Logion is a Netherlands-based consultancy that specializes in transportation, distribution, and inventory management. Its consultants and implementation managers use decision support models to improve the effectiveness and efficiency of their clients' logistics operations. By slashing analysis time and enhancing model accuracy, Palisade's state-of-the-art DecisionTools Suite has become critical to the firm's strategy and competitive position.
"When I first read about Palisade's @RISK and BestFit software," says Logion's Rolf van Lingen, "I simply had to have it. This software is really amazing. For some years I've been looking for a flexible product like this. No more stressful late nights working with static Excel spreadsheets in order to meet my clients' deadlines. Palisade's software really makes it easier for me to do my work in less time and with much more fun, too!"
Logion uses the DecisionTools Suite—which includes @RISK, TopRank and PrecisionTree—to optimize these typical client functions:
- transportation planning
- new product introduction
- set inventory levels
- anticipation of supply chain lead times
- back orders
- customer service activities
Logion has developed what it calls Activity Based Costing (ABC) models to improve their clients' transportation and warehousing operations, both in terms of efficiency and smooth workflow. These models can contain up to 75 input variables each. Among the important bottom-line output variables are operating expenses, total labor expenses, costs per product, and costs per client. Van Lingen says traditional single point estimates and deterministic modeling techniques are not appropriate for these ABC models.He uses TopRank to determine which input parameters affect efficiency the most and ranks them in order of importance. These might be arrival and departure of trucks or number and composition of picking orders for example. Then, because static modeling environments are not well suited for dynamic logistic processes, van Lingen uses @RISK to determine the probability distributions that most accurately describe the comings and goings of freight, trucks, etc. "The first time I did this, I was shocked. This now takes only 3-5 mouse clicks, when it used to take me hours!"
The next step is to simulate the process in @RISK, and van Lingen finds these models a big improvement over his earlier static models, especially those used for inventory planning and control. Here, the greater the degree of uncertainty in lead time and demand rate, the more stock will be needed to meet a required customer service level. Variations cannot totally be removed, and this creates a need for an acceptable simulation environment to model trade-offs between service levels and inventory holding costs.
According to van Lingen, Palisade's software has become invaluable for Logion's business. By allowing models to dynamically represent uncertainty, DecisionTools has enabled Logion to provide a much more realistic picture of possible outcomes. And, by systematically crunching the numbers for thousands of scenarios, Palisade software saves the company valuable time and human resources. Van Lingen likes to sum up the software as "really cool and easy to use."