Network design functionality can help with supply chain optimization which lets a manufacturer pinpoint where the major suppliers are located, where customers are located, where major transportation lanes are and how products will get to market.
Supply chain network design software emerged in the market about five to seven years ago. More recently, its big-picture functionality has fit in nicely with the green movement.
"A new application that really hit the sweet spot of supply chain network design was green and sustainability," Ferrari said. "How do you map out a carbon footprint? Some of the software providers saw that potential and quickly added functionality." Those additional data elements can let manufacturers see their overall carbon footprint and continually track it.
Network design software is available as a standalone tool, or can dovetail with other types of software, like the newer multi-echelon inventory optimization software. "A nice feeder is the supply chain network design aspect," said Ferrari. Using the tools together can provide insight into "what are the tradeoffs in inventory, where can you save money, and what are your options in postponing decisions" throughout the entire supply chain. Best-of-breed vendors offer network design tools, but the software isn't really a SaaS play yet, he said.
Along with green trends, globalization has also driven supply chain network design adoption. "The interest level in the software started to pick up with the explosion of global outsourcing. Manufacturers needed to get a graphical, visual perspective not only of where the links are in the supply chain, but to analyze supply chain activities" in terms of transportation costs, shipping lane costs and more, according to Ferrari.
Network design software doesn't command a huge part of the supply chain management field, but he noted that it's picking up more and more interest: "It's a niche area, but growing, and the green thing is something that is going to help."
About the author: Christine Cignoli is a Boston-based freelance writer who covers IT infrastructures and storage technology. She is a regular contributor to SearchManufacturingERP. Contact her through her website.
This was first published in December 2009