Step four: Identify options
This step seems simple, the traditional view is that in the "Investment and non-investment" to choose between, this is not correct. Here, you have to through collective discussion, a list of programs currently possible to achieve (their costs and benefits of varying degrees of difference), until you find the best solution.
For example: whether the establishment of a new automated warehouse for decision-making, we can consider the following scenario: Conversion of existing warehouse, construction of a new automated warehouse, the establishment of a semi-automated warehouse, with third-party logistics co-operation to manage inventory.
Step five: The estimated cash flow of each option
This is a very important step. For each program detailed plan for the near future the company's cash flows related records. This work needs to operational and financial point of view, covering all possible companies to benefit from the project the relevant departments. The only way to ultimately form a complete data, in order to smooth the process of evaluation and analysis provide a powerful guarantee.
Step Six: Set inflation factor and the cost of capital
This assumption will affect the calculation of internal rate of return, and may lead to the expected economic return of a certain change in occurred. Therefore, in settings as far as possible with a number of widely accepted indicators.
Step seven: More options
In the cash flow data obtained after the investment payback period, internal rate of return, ROI, etc. The results were compared. If two or more options for the data on the selection of which more certain programs, and then compare with other programs.
For example, the pallet handling technology, comparative analysis, includes forklifts, monorail hanging chain, pallet conveyors, Automated Guided Vehicle (AGV) and so on.
Step eight: Sensitivity analysis
Here, you do not need to be sure the input data appropriate adjustments, through the test, test whether the end result would be one of the two factors are particularly sensitive.
Step nine: Choose the best option
According to the objectives established before the simulated out a best solution to meet all objectives, it is not a rate of return on any investment must be implemented under the conditions of the project? Are there any other investment in the project have access to program better than the return on investment? Answered the above questions, your working group should go to apply for the corresponding right to do this decision-making.
Final Step: Test results
When you are finalized and put into operation, the need in a timely manner and the beginning of the actual results compared to set expectations, and to check several aspects of the problem: the cost reduction or whether the increase in sales revenue to achieve the desired level? The actual cash flow in which there is no point of time is consistent with the estimated value, why is there a difference? This step is often overlooked, but it can help you improve supply chain processes, and accumulation of relevant experience, at the next work to achieve greater success.
Supply chain optimization is a very complex and uncertain work, how to ensure the smooth supply chain optimization? Through the above 10 steps, to avoid supply chain optimization can be effectively pre-existing risks and uncertainties, in order to ensure supply chain optimization projects are successfully implemented.
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