Supply Chain simulation: an investment, but for what return on investment?

Before imagining embarking on any improvement or transformation project, a natural and human reflex is to ask the famous questions:

How much it cost? What is the cost or investment of a simulation project?

A simulation project takes time from your teams and has a cost for your business.

You have to define how it will be profitable for you, in other words:

What will be your return on investment?

Each simulation subject is different, and the AGILEA teams create a tailor-made digital twin to your problem.

With the experience in similar cases carried out, we could provide you a return on investment ratio.

But how to define the ROI of a project without having started, without precisely knowing your environment and the levers for improvement that you would be able to activate?

We are confident of this type of approach’s benefits!

And for all the projects carried out, the investment has paid off or even been a profit.

In projects carried out by AGILEA, the project’s cost can be made profitable on elements not initially foreseen.

For one of our customers, in the aeronautic industry, who wanted to control its working capital in the years to come, we simulated its financial flows and defined the levers for improvement.

This customer was also wondering about the opportunity to purchase a new machine.

Thanks to the digital twin created; a few simulations were able to demonstrate the irrelevance of this purchase.

In another project, for a customer working in defense, we had to define the new military building in which to invest because they suffered from demand with strong growth.

We concluded that this investment was unnecessary if several improvements were made in the current building (and therefore with several million euros in savings).

Based on our experience, we have listed the main interests and return on a simulation project’s investment.

What are the main financial interests of a supply chain simulation project

Below are three examples of the value of simulation for the company’s profitability, and therefore of the flow simulation project.

  1. Aerospace project

We created a profitable digital twin for the customer to analyze if the supply was appropriately sized.

For a single reference of an aircraft (which contains several thousand) for an aeronautical ordering party, it does not block the line and does not generate penalties for delays (we are talking about hundreds of thousands of euros).

  1. Pharmaceutics project

The project to define a pharmaceutical group’s distribution center was profitable if it allowed projecting far enough not to consider closing a site that would have to reopen in 2 years!

This exercise is more difficult in the context of the current crisis.

  1. Retail and Distribution Project

The projection of the logic of pooling orders for transport to its end customers made it possible to assess quickly and with small investment gains of approximately two hundred times the cost of the study. (without count the substantial impact on the reduction of the carbon impact).

Thanks to the projects carried out, the business expertise of AGILEA, and the knowledge of solution providers, we can also tell you if it makes sense to contact people we recommend and whose benefits we know!

If this article questions you, do not hesitate to contact us!