Managing trade-offs across the supply chain
A key benefit of a predictive digital twin and simulation is that it gives clarity on trade-offs between seemingly conflicting processes, such as purchasing, production, inventory, distribution and sales.
For instance, should you pursue a strategy focused on local production with lower transport costs? Or one with lower-cost overseas production and higher transport costs?
North America used predictive simulation to develop a Sales and Operations Planning (S&OP) tool to answer questions like these.
The company has six US sites, each with different production mixes, consumption requirements and bulk storage constraints. Using a predictive digital twin deployed with WITNESS Horizon, Mars predicted the supply chain performance achievable from various configurations across the sites, gaining detailed insight into these dynamic processes for the first time.
This helped Mars understand the impact of key trade-offs. For example, would it be better to make all chocolate types where they’re required or build fewer, larger facilities and ship regionally? And what’s the best way to factor in the Mars corporate principle that it’s important to manufacture as close to customers as possible?
It also helped the company identify where future bottlenecks might appear and how they can best be resolved.
The parameterised S&OP simulation asset helped quantify the optimal way to work within these parameters. It provided deep insights into existing and planned operations, identified supply chain risks, and highlighted opportunities for cost savings and performance improvements.
As a result, Mars developed evidence-based business cases for new capacity programmes, ensuring it makes the right investments at the right time.