Midwest power utility initiated a supply chain transformation initiative. Part of that initiative was the parts network redesign to reduce inventory and transportation costs while staging parts closer to operating centers that serve as hubs for Ameren Operations.
- Mapped the 3 tier supply network including 2 distribution centers (DCs), major parts supply hubs and operating centers, identifying all nodes and transportation links
- Mapped the transportation links to different external transportation providers and internal unions identifying immediate inefficiencies that will be improved through the redesign and union negotiations
- Created an machine learning model using mathematical optimization to minimize inventory, facility and transportation costs while staging parts closer to operating centers
- Ran sensitivity analysis based on changes in fuel costs to help Ameren realign the network if fuel costs decrease or increase
- Ran sensitivity analysis based on major disasters to provide their disaster response “playbook” that will ensure inventory can be staged to support operations and Ameren’s repair teams
- Ameren is realigning their supply network to realize the $2 million in savings that were identified. They are renegotiating union contracts (as they renew) to reduce miles driven during normal resupply deliveries. The supply chain team used the sensitivity results to create different scenario playbooks such as major highways or facilities being shutdown due to disasters such as tornados or earthquakes.