Procter & Gamble and others :

Using Agent - Based Modeling

for Supply Chain Management
 P & GS USE OF AGENT BASED MODELING
 Saves $300 million annually on the investment.


 Agent-based modeling.


 Combined with Bios Group to form agent-based computer

models.


 P&Gs computer simulation

 - perform what-if analysis on three key metrics:
inventory levels, transportation costs and in-store stock-outs.
CONTD..
 Changes observed after the use of agent-based modeling:
 - relaxation of rigid rules
 - more flexibility in manufacturing.
 - more flexibility in distribution.


 Benefits of other companies that used agent-based modeling:

Southwest Airlines Co- optimized the cargo routing.

Air Liquide America LP- reduced both production and

distribution costs.
Ford Motor Co- optimized the trade-offs between production

costs and customer demands.

 Do you agree with P & G that
the Supply chain should be
called a Supply Network? Why
or why not?
YES ..WE AGREE.
 Reason..

 Supply chain- handing off information in sequence.

 Supply network- everybody has visibility to the
information.

 In agent-based modeling: agents are dependent (on
data) on each other.

 So visibility exists and thus it is a supply network.


Intelligent Agents in P & G ’ s Supply
Chain Network
What is the Business
Value of Agent - based
Modeling?

 Predict market shares, sales and profitability.

 Provide strategic and tactical insights into marketplace
behaviour into the future.


 The interactions of thousands of consumers are

 “rolled up” to provide a “total market” result.

 Capabilityto create and analyze dozens of marketing
scenarios in a day.

 Emergent Behaviour.
How does Nutech use AI Techniques to
help companies gain “adaptive”
Business Intelligence? Give several
Examples.
 Nutech Solutions
 Specializes in adaptive intelligence software.


Optimizes


qLogistics
qRisk
qMarketing.
 Examples


 Merck & Co- Efficient ways to distribute anti-HIV
drugs in Zimbabwe.


 Contd …

 Unilever-In the area of manufacturing and supply chain optimisation.

 Macy’s -Generate new store layout options for maximizing customer
 satisfaction and spending.


 Hewlett Packard –Understand the effect on organizational performance

 by a change in hiring practices.


 NASDAQ -Understand what would happen when the “tick size” goes from
1/8 of a dollar to 1/100 of a dollar.


 The U.S. Department of Defense -Conduct war games predicting battlefield

outcomes in a networked information environment.

Thank you !!!!