1. NetWORKS Strategy 6.2 1 Manugistics NetWORKS Strategy 6.2

2. NetWORKS Strategy 6.2 2 Introduction A strategic decision support tool Permits benchmarking and “optimization” of existing and prospective supply chains Support for network design, network utilization, and resource utilization analyses

3. NetWORKS Strategy 6.2 3 Introduction (continued) Net WORKS Strategy is a module in a suite of enterprise profit optimization products from Manugistics. The software employs proprietary database structures and tools to interact with the databases. Other Manugistics modules are

4. NetWORKS Strategy 6.2 4 Other Manugistics Products NetWORKS Demand NetWORKS Fulfillment NetWORKS Procurement NetWORKS Transport NetWORKS Collaborate NetWORKS Sequencing

5. NetWORKS Strategy 6.2 5 Software Architecture and Structure NetWORKS Strategy 6.2 uses a Server – Client Networked Architecture –Fat Server Stores object oriented databases Runs the model processes Manages the Manugistics domains –Thin clients Interacts with data objects Initiates model processes Displays outputs of Optimizer output

6. NetWORKS Strategy 6.2 6 NetWORKS Strategy 7.0 Scheduled for release fall ’02. Transitioning to a Fat Client – Thin Server Web Enabled Architecture in Version 7.0 scheduled for release later this year. The new version will use relational databases rather than proprietary object oriented databases.

7. NetWORKS Strategy 6.2 7 Currently Supported Operating Systems and Platforms Server –Unix –Windows NT, Windows 2000 Professional Clients –Unix based –Windows 98, Windows NT, Windows 2000 Professional, Windows XP(?)

8. NetWORKS Strategy 6.2 8 Fundamental Tasks We Will Cover Installing the server Installing the client Administering the system Scoping an analysis Inputting data and relationships Troubleshooting Analyzing and generating reports Interpreting reports

9. NetWORKS Strategy 6.2 9 “Optimizing” the Supply Chain Optimizing - Achieving the best possible solution to a problem in terms of a specified objective function subject to model inputs. The objective function can either be profit maximization or cost minimization. Optimum is defined subject to a set of constraints and the input data. LP or MIP solutions to the Optimization problem.

10. NetWORKS Strategy 6.2 10 Revenues and Costs Data Selling prices Purchase costs of raw materials Transportation Costs Manufacturing Costs Storage Costs Resource Costs Taxes/ Tariffs Stock out Costs

11. NetWORKS Strategy 6.2 11 Constraints Manufacturing capacity Storage Space Transportation and handling capacity Throughput capacity Inventory levels Sourcing restrictions Pre-build limitations

12. NetWORKS Strategy 6.2 12 Why a Model? Across an enterprise the number of possible solutions is extremely large. An automated, systematic tool that seeks the best solution is valuable in supporting the decision making process.

13. NetWORKS Strategy 6.2 13 Optimization Example, LP Profit: Guns = $2 per unit, Butter = $1 per unit 2100 units of raw material available –Butter requires 3 units, guns require 7 units per unit produced 2400 units of machine time available –Butter requires 8 units, guns require 3 units per unit produced 400 units of labor available –Guns and butter require 1 unit each to produce

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18. NetWORKS Strategy 6.2 18 Optimization Example, MIP Suppose that we can construct one or two plants to make guns and or butter and that each plant has a unique set of labor, machinery, and raw materials constraints. Further suppose that each plant sells their output into markets with different output prices and service requirements. Requires MIP as some decision variables are discreet.

19. NetWORKS Strategy 6.2 19 Real World Example Monsanto Corporation 1000’s of products, 1000’s of resources, hundreds of suppliers, thousands of customers, world-wide distribution. Millions of constraints. Need a model. Need a reliable, automated technique to solve the model.

20. NetWORKS Strategy 6.2 20 Class Resources Installation/Administration Manual Reference Manual Classroom Guide

21. NetWORKS Strategy 6.2 21 Using NetWORKS 6.2 Invest some time in scoping out your analysis. Include just enough detail necessary to answer the questions being asked of you. Do not let the scope of your analysis expand.

22. NetWORKS Strategy 6.2 22 Supply Chain Model Flow Chart Define Problem, Objective, and Scope Create Calendars Create Items Create Locations Create Lanes Create Resources Create SKUs Create and Edit Processes Enter Costs, Prices, and Constraints

23. NetWORKS Strategy 6.2 23 Supply Chain Model Flow Chart Create a Scenario for Analysis Run the Optimizer Review the Exceptions Review the Solution Create a new analytical scenario Run the Optimizer Review the Exceptions and Solution Compare the Scenario Solutions

24. NetWORKS Strategy 6.2 24 Manugistics Explorer