimization

Continuous improvement unit

Partnering with Key Technology that evolves

above the competitive trends in the industry

MASTER ANALYTICSEnhanced and standardized capabilities

Portfolio management

Risk management

BUILD THE FOUNDATIONCore processes and capabilities

Standard work systems

Employee development

The evolution of processes, and people development should be aligned to a

policy of growing the capability maturity over time. Technology, process, and

people should be aligned with this trend, and empower the organization to be

able to follow this path.

© 2013 LLamasoft, Inc. All Rights Reserved

Agenda

Quick Introduction to LLamasoft

What is Supply Chain Design?

A Historical Accident vs. Engineered Reality

Supply Chain Design: Competitive Advantage• What is my Supply Chain Design Maturity Level?

• Closing the GAP

• The COE Imperative

Found Money in Jacket Pocket

Q&A

© 2013 LLamasoft, Inc. All Rights Reserved

Supply Chain Design Questions

What is my actual cost-to-serve

each product to each customer?

From whom should we source?

How should we flow each product

through the network?

Where and when should we produce

each product?

Where should we stock product?

How much inventory is enough to

meet my customer service

requirements?

How much should I buy and at what

price?

How should I ship my products?

© 2013 LLamasoft, Inc. All Rights Reserved

Our Value AddedBenchmark on Customer Savings

Reduction in Total

Logistics Costs

0% 20%5% 10% 15%

Reduction in Total

Inventory Costs

0% 20%5% 10% 15%

Reduction in Total

Transportation Costs

0% 20%5% 10% 15%

Service Level

Improvement

0% 20%5% 10% 15%

Flexibility Improvement0% 20%5% 10% 15%

Other Benefits Registered

• Supply Chain Visualization

and of impact of changes

done in supply chain

design

• Product Segmentation and

portfolio optimization

• Consolidate and

standardize global supply

chain design initiatives

• Custom reports of the

results of the supply chain

redesign exercise

• Direct integration with

transactional systems such

as SAP®, software is

certified

15 % – 20% In Cost Reduction in Supply Chain Design

39

© 2013 LLamasoft, Inc. All Rights Reserved

Visualization, Maps & Graphing

Service area maps precisely

display service distance using

actual street-level details

Apply a variety of risk indices to

output maps

GIS mapping with Google, Esri,

Bing, PC*MILER or nearly any

other provider

© 2013 LLamasoft, Inc. All Rights Reserved

Network Optimization

End-to-end model from tiers of

suppliers to the customer

Detailed modeling of complex

production processes, BOMs,

multi-time period capacities,

road routes, etc.

Comprehensive constraint

modeling

Fastest solve times on the

largest models

As-is supply chain

New optimal structure

© 2013 LLamasoft, Inc. All Rights Reserved

Enterprise SC Simulation

Proprietary Simulation Engine

• SimServer

• Open API

• Aggressive Ongoing

Development

Simulate the end-to-end

supply chain and product

detailed performance metrics

• Service

• Cost

• Logistics

• Sustainability

• Risk

© 2013 LLamasoft, Inc. All Rights Reserved

Product Flow-Path Optimization

Identifies how to best use the

newly-optimized network

Utilizes optimal network

design and creates flow

paths at individual item

levels

Balances the trade-off

between lot sizes, freight

rates, replenishment

frequencies, working capital

and lead time

© 2013 LLamasoft, Inc. All Rights Reserved

Evaluate Trade-offs Between Multiple Objectives

Multi-Objective Optimization

© 2013 LLamasoft, Inc. All Rights Reserved

Production Footprint Optimization

Platform for optimizing both

production capability and

capacity at a detail level

Balances production capacities

globally and within each facility

Optimize for maximum utilization

or highest margin (max profit)

Supports S&OP modeling for

near-term realignments

Primary Benefits

• Optimally align forecasts with

production footprint

• Rebalance production

capacities based on short term

changes in demand

Detailed Modeling of All Production-Related Processes and Capacities

© 2013 LLamasoft, Inc. All Rights Reserved

Demand Classification

Analyzes and properly classifies demand into one of

10 patterns, including non-normal and slow movers

Recommends control policies

Easy to set-up and use

Integrates with network optimization and simulation

Fast dynamic programming-based solver

© 2013 LLamasoft, Inc. All Rights Reserved

Multi-Echelon Inventory Optimization

True multi-echelon inventory right-sizing for all product types,

including fast movers, slow movers, intermittent demand, etc.

Optimal mix of postponement versus finished goods inventory

placement

Ability to simulate any inventory strategy to test service level

performance and capacity utilization

© 2013 LLamasoft, Inc. All Rights Reserved

Scenario Management

Create Multiple Scenarios within a

Single Model

Generate sensitivity ranges

around key costs, capacities,

demand characteristics, etc.

Self-documenting audit trail of all

scenario changes and definitions

Compare all scenarios side-by-

side in graphs, maps and reports

Data updates to the baseline

propagate through all scenarios

Key Benefits and Usage

Thanks.

For additional Information Visit us at Booth 102

Carlos Valderrama

Managing Director Latin America

Carlos.Valderrama@llamasoft.com

© 2013 LLamasoft, Inc. All Rights Reserved