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Supply chain design and optimization
15 May

Supply Chain Network Design & Optimization: Steps, Guide, and Efforts

Supply chain design and optimization projects present significant challenges, ranging from complex network structures, and multiple databases to diverse business objectives. Drawing from hands-on experience gained at leading organizations, I’ve compiled a comprehensive document to assist professionals in this industry.




In today’s fast-paced and competitive business landscape, the optimization of supply chain networks is critical for enhancing operational efficiency. It reduces costs and helps maintain a competitive edge. However, achieving these objectives requires a strategic approach and a deep understanding of dynamics within the supply chain ecosystem. This document serves as a roadmap for professionals involved in supply chain network design and optimization, providing valuable insights and practical guidance at every stage of the process.

Additionally, efforts required during each step are mentioned, providing insights for allocating capacity and resources effectively throughout the project


project management


Brief [5-10%]


Before embarking on a project, it’s crucial to understand the client’s requirements and objectives thoroughly. This initial step enables tailoring the supply chain network design to meet specific needs effectively. By conducting comprehensive stakeholder interviews and thorough requirement-gathering sessions, project teams can gain valuable insights into the client’s business goals, operational challenges, and strategic priorities. Mapping out the existing supply chain network on paper can help gain insight into the client’s needs and demands.


Data Analysis [10-15%]


Once the data is available, begin analyzing it and create a checklist detailing what data is already present and what is required further. A checklist with flags such as “to discuss,” “discussed,” and “clear” can ensure everyone is on the same page. This step is crucial for identifying any gaps or inconsistencies in the data and determining the scope of additional data collection efforts. By systematically reviewing and categorizing the available data, project teams can streamline the data analysis process and ensure that all relevant information is considered during optimization. 


ETL (Extract, Transform, Load) [40-50%]


A significant focus of network optimization lies in obtaining data in the correct format. Understanding the required and existing formats is vital for establishing an efficient data pipeline. The ETL (Extract, Transform, Load) process plays a crucial role in this regard, facilitating the extraction, transformation, and loading of data from disparate sources into a unified format suitable for analysis. Tools like Python and Alteryx are instrumental in this stage, allowing for seamless data integration and transformation.


Supply Chain Modeling [20-25%]


With essential data compiled, it’s time to import it into specialized supply chain software such as Anylogistix, Coupa, Optilogic, or AIMMS. This stage involves creating a digital twin of the supply chain, encompassing all relevant nodes, links, and processes. Incorporating constraints and efficiently handling complex constraints using ETL tools are essential steps in this phase. By developing accurate and comprehensive supply chain models, project teams can simulate various scenarios and assess the potential impact of different strategies on key performance metrics.


Scenarios [5-10%]


Utilizing the digital twin of the supply chain, run various scenarios to gain insights and test project objectives. Simulations are invaluable for assessing different strategies and their potential impacts. By exploring multiple scenarios, project teams can identify optimal solutions. This will help mitigate risks associated with supply chain disruptions or market fluctuations. Additionally, scenario testing allows for evaluating alternative strategies and comparing their respective benefits and drawbacks.


Result Analysis [15-20%]


Analyze scenarios based on agreed-upon Key Performance Indicators (KPIs) to uncover cost-saving opportunities, profit potential, and sustainability objectives. Tools like Power BI and Tableau streamline this analysis process, enabling project teams to visualize data, identify trends, and derive actionable insights. By conducting a comprehensive analysis of scenario outcomes, project teams can refine their strategies, and optimize supply chain processes. They can also maximize operational efficiency.


supply chain network design


Presentation [1-3%]


Communicate research findings to executives through engaging presentations, highlighting key insights and recommendations. Effective communication is essential for gaining stakeholder buy-in and driving organizational change. By presenting research findings in a clear, concise, and compelling manner, project teams can facilitate decision-making. They can also align stakeholders around common objectives.


Deliver [2-5%]


Provide the client with a comprehensive final report and solution tools, ensuring clarity and usability for implementation. The deliverables should include detailed documentation of the project methodology, findings, and recommendations, as well as any accompanying software tools or models. By delivering actionable insights and tangible solutions, project teams can empower clients to implement strategic changes. This will help them achieve their supply chain optimization goals.




In conclusion, successful supply chain network design and optimization require a systematic approach encompassing data analysis, modeling, scenario testing, and result analysis. By following these outlined steps and leveraging appropriate tools, professionals can navigate supply chain challenges effectively. They can drive significant value for their organizations. As supply chains continue to evolve in response to changing market dynamics, ongoing optimization efforts will be essential for maintaining resilience in the global marketplace.


Watch Mastering Supply Chain Resilience: Understanding Economic Volatility and Transformation on SCMDOJO’s YouTube channel!


supply chain network design


About the Author: Ershad Jahagirdar

Supply chain expertErshad is a consultant specializing in supply chain design, optimization, and digital twin technology. With an MBA from the Indian Institute of Management Mumbai and certifications from MIT and the International Supply Chain Education Alliance, he brings extensive expertise to his projects.

Ershad is skilled in using a variety of simulation and data analytics tools. These include Simio, anyLogistix, Anylogic, Optilogic, AIMMS, and OptiDx. He has successfully delivered numerous projects across diverse sectors. These are healthcare, paper, and medical devices, focusing on supply chain network design, optimization, inventory placement, and greenfield analysis.

Moreover, Proficient in Python, Power BI, and Tableau, Ershad develops ETL tools and interactive dashboards to effectively communicate insights from his analysis. Passionate about innovation and problem-solving, he is eager to collaborate and drive transformative change in supply chain management.

Connect with Ershad on LinkedIn to explore innovative solutions for your organization!