Supply Chain Guru Network Optimization Tutorial. Version 8.2

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1 Supply Chain Guru Network Optimization Tutorial Version 8.2

2 Supply Chain Guru 8.2 Network Optimization Tutorial January 2015 Copyright 2015 LLamasoft, Inc. All Rights Reserved. PC*MILER and ALK are registered trademarks of ALK Technologies, Inc.

3 Contents Network Optimization Tutorial... 1 Audience... 1 Customer Support... 1 Before We Begin... 2 Part 1: Identifying the Problem... 3 The Tutorial Scenario... 3 Part 2: Starting With a New Project and Model... 5 Creating a New Model and Project... 5 Starting Supply Chain Guru... 5 Adding a new model... 7 Saving a project... 8 The Project Navigator... 9 Building Our First Model...10 Adding Data through Excel Import...12 Viewing Our Sites...14 GeoCode the sites...14 See the sites on the Geo Map...17 Improving the Map...18 Part 3: Using Policies to Control Data Organizing Data with Groups...21 Create Site Groups...21 Create a Product Group...24 Look at existing Groups...24 Adding Policies with Visual Modeler...24 Checking Our Policies on the Map...30 Part 4: Adding Costs and Working With Scenarios Adding Transportation Costs with Input Pipes...33 Expanding the Model...42 Adding a Scenario...44 Part 5: Optimizing and Analyzing the Model Ready for Optimization...51 So, What is Optimal?...54 Graphs and Answers...60 Final Analysis...62

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5 Network Optimization Tutorial Welcome to the Supply Chain Guru Network Optimization Tutorial. In this tutorial, you are guided through many of the model building and network optimization features of Supply Chain Guru, the leading network design tool for enterprise strategic planning and targeted supply chain performance improvements. This tutorial includes five parts: Part 1: Identifying the Problem Part 2: Starting With a New Project and Model Part 3: Using Policies to Control Data Part 4: Adding Costs and Working With Scenarios Part 5: Optimizing and Analyzing the Model The Tutorial Scenario Creating a New Model and Project Organizing Data with Groups Adding Transportation Costs with Input Pipes Ready for Optimization The Project Navigator Adding Policies with Visual Modeler Expanding the Model So, What is Optimal? Building Our First Model Viewing Our Sites Checking Our Policies on the Map Adding a Scenario Graphs and Answers Final Analysis Audience This tutorial is intended for LLamasoft customers using Supply Chain Guru for the first time, or previous Supply Chain Guru customers who require a review of the product s model building and network optimization functionality. Customer Support Supply Chain Guru users have access to Support.LLamasoft.com, which acts as a gateway to a vast array of resources, data, tools, and knowledge. LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2 1

6 Network Optimization Tutorial Before We Begin Before we begin the tutorial, please make sure that you have the Tutorial folder in your LLamasoft folder. To find this folder, go to the following location, substituting your actual user name for <Username> as indicated: Operating System Windows XP Windows Vista Windows 7 Location C:\Documents and Settings\<Username>\My Documents\LLamasoft\Tutorial C:\Users\<Username>\LLamasoft\Tutorial C:\Users\<Username>\LLamasoft\Tutorial You should have the following files: MasterData.xls TransportationRateTable.xls We will be using these files to create our first Supply Chain Guru model. Go to Part 1... Part 1 Part 2 Part 3 Part 4 Part 5 2 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

7 Part 1: Identifying the Problem Part 1: Identifying the Problem (here) Part 2: Starting With a New Project and Model Part 3: Using Policies to Control Data Part 4: Adding Costs and Working With Scenarios Part 5: Optimizing and Analyzing the Model The Tutorial Scenario Creating a New Model and Project Organizing Data with Groups Adding Transportation Costs with Input Pipes Ready for Optimization The Project Navigator Adding Policies with Visual Modeler Expanding the Model So, What is Optimal? Building Our First Model Viewing Our Sites Checking Our Policies on the Map Adding a Scenario Graphs and Answers Final Analysis The Tutorial Scenario In this scenario, your analysis team has decided to investigate alternate ways to source your three flagship products named products 1, 2, and 3 to your 50 customer zones across the globe. You have past historical demand data to make this decision, and transportation rate data to determine the best method to move products 1, 2, and 3 anywhere in the world. In addition to picking out the best locations, Management would like to understand the supply chain cost impact of not using the Brazil distribution center, and evaluate where the best alternate source for South America customers would be if the Brazil distribution center is not used. Management teams would also like to see country borders on any maps provided to get a better understanding of where product is sourced from. The questions that must be answered are: What are the optimal flows from plants to distribution centers to customers for the current supply chain, as well as the total costs? LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2 3

8 Part 1: Identifying the Problem If DC_Brazil is not used, which sites are then sourced by DC_USA, and which are sourced by other locations? What is the transportation cost difference if DC_Brazil is not used? What is the overall cost difference if DC_Brazil is not used? Go to Part 2... Part 1 Part 2 Part 3 Part 4 Part 5 4 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

9 Part 2: Starting With a New Project and Model Part 1: Identifying the Problem Part 2: Starting with a New Project and Model (here) Part 3: Using Policies to Control Data Part 4: Adding Costs and Working With Scenarios Part 5: Optimizing and Analyzing the Model The Tutorial Scenario Creating a New Model and Project Organizing Data with Groups Adding Transportation Costs with Input Pipes Ready for Optimization The Project Navigator Adding Policies with Visual Modeler Expanding the Model So, What is Optimal? Building Our First Model Viewing Our Sites Checking Our Policies on the Map Adding a Scenario Graphs and Answers Final Analysis Creating a New Model and Project Starting Supply Chain Guru 1. Find the Supply Chain Guru icon on your desktop, as shown in the following image, or the Supply Chain Guru folder in Start Menu > Programs. LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2 5

10 Part 2: Starting With a New Project and Model 2. Double click the icon or select the program to open Supply Chain Guru. The following window is displayed: 6 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

11 Part 2: Starting With a New Project and Model 3. Click on the toolbar at the top of the window to see the main window: When you open Supply Chain Guru for the first time, no model is available for selection. You must first add a new model to the project, save the model, and then save the project. Adding a new model 1. In the Home tab, find the Add New Model button in Project Operations. 2. Click the button to add a new model. LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2 7

12 Part 2: Starting With a New Project and Model 3. When you are prompted to choose a database format, select Microsoft Access, and click OK. You see the Save New Model As window. 4. Save the model as TutorialModel.sgm in your Tutorial Folder. You should notice that the model name in the upper left corner is now TutorialModel, and the Save Model status window will confirm that the model was saved as TutorialModel. Saving a project 1. In Home > Project Operations, find Save Project, then click the top of the button. A dialog prompts you select the models to save along with the project. 2. Check the TutorialModel box, and then click Save. 3. Using the Save Location dialog, save the model as TutorialProject.sgpx in the Tutorial Folder. A status window confirms that the model and the project have been saved. Note that the name of the project in the window title has changed to TutorialProject. 8 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

13 Part 2: Starting With a New Project and Model You now have a new project and model to begin optimizing a supply chain network. The Project Navigator In Home > Project Operations, click Project Navigator to open the Project Navigator if it is not already open. The Project Navigator is the primary way to view data tables and models within a Supply Chain Guru project. If you cannot see any tables under Standard Tables, toggle the Hide Empty Tables button just above the TutorialModel. You should see a set of data tables that can be filled to provide model data. LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2 9

14 Part 2: Starting With a New Project and Model If it appears as though tables are missing, toggle this button to see all possible tables, or to clean up the table list and remove unused tables from view. Building Our First Model We now begin building our first model using the data provided. Before we import the data, do the following: 1. Minimize the software. 2. Open up the Tutorial folder in Windows. If you are using Windows 7 or Windows Vista, this folder is C:\Users\ <Username>\LLamasoft\Tutorial. If you are using Windows XP, this folder is C:\Documents and Settings\ <Username>\My Documents\LLamasoft\Tutorial. 3. Open the MasterData.xls file in Microsoft Excel. The data resembles what your company would provide for any modeling assignment. Three tabs are included: Products Sites Demand 10 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

15 Part 2: Starting With a New Project and Model The Products table contains three products, each with different weights and sizes. The Sites table consists of 55 locations, which include: Manufacturers (MFG) Distribution Centers (DC) Customer Zones (CZ) LLamasoft Supply Chain Guru Network Optimization Tutorial

16 Part 2: Starting With a New Project and Model The Demand table contains 18,437 records for individual product demand in locations at specific times. We would not want to input this data by hand. Supply Chain Guru includes tools to automatically import the data into a model so we can begin working with it immediately. Adding Data through Excel Import 1. Close the Excel file, and display Supply Chain Guru again. 2. In Tools > Main, click Excel Import. 3. On the Import From Excel dialog, click Add LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

17 Part 2: Starting With a New Project and Model 4. Navigate to the Tutorial folder, select the MasterData.xls file, and click Open. The filename is displayed in the Import From Excel dialog box. 5. Click Next to continue the import process. The spreadsheet data begins to load, and it may take a minute to read in all data. When loaded, the data is listed in the dialog. Note that the 3 products, 55 sites, and 18,437 demand records are seen by Supply Chain Guru and ready for import. 6. Click Next to continue. 7. Select Replace from the drop-down box to replace the products, sites, and demand data already in the model (which is blank) with the data in the Excel spreadsheet, and click Finish. The data can take a few minutes to load into the model, depending on the speed of the machine. Once the data has been imported, a pop up window confirms that the import LLamasoft Supply Chain Guru Network Optimization Tutorial

18 Part 2: Starting With a New Project and Model completed successfully. Note the Standard Tables list in the Project Navigator: the site, product, and demand records are now in the model. Feel free to open the tables to confirm that the data has been imported successfully. Viewing Our Sites For transportation distances and geographic locations to be understood by the software, the sites must be geocoded with latitude and longitude values. This can be done automatically within Supply Chain Guru. GeoCode the sites 1. Go to Tools > Calculate, then click the arrow on the GeoCoding Guru icon. 14 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

19 Part 2: Starting With a New Project and Model The GeoCoding Guru opens. This tool allows you to quickly generate the latitude and longitude values for a list of locations. 2. Click on the Batch GeoCode tab. 3. Select Geocode only those sites without latitude/longitude values, and make sure Save Best Fit Result is also selected. 4. Select Save Latitude and Longitude Only from the drop-down menu. 5. Click on the Providers tab along the right edge of the window, and select Guru Data as the GeoCoding Provider. Note that providers such as MapPoint North America and/or MapPoint Europe will also be included in the listed in the Providers pane if installed on your computer. 6. Your selections should look like this - LLamasoft Supply Chain Guru Network Optimization Tutorial

20 Part 2: Starting With a New Project and Model 7. Click Start to begin geocoding. When the GeoCoding Guru is finished, a popup message confirms that all 55 sites have been geocoded. 8. Click OK to continue. Note: Occasionally, slight interruptions in Internet connectivity can prevent the geocoding provider from successfully geocoding all sites. Should this occur, you can repeat the previous steps to add the sites that were skipped. 16 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

21 Part 2: Starting With a New Project and Model 9. To confirm that the sites have been geocoded successfully directly from within the GeoCoding Guru screen, use the zoom tools to focus your view of the map so that it fills the screen more completely, and click the Show Sites icon. 10. Close the GeoCoding Guru window. See the sites on the Geo Map While the map in the GeoCoding Guru is an excellent tool for geocoding and finding locations on a map, the Geo Map allows you to add related information to better represent the characteristics of your transportation network. 1. Go to Tools > Main, then click Map to open the map, and use the zoom tools and the scrollbars to adjust your view of the map like this - LLamasoft Supply Chain Guru Network Optimization Tutorial

22 Part 2: Starting With a New Project and Model 2. Note that, by default, the sites are already displayed on the map. These are the site locations we identified in our data through the GeoCoding Guru. You can click the Toggle Site Layer Visibility button in the upper left corner of the map window to turn the display of sites on and off. The button is a small square with a facility icon. Improving the Map In Supply Chain Guru, you can add additional custom layers to the map to customize data output. For example, to add country borders to the map: 1. Click the Layer Navigator tab on the left, and pin it to the side using the small pin icon in the upper right hand corner of the tab. 18 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

23 Part 2: Starting With a New Project and Model 2. At the top of the Layer Navigator, click Add Layer..., and select Add Shape Layer. 3. Enable Use Predefined Layer Type, and select Countries. 4. Change the settings as indicated - Color is Black. Size is Default (the thin line at the top of the drop-down). Fill Style is Solid. Fill Color as White. LLamasoft Supply Chain Guru Network Optimization Tutorial

24 Part 2: Starting With a New Project and Model 5. Check the box next to Shape1, and note the countries drawn on the map. To rename a layer, you can right click the layer and select Rename Layer. At this point, save your project again by selecting Home > Project Operations >Save Project. Go to Part 3... Part 1 Part 2 Part 3 Part 4 Part 5 20 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

25 Part 3: Using Policies to Control Data Part 1: Identifying the Problem Part 2: Starting With a New Project and Model Part 3: Using Policies to Control Data (here) Part 4: Adding Costs and Working With Scenarios Part 5: Optimizing and Analyzing the Model The Tutorial Scenario Creating a New Model and Project Organizing Data with Groups Adding Transportation Costs with Input Pipes Ready for Optimization The Project Navigator Adding Policies with Visual Modeler Expanding the Model So, What is Optimal? Building Our First Model Viewing Our Sites Checking Our Policies on the Map Adding a Scenario Graphs and Answers Final Analysis Organizing Data with Groups We often refer to our sites and products in groups. For example, all manufacturing plants ship to all distribution centers, and all distribution centers can potentially ship to all customer sites. We can create groups to speed up policy creation. Create Site Groups 1. Close the map if it is still open. 2. Open the Sites table using one of the following methods: In the Project Navigator, double click on Sites in Standard Tables. LLamasoft Supply Chain Guru Network Optimization Tutorial

26 Part 3: Using Policies to Control Data On the Model Data tab, click the Sites button in the Master Data section. The row above the site data consists of a set of empty cells. You can filter any data table using these cells. 3. Create a group for all manufacturing plants. a. Type MFG in the cell below Name, then press Enter to filter for MFG sites (manufacturing site names include MFG as a prefix). b. Press Ctrl+A to select all rows that are visible in the Sites table (which should only be the MFG_Japan site), and click the Create a group from the selected rows button, which is just to left of the saved filter list. 22 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

27 Part 3: Using Policies to Control Data c. Enter the Group Name as MFGs, and click OK. A pop-up window confirms that the group has been created. d. Click OK. 4. Now, create a group for all distribution centers. a. Clear out the filter from the Name column, and type DC in the cell below the Name column heading and press Enter to filter for only DC sites (distribution center site names include DC as a prefix). b. Press Ctrl+A to select all the rows, then click the button for creating a group (as in the previous step), and save the group as DCs. c. Click OK when the confirmation window displays. 5. Next, create a group of only customers. a. Clear out the filter for the Name field. b. In the filter for the Type field, select Customer from the drop-down list and press Enter, and note the filtered list of 50 customers. c. Press Ctrl+A to select all of the customers, and create a group with the name CZs. d. Select the (Unfiltered) option from the filter drop-down to clear the filter criteria. LLamasoft Supply Chain Guru Network Optimization Tutorial

28 Part 3: Using Policies to Control Data Create a Product Group In our model, we also send all of our products together, so grouping them is a logical step. 1. Close the Sites table, and open the Products table. 2. Select all products using Ctrl+A, and create a group with the name AllProducts. 3. Close the Products table. Look at existing Groups All groups can be seen in the Groups table. Use one of the following methods to access this table: Select it from Standard Tables in Project Navigator. Select the Model Data tab, then click the Groups button in the Master Data section. There should be a total of four groups. You can close the Groups table. Adding Policies with Visual Modeler Now that our model has the sites, products, demand, and now groups, we must construct policies to define how product moves through our network. 1. First, we open the Visual Modeler and make a few adjustments to facilitate our task. 24 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

29 Part 3: Using Policies to Control Data a. Select Tools > Main > Visual Modeler. The visual modeler opens, but not all sites are visible in the layout. b. To work with the site groups we just created, click the Layers tab on the right, and pin it down using the small pin icon in the upper right hand corner of the window. c. Click the Add Layer... button, then select Site Group Layer to create a new layer. LLamasoft Supply Chain Guru Network Optimization Tutorial

30 Part 3: Using Policies to Control Data d. Uncheck the box next to the Sites1 layer to remove the full list of sites from the view. e. Finally, rearrange the groups in a logical order, from Customer to Distribution Center to Manufacturing Plant, by clicking on a group and moving it. The cursor changes to a four-arrow cross-hair when moving items. When the groups have been rearranged, unpin the layers tab from the right by clicking the small pin icon in the upper right corner of the tab. 2. Next, we create new Transportation and Sourcing policies. 26 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

31 Part 3: Using Policies to Control Data a. Click the Create New Policies tab on the left side, and pin it down using the small pin icon in the upper right hand corner of the tab. b. Make sure (Group) AllProducts is selected in the list of products on the left, and click the button on the top of the tab for creating a new Sourcing Policy and a new Transportation Policy between the sites. LLamasoft Supply Chain Guru Network Optimization Tutorial

32 Part 3: Using Policies to Control Data c. Click the destination of the products - in this case, (Group) CZs. Then, click the source of the products - in this case, (Group) DCs. The blue arrow represents the Sourcing Policy, and the red arrow represents the Transportation Policy. d. Repeat this process between the destination of (Group) DCs and the source of (Group) MFGs. As mentioned previously, the blue arrows represent Sourcing Policies, and the red arrows represent Transportation Policies. However, this is not enough. Product must be manufactured at the MFG sites. 28 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

33 Part 3: Using Policies to Control Data 3. Next, add a Make policy. a. Click the button with the factory icon in the Create New Policies tab. b. Select the (Group) MFGs square. LLamasoft Supply Chain Guru Network Optimization Tutorial

34 Part 3: Using Policies to Control Data 4. Note how new Sourcing Policies, Transportation Policies, and Inventory Policies are visible in the Project Navigator. Checking Our Policies on the Map Now that the policies have been set up, close the Visual Modeler and open the Map. 1. Select Tools > Main > Map. 2. Click the Toggle Link Layer Visibility button, which is just to the right of the Toggle Site Layer Visibility button in the upper left corner of the map. 3. Note the potential paths that were just created using the Visual Modeler with only a couple of clicks. 30 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

35 Part 3: Using Policies to Control Data 4. We want to show the lines in a different color. To adjust the color: a. Pin down the Layer Navigator tab on the left. b. Click the Link1 layer, and select Use Custom Presentation in the Layer Properties area. c. Select Orange as the new color. LLamasoft Supply Chain Guru Network Optimization Tutorial

36 Part 3: Using Policies to Control Data Go to Part 4... Part 1 Part 2 Part 3 Part 4 Part 5 32 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

37 Part 4: Adding Costs and Working With Scenarios Part 1: Identifying the Problem Part 2: Starting With a New Project and Model Part 3: Using Policies to Control Data Part 4: Adding Costs and Working With Scenarios (here) Part 5: Optimizing and Analyzing the Model The Tutorial Scenario Creating a New Model and Project Organizing Data with Groups Adding Transportation Costs with Input Pipes Ready for Optimization The Project Navigator Adding Policies with Visual Modeler Expanding the Model So, What is Optimal? Building Our First Model Viewing Our Sites Checking Our Policies on the Map Adding a Scenario Graphs and Answers Final Analysis Adding Transportation Costs with Input Pipes Now that the network structure has been defined, the costs must be added. LLamasoft Supply Chain Guru Network Optimization Tutorial

38 Part 4: Adding Costs and Working With Scenarios 1. Open the TransportationRateTable.xls file in the Tutorial folder, and look at the RateTable inside. A specified per unit transportation cost (also known as quantity cost) is defined from each distribution center to each customer, and from the manufacturing plant to each distribution center. Instead of entering all these costs by hand, we can use Supply Chain Guru's Input Pipes feature to plug the data in automatically. 2. Close the TransportationRateTable.xls file. 34 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

39 Part 4: Adding Costs and Working With Scenarios 3. In Supply Chain Guru, select Model Data > Master Data > Input Pipes. The Input Pipes window is displayed. Before we create an Input Pipe, we must first specify a data source from which to pull the data. 4. In the Input Pipes window, click the Data Sources button to display the Data Sources dialog. LLamasoft Supply Chain Guru Network Optimization Tutorial

40 Part 4: Adding Costs and Working With Scenarios 5. Click the New button in the Data Sources window to open the External Data Source Wizard. 6. Because TransportationRateTable.xls is an Excel file, select Excel file from the list. 7. Click Next Step to continue. 8. Click the Browse button next to the Data Source Path field, and select the TransportationRateTable.xls file in the Tutorial folder. The sheet list is automatically populated; make sure RateTable is the sheet selected. 9. Click Next Step to continue. 36 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

41 Part 4: Adding Costs and Working With Scenarios 10. Keep the Data Source Name specified as TransportationRateTable, and click Test Data Source. 11. Confirm that 212 rows were loaded. 12. Click Finish. Note that the Data Source is now in the Data Sources Dialog. 13. Close the Data Sources dialog to return to the Input Pipes window. LLamasoft Supply Chain Guru Network Optimization Tutorial

42 Part 4: Adding Costs and Working With Scenarios 14. To make a new Input Pipe, click the New button in the upper left corner of the window, and then select Standard Lookup. 15. When the Input Pipe Wizard opens, select the TransportationRateTable data source, and click Next Step. 16. Select Transportation Policies as the Table and Average Cost as the Field, then click Next Step. 38 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

43 Part 4: Adding Costs and Working With Scenarios 17. Select the Cost field to place data in, and set the default value to If the input pipe does not have a value for a record, this high value is used as input. Since the value is high, Supply Chain Guru most likely will not use this policy. You can search for this high value and correct the cost as required. 18. Click Next Step. 19. Next, assign the columns in which the input pipe looks up its data. The Source field is the field within the Excel file, and the Destination field is the field within Supply Chain Guru. For the first relationship, set Source Field as Source, and set Target Field as Source Site). For the second relationship, set Source Field as Dest and Target Field as Destination Site). 20. Click Next Step. 21. Keep the Pipe Name as TransportationRateTable and make sure that it is not set as the default value for the field, then click Finish. The new input pipe is now in the Input Pipes window. LLamasoft Supply Chain Guru Network Optimization Tutorial

44 Part 4: Adding Costs and Working With Scenarios 22. Close the Input Pipes window, and then open the Transportation Policies table. Scroll over to the Average Cost field, and click in the cell for the first row to activate it. 40 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

45 Part 4: Adding Costs and Working With Scenarios 23. Click the small grey button in the cell to open the Field Guru for the Average Cost, and select TransportationRateTable from the Input Pipes drop-down list in the Field Guru. 24. Click Paste in the upper right corner to add the value to the field. 25. Repeat the previous step for the second row in the Transportation Policies table. Also, confirm that the Cost Basis is set to Qty (quantity) for both rows. LLamasoft Supply Chain Guru Network Optimization Tutorial

46 Part 4: Adding Costs and Working With Scenarios Expanding the Model At this point, we are ready to confirm that the input pipe actually works by expanding the model. 1. Close the Transportation Policies table. 2. Select Home > Model Operations > Expand Model. The model expands, and a confirmation log window displays. 3. Click OK to continue. Note that another model has been added to the Project Navigator called TutorialModel (Expanded). 42 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

47 Part 4: Adding Costs and Working With Scenarios 4. Select the expanded model and note the number of Sourcing, Inventory, and Transportation policies. LLamasoft Supply Chain Guru Network Optimization Tutorial

48 Part 4: Adding Costs and Working With Scenarios 5. Open the Transportation Policies table, and note that the Average Cost has been filled in where appropriate. 6. Close the Transportation Policies table. Adding a Scenario Now that the structure and costs have been added, we will create a scenario without the distribution center in Brazil. To do this, we must exclude the DC_Brazil site from the Sites table in the scenario. 44 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

49 Part 4: Adding Costs and Working With Scenarios 1. Select Optimization > Run Model > Scenarios to open the Scenarios dialog. 2. Click New in the upper left corner in the Scenario section, and add No Brazil as the scenario name. 3. Click Save to continue. Note that No Brazil has been added to the list of scenarios. LLamasoft Supply Chain Guru Network Optimization Tutorial

50 Part 4: Adding Costs and Working With Scenarios 4. In the Scenarios dialog, click New in the Item Options section to open the Scenario Item window. Note: If the New icon is not enabled, close and reopen the Scenarios dialog. 5. Indicate the following: a. In Step 1 Item Name, enter a name for the scenario item, such as ExcludeBrazil. b. In Step 2 Select Table, select Sites. 46 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

51 Part 4: Adding Costs and Working With Scenarios c. In Step 3 Select Filter, click Create Filter. When the Sites table displays, type DC_Brazil in the filter field just below the Name column heading and press Enter. Click the Save & Apply to Scenario button. d. When prompted to save the filter, enter DC_Brazil and click Save. LLamasoft Supply Chain Guru Network Optimization Tutorial

52 Part 4: Adding Costs and Working With Scenarios The completed filter definition is then displayed. e. Step 4 determines what field to change and how the field varies. Select Status as the Field. Ensure the Operator is set to =, and select Exclude from the Value drop-down. 48 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

53 Part 4: Adding Costs and Working With Scenarios f. Click Save & Close, and note that the Scenario list has been updated. Click the arrow next to the Scenario name. This expands the display to show the scenario item description. Go to Part 5... Part 1 Part 2 Part 3 Part 4 Part 5 LLamasoft Supply Chain Guru Network Optimization Tutorial

54 Part 4: Adding Costs and Working With Scenarios 50 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

55 Part 5: Optimizing and Analyzing the Model Part 1: Identifying the Problem Part 2: Starting With a New Project and Model Part 3: Using Policies to Control Data Part 4: Adding Costs and Working With Scenarios Part 5: Optimizing and Analyzing the Model (here) The Tutorial Scenario Creating a New Model and Project Organizing Data with Groups Adding Transportation Costs with Input Pipes Ready for Optimization The Project Navigator Adding Policies with Visual Modeler Expanding the Model So, What is Optimal? Building Our First Model Viewing Our Sites Checking Our Policies on the Map Adding a Scenario Graphs and Answers Final Analysis Ready for Optimization Now that the scenarios have been added, we are ready to begin optimizing the model. LLamasoft Supply Chain Guru Network Optimization Tutorial

56 Part 5: Optimizing and Analyzing the Model 1. Close the Scenarios window, then open the Optimization tab and click the big blue arrow button in the Run Model section. 2. Select Network Optimization, and ensure that both the Baseline scenario and the No Brazil scenarios are checked under TutorialModel (Expanded). 3. Click the blue arrow at the bottom of the window. When the Solver Monitor window opens, click on the Optimization Status tab. 52 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

57 Part 5: Optimizing and Analyzing the Model Once the Demand has been processed, the optimization begins. Note that the optimization occurs twice for the two scenarios we created. LLamasoft Supply Chain Guru Network Optimization Tutorial

58 Part 5: Optimizing and Analyzing the Model 4. Close the Solver Monitor window, and click the Optimization Output tab in the Project Navigator to confirm that the optimization completed. So, What is Optimal? Now that the optimal paths have been generated: 1. Save the project. 54 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

59 Part 5: Optimizing and Analyzing the Model 2. Open up the map (Tools > Main > Map), and pin the Layer Navigator to the left side of the window. Uncheck the Link1 layer, and check the OptimizationFlow1 layer. Note the paths taken by products, using all four DCs provided. But how can we visualize the alternate scenario? 3. In the filters section, click the Scenario tab, and select the No Brazil scenario. Feel free to experiment with the map and the filters to see the paths taken, then close the map. LLamasoft Supply Chain Guru Network Optimization Tutorial

60 Part 5: Optimizing and Analyzing the Model 4. Open the Visual Modeler in Tools > Main, then open and pin the Layers sidebar on the right side of the window. 5. Hide Site Groups1 Layer, Sourcing Policies1 Layer, and Transportation Policies Layer, then show Sites1 Layer again. 6. Add a new Optimization Flow Layer. 56 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

61 Part 5: Optimizing and Analyzing the Model 7. This graphical arrangement can be difficult to start, so move the MFG_Japan site over to the right, and move DC_Brazil a little to the left. 8. Right-click the DC_Brazil site, and select Hub and Spoke-Customers on hub. LLamasoft Supply Chain Guru Network Optimization Tutorial

62 Part 5: Optimizing and Analyzing the Model Note that the sites source from DC_Brazil separated themselves. Feel free to zoom out for an alternate look. 9. This isn't very helpful with the other customers in the way, so right-click again and choose Select Sites > Customers linked to this site, then click on the Arrange Vertical icon. 10. Note that the sites line up nicely on the left. Do this for the rest of the DCs. Feel free to arrange them as you would like, and zoom out to see more of the Visual Modeler. 58 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

63 Part 5: Optimizing and Analyzing the Model 11. In the Layers pane, select the Optimization Flows1 layer. Note that for Standard Filters, the Scenario drop-down is set to Baseline. Change this to No Brazil to see how the model structure changes. As can be seen, CZ_South Africa is now sourced by DC_Germany, and the other formerly DC_Brazil sites are now sourced by DC_USA. This information answers one of our questions. LLamasoft Supply Chain Guru Network Optimization Tutorial

64 Part 5: Optimizing and Analyzing the Model 12. Additionally, experiment with the Standard Filters to only show facility flows, or flows for only Product_2. Note that no Product_2 goes through DC_USA! Graphs and Answers How do we answer our cost questions in a way that management would most easily understand? Using the built-in graphs provided within Supply Chain Guru, we can get quick answers for transportation and overall costs. 1. Close the Visual Modeler, and then save the project. 2. Select Optimization > Graphs and Reports > Main, and then select Network > Costs. 60 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

65 Part 5: Optimizing and Analyzing the Model The Network Optimization Network Cost Stacked Bar Graph is displayed. 3. To add the No Brazil scenario for comparison, pin the Graph Fields sidebar on the left, and check No Brazil under Baseline. It appears as though the overall cost for the network has gone up by about $2M when DC_Brazil is not used. While this graph works, we should make it easier to understand. LLamasoft Supply Chain Guru Network Optimization Tutorial

66 Part 5: Optimizing and Analyzing the Model 4. Click the Data Grid button above the graph to see the data grid. It appears as though there is an overall transportation cost increase of roughly $2.8M, but lower fixed costs of $900,000 when DC_Brazil is not used. Final Analysis In this tutorial, we created our sites, products, and demand in the model automatically from an Excel file. We then added transportation, sourcing, inventory, and make policies with the Visual Modeler. We also added transportation costs using Input Pipes, optimized the model using the built-in optimization engine, viewed the results with the Map and the Visual Modeler, and graphed some relevant output to present to management. No longer using DC_Brazil would mean an additional $1.9M in overall costs to the system. Part 1 Part 2 Part 3 Part 4 Part 5 62 LLamasoft Supply Chain Guru Network Optimization Tutorial 8.2

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