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LogicTools Shows Its Best Side
October 25th, 2002 AMR Reasearch Alert on Supply Chain Management
by Gerald McNerney
If we are to be measured by the company we keep, LogicTools is well positioned. Conducting its annual user conference and symposium in Chicago, a marquee list of customers, including Kraft, General Motors, and the U.S. Postal Service, shared how the LogicTools application is fitting into their broad supply chain strategy.
Take, for example, the case study of the U.S. Postal Service. Having grown consistently for more than 200 years, the quasi-federal organization now manages $5.7B in transportation spend for 210 billion items through 575 distribution facilities each year. But increased competition and a reduction in mail is forcing the Postal Service to redesign, plan, and measure its supply chain network. With LogicTools, it's using three optimization models to identify zip code assignment, processing consolidation, and transportation consolidation. While there are significant barriers to change, the intent is to develop a network through a phased approach that will reduce costs, improve consistency of service, redefine roles and functions, and be able to respond to change.
By coaching customers to think big but model simply, LogicTools has developed a following of admirers. Having proven the ability to scale, the company has expanded from the strategic to the tactical with its LogicChain product. LogicChain supports a user for short-term capacity planning, incorporating seasonality, promotion, and expansion. One High-Tech client, Sanmina-SCI, requires an optimal sourcing policy, especially since 85% of its costs come from the build of materials. By using the tool, Sanmina-SCI may consider how each supplier will affect its supply chain, resulting in slashed inventory levels and improved customer service. As one attendee noted, these tools are like dynamite: powerful, but fraught with risk in the wrong hands. Fortunately, LogicTools has a strong team of internal and external specialists who work with their clients for positive results.
With the proliferation of new products and services, many companies are reassessing their supply chain network design to ensure it has the flexibility to meet sourcing, storage, and delivery demands. LogicTools has demonstrated its value to these companies.
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