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Optimization- it’s role in enterprise profitability

Simon Bragg, European Research Director at ARC Advisory Group, discusses the critical role of optimization in enterprise profitability. He explores how management initiatives have evolved from coercive methods to collaborative approaches in supply chain management. Emphasizing the importance of technology, data integration, and process design, Bragg highlights how advanced computational power will enable more sophisticated optimization strategies. The presentation underscores that optimization can create significant value across various sectors, driven by innovative techniques and better decision-making processes.

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Optimization- it’s role in enterprise profitability

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  1. Optimization-it’s role in enterprise profitability Simon BraggEuropean Research DirectorARC Advisory Group

  2. Co-operation Management By Coercion Command Evolution Of Management Initiatives Focus Business Partners Collaboration E-Business Initiatives Suppliers Supply Chain Mgmt Corporation ERP Implementation Company Business Process Re-engineering Quality Department Time 80s 90s 2000+ Challenge is to manage, organize & control, ever greater numbers of people, who are increasingly distant

  3. Management Initiatives Command Optimisation not a key management issue

  4. Management Initiatives Coerce In SCM, Optimization becomes management issue

  5. Management Initiatives Co-operation In SCM, Optimization becomes management issue

  6. Evolution/adoption optimisation? Log (computing power) Optimize Heuristics Operator decision Computing power enables optimisation

  7. Enablers for management initiatives? Enables Optimization Focus Optimization Process Design Sensible Processes Integration Clean Data Time 80s 2000+ 90s The technology enablers for optimization to occur are in place.

  8. Appropriate techniques Focus External Internal Optimize The Process Forecasting/Data Mining Optimization Action Change The Process Collaboration Simulation Improvement Strategy depends on the issue

  9. Manufacturing/Distribution Product Design Product Launch Planning/Scheduling Services Asset Liability Mgt Lease Arrangements Risk/Return Mathematical Programming Applications • All Sectors • Pricing • Location of sites • Product Mix

  10. The Supermarket or the Bazaar? • Higher price= greater profits • Lower price = greater volume • ~4% increase in revenue Competitors Price List CTP Engine Support Enterprise Applications Suppliers Customers No Application supports Pricing Design Applies: Airlines, Hotels, Car Rental, Process industry, where high proportion of fixed assets

  11. Optimization: Next Steps? Log (computing power) Robust Optimization Optimize Heuristics Operator decision The computing power will soon arrive to enable more sophisticated optimizations

  12. Conclusions • The enabling technologies are in place • The number of potential applications are just limited by your imagination • Optimization could unleash the next wave of value creation

  13. Thank You Presentation available at www.arcweb.com The End sbragg@arcweb.com

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