Using modern demand forecasting and inventory management techniques to optimize the supply chain, using fuel distribution as an example – part 1
Article distinguished in the 4th edition of the “Pen of the Logistician” competition.
Article distinguished in the 4th edition of the “Pen of the Logistician” competition.
1. Introduction
The development of the market economy in Poland, accompanied by an increased flow of goods, services, and information, now poses qualitatively new tasks for logistics, which concern:
- shorter and shorter delivery times with decreasing size and increasing frequency,
- continuous delivery readiness covering all goods,
- absolute punctuality of deliveries (the right product, in the right place, and at the right time),
- the ability to continuously track the status of order fulfillment,
- reduction of warehouse stocks,
- limiting the number of intermediaries in the supply chain,
- lowering logistics costs.
Logistics’ response to the tasks set before it are systems that meet two basic assumptions:
- integrating individual links of the supply chain from the manufacturer to the recipient through the use of modern information and management systems,
- centralizing the distribution of goods, among other things, by creating logistics distribution centers.
Traditional IT systems focus mainly on statistical analyses and forecasts based on the study of specific trends from the past.
Modern concepts based on expert system technologies forecast the market situation based on the most current statistical information.
To meet existing competition, companies need an information structure that will enable them to make logistics decisions in an online system, facilitate advanced planning and forecasting. The purpose of the article is to use modern tools supporting order forecasting and inventory management to optimize logistics decisions in the supply chain, using the example of liquid fuel distribution in a network of regional bases and warehouses.
Modern concepts based on expert system technologies forecast the market situation based on the most current statistical information.
To meet existing competition, companies need an information structure that will enable them to make logistics decisions in an online system, facilitate advanced planning and forecasting. The purpose of the article is to use modern tools supporting order forecasting and inventory management to optimize logistics decisions in the supply chain, using the example of liquid fuel distribution in a network of regional bases and warehouses.
2. Model characteristics
The description of the model will be presented in two stages.
Stage 1. Demand forecasting
In this stage, the essence of modern concepts supporting order planning processes, CPFR (Collaborative Planning, Forecasting & Replenishment), and inventory management by the supplier, VMI (Vendor Managed Inventory), was used.
The use of computer simulation for this purpose and the skillful use of all factors influencing demand is intended to enable planners of supply chain business entities to jointly develop forecasts along with agreements.
Stage 1. Demand forecasting
In this stage, the essence of modern concepts supporting order planning processes, CPFR (Collaborative Planning, Forecasting & Replenishment), and inventory management by the supplier, VMI (Vendor Managed Inventory), was used.
The use of computer simulation for this purpose and the skillful use of all factors influencing demand is intended to enable planners of supply chain business entities to jointly develop forecasts along with agreements.