New Supply Chain Tool from Freight and Logistics Supplier Saves Millions

WORLDWIDE – Never ones to do things by halves Damco, the logistics subsidiary of the AP Moller Maersk empire has had its global team of 50 supply chain developers working on more than 200 projects so far during 2012 and claims to have identified more than $160 million in savings to its customers. The freight forwarding company is using a new network optimization tool which it says enhances its end-to-end supply chain management platform to provide the utmost in cost savings to clients whilst simultaneously decreasing carbon emissions and enhancing overall supply chain design.

Earlier this year Damco launched the revolutionary ‘Damco Dynamic Flow Control’ ™, which tackles the hassle of dealing with constant changes on the demand and supply side without adding cost, time, and complexity. The new optimisation tool is the strategy part of Damco Dynamic Flow Control™. The company works assuming that a prerequisite for supply chain excellence is the ability to evaluate performance, simulate different options very quickly while understanding implications to cost, service levels, lead time and capacity and translate findings into specific actions on a day to day level.

Damco has signed a contract with Llamasoft, a world class provider of Network Design and Optimization software, which adds “Supply Chain Guru” to Damco’s array of tools. Damco highlights five priorities which it strives to identify so as to arrange the optimum level of service using the array of technology now available to its operators. These include:

How much inventory is needed to meet desired service levels? Where should inventory be kept - point of origin, in transit or at destination? How much warehousing is required? When to phase in and out warehouse capacity for the future? Which modal services are needed from a cost, service and carbon perspective for the in- as well as the outbound supply chain? Erling Johns Nielsen, Global Head of Supply Chain Development at Damco, comments:

“A more quick, thorough and holistic approach to supply chain design and optimization is key to operate in a world of constant change. You can have the best supply chain concept in the world. However, without being able to adapt to change while having access to experienced supply chain professionals located close to your supplier and customer base who can implement and execute the change on a daily basis, you will not reap the full benefits.

“These change projects used to take several months, new tools combined with Damco Dynamic Flow Control™ ensures that it takes much less time to simulate the impact of the change, design new business rules and subsequently roll out the solution across all stakeholders involved in the supply chain. This is really a missing link in many supply chains.”