Friday, September 04, 2015
Powersim Solutions Consulting - Planning and Training Using Business Simulations123  
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Case Study: Nestlé

Traing & Development, Supply Chain Analysis Simulation for Nestlé
Training and Development- Supply Chain Analysis

"We believe the collaboration between SAP and Powersim to provide business simulation software will enable Nestlé to make more intelligent decisions about allocation of our resources. Simulation of dynamic business scenarios based on real world data in our SAP solution will improve our decision making through the use of alternative business scenarios and likely outcomes."

Bernard Teiling, AVP Business Process Integration
Nestlé SA, Vevey, Switzerland

Supply chain knowledge is becoming more and more critical to ensure competitive supplies of goods and services, especially for large companies dealing with a complex network of suppliers, customers, distributors and consumers. All parties in the chain need to have a particularly good grasp of how their individual activities work together and affect the performance of the whole supply chain. At Nestlé, Key Performance Indicators (KPIs) provide the standard metrics for measuring supply chain performance. Nestlé launched a new initiative to communicate the value and use of KPIs to line managers.
  Nestlé used Powersim technology to develop a simulation model representing the operations of a fictional firm, "OK Company", and incorporated this learning environment within a supply chain workshop at Nestlé's International Training Center in Vevey. The OK Company Simulation puts workshop participants in charge of factories and distribution centers in three different regions. During the course of six simulation years, participants face a number of decisions relating to production capacity, distribution center/factory closures, product range, and cycle times. At the end of each year, users can view a variety of reports showing KPIs (such as inventory turns, stock cover, and service level) and other financial/operational metrics for different products and regions.  
  Currently, about 250 people participate in the OK Company Simulation annually. Nestlé and Powersim engaged in an effort to deploy the OK Company Simulation on the Web allowing the model to reach a wider audience.
In The News

Powersim Solutions is mentioned in the CIO Enterprise article about Supply Chain Management at Nestlé.
Article Excerpt:

Food company giant Nestlé SA feels so strongly about the need for a supply chain perspective that it has devised a short training program for its managers from around the world at its International Training Centre in Vevey, Switzerland.

Executive Vice President and CFO Mario A. Corti expanded his awareness of supply chain strategies while CFO of Nestlé USA in Los Angeles… He has now motivated the company to teach its managers to relate supply chain decisions to the future market valuation of the company.

The program uses a modeling tool from Powersim Solutions (formerly Powersim Corp.) of Herndon, VA., that “captures some simple ideas about how goods are flowing from supplier to manufacturer to distributor to consumer,” says Bernard Teiling, assistant vice president of business process integration at Nestlé headquarters.

Over a day-and-a-half, managers simulate the next six years of supply chain management and the consequences for the company as a whole. Typical options include optimizing factory performance, increasing the flexibility of production at one or several factories with highly seasonal demand, perhaps closing another, shifting distribution centers or helping a retailer manage inventory. The complexity builds progressively.

The 2-year-old training project is now expanding into some country units of Nestlé, bringing together managers of product divisions and national markets. “In the consumer packaged-goods-industry,” Teiling says, “you succeed only if the entire supply chain functions properly.” Hence the need for managers from different departments to work together. “In the same way that an instrument panel has many variables, a supply chain is a combination of responsibilities that come together, so we have at least three people share the scenario…one may be from manufacturing another from distribution, another from sales and marketing; they need to come together to understand how they jointly create value.”

CIO Supply Chain Management Article PDF (1.7MB)

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