What does Dynamic Flow Control (DFC) do?
- DFC is an automated shipment planning engine configured to constant integral optimization of the way to move all customer shipments available at any origin through an existing network of nodes and carriers.
- DFC achieves dynamic optimization through automatically re-planning all shipments whenever changes occur in shipping orders, rates, sailings, capacities or available equipment.
- DFC runs in three consecutive steps:
- Determine the best available mode, route and carrier for each shipment ready to depart from any origin, within the constraints of the customer’s business rules and operational restrictions.
- Allocate shipments to the optimal number and configuration of available container equipment.
- Trigger execution by booking shipments with carriers, instructing origins how to load and pre-advising destinations.
What does Dynamic Flow Control NOT do?
- DFC does not provide the periodical tactical and strategic network and routing analysis required to ensure an optimal set-up to serve structural changes in the supply and demand bases. DFC optimizes operational execution within the set customer’s supply chain network structure.
- DFC is not an SKU order and inventory management tool forecasting and positioning inventory across the supply chain. DFC facilitates the availability of inventory through taking on time delivery at the shipment destinations as prerequisite criteria for any shipment plan.
- DFC does not provide vendor management by actively chasing cargo readiness. DFC plans based on cargo coming available from vendors either at a consolidation hub or the individual vendor sites.
- DFC does not define the best available stuffing pattern for each individual container. DFC allocates shipments to containers ensuring maximum compliance with pre-set fill rate criteria.
When does Dynamic Flow Control typically add value?
- Daily large number of shipments.
- Agile pull-based strategy is preferred over push-based longer term planned supply chain.
- Need to accommodate frequent changes in shipping order characteristics or requirements.
- Multiple mode, route and carrier options available from the same origin.
- Frequent changes happening in rates, sailings, capacities or available equipment.
- Many vendors from the same geographical region frequently shipping relatively small sized shipments to the same or similar destinations.
- Multiple vendors shipping the same SKU’s from different geographical regions.
- Large and increasing number of delivery locations.
- Multiple routing options available to reach destinations (e.g. via a distribution centre, via a cross-dock, direct-to-store, or direct-to-consumer).
What value does Dynamic Flow Control typically deliver to customers?
- Improved S&OP performance through facilitation of agile pull-based planning compared to long term push based planning.
- Ability to accommodate business growth in volumes and complexity without the need to add head-count, processes or tools.
- Reduced working capital employed through decreased inventory levels resulting from:
- Reduced destination safety stock due to higher On-Time-In-Full delivery performance;
- Reduced destination rotating stock due to smaller average shipment size;
- Use of DC by-pass potential when desirable.
- Reduced storage costs due to lower downstream inventories and use of upstream free demurrage options when desirable.
- Reduced transportation costs resulting from:
- Selection of optimal mode, carrier, equipment and routing for each shipment rather than each purchase order;
- Combining LTL shipments when desirable;
- Reduced air to ocean ratio if in scope.
- Enhanced administrative efficiency due to reduced need for manual shipment planning, and easier implementation new rates, carriers or business rules.
- Increased average sales margin per unit due to reduced penalties for deliveries outside agreed upon windows and reduced price mark downs resulting from late arrivals in store.
Which practical benefits does Dynamic Flow Control typically bring?
- One standardized global shipping planning and execution process independent of geographical location, vendors or customers.
- Changes in rates or carrier allocations and contracts are directly applied and not depending on manual implementation.
- Facilitation of category management per region, season, product, brand, geography …..
- Easy accommodation of changes in business rules. No need to change shipping instructions to vendors or origin operations.
- Easy expansion of scope to include additional business units, brands, geographies, …..
- More accurate and faster decision making on individual shipments rather than at entire PO level.
- Facilitation of late changes in shipment characteristics and requirements when required, and speed up or slow down shipments when required, expedite as necessary.
- Easy carrier forecasting by comparing historically shipped volumes to agreed contractual allocations.
What are examples of best practices that Dynamic Flow Control customers experience?
- A well-known global sportswear brand enjoys, amongst other things:
- End-to-end pull-chain, inclusive direct to store
- Flexible speed to market due to accommodating different transport modes and routings, and actively making use of upstream options to delay or speed up orders when needed
- Reduced origin processing time
- Increased planning speed, accuracy and frequency when and where needed
- A well respected European retailer enjoys, amongst other things:
- Structured, streamlined decision making and exception management at origin
- Facilitation of differentiating local needs and requirements for origin loading
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