Do you know your cash flows?


Our series: Supply Chain Simulation / Part 12

Do you know your cash flows?

It is important for a company to know which products and customers bring the greatest profit and which may cause loss. The crucial question is whether the cash flows justify maintaining the service and how the cash flow can be optimized.

When considering supply chains and their profitability, especially multi-echelon supply chains, the interactions between customers, distributors, suppliers, warehousing and manufacturing can be very complex. Different financial frameworks may apply to each product and location, and these may also change over time.

Even with all this information, it can be difficult to keep a clear view of cash flows. It is also risky to rely on forecasts based on this information without considering the broader context of the supply chain.

anyLogistix (ALX) provides a platform to clearly display cashflow information and uses simulation models to detail how a supply chain works and capture its rules and dynamics. This enables understanding as well as forecasting through iterative simulation experiments.

Cash-to-serve statistics can be used to analyze the supply chain cash flows required for operations over time. This data, including cash on hand, credit, interest, and account information, aids in decision making and policy design, such as outstanding payments and down payment ratios.

With regular information from your supply chain, you can create a digital twin of the supply chain and benefit from situational insights for agile operational decision making.

ALX displays cash flow over time, including:

  • Cash on hand
  • Loan
  • Interest
  • Trade accounts payable
  • Accounts receivable
  • Payment terms

ALX captures the nature and details of payment flows in the supply chain. For example, accounts and payment terms take into account interest-bearing loans, late payments, and down payments. By understanding payment flows, it is possible to prioritize products and customers to maintain service levels, reduce costs, and improve margins. In addition, simulation modeling allows you to develop optimal and robust supply chain strategies for the future.

Source: The AnyLogic Company

Deepen the topic on our free web seminar on 29.09.2022

Learn more about how dynamic simulation is proving to be the only reliable way to deal with supply chain uncertainties. Register for our web seminar on 29.09.2022 from 11:00 to 12:00

Or simply contact our SCM expert Till Fechteler for an individual consultation.