Machines replacing humans. Similar to what Andrew McAfee and Erik Brynjolfson point out in their article on the decoupling of productivity and job growth, Joe Shamir sheds some light on this trend of process automation within businesses.
Sramana Mitra: Joe, let’s start with introducing our audience to yourself as well as to ToolsGroup.
Joe Shamir: I’m Joe Shamir. I’m one of the founders of ToolsGroup. ToolsGroup has been operating in supply chain modeling, planning, and optimization for the last 20 years. We’ve achieved quite a deep coverage in terms of excellence in certain areas of the supply chain. We are currently serving 250 customers spanning all continents in about 32 countries.
Sramana Mitra: Can you tell me specifically what ToolsGroup does?
Joe Shamir: We provide an integrated product that models the entire supply chain end to end, starting with very detailed understanding of demand in material flows, optimal inventories, and replenishment flows, which basically allows very advanced processes of utilization of the necessary resources in order to satisfy customer demands in a more efficient way.
Sramana Mitra: Would it be fair to say that your focus area is in tuning the logistical part of the supply chain or are you also dealing with the demand in merchandising, inventory, and ordering?
Joe Shamir: We are typically on the modeling, planning, and optimization level – not on the transactional level. Usually, we are not directly involved in merchandising. We receive the demand at the highest level of detail with the highest number of attributes as close to the end consumer as possible. Then, we process it with advance demand analytics in order to understand its nature and be able to make a reasonable prediction. Together with the prediction, it’s also very important to understand the statistical uncertainty of the demand in a way that will be able to model the future in a more reliable way. Then, we extrapolate from that and we translate that demand into statistical flows that has to go through the network and through distribution, production, and transportation nodes in order to satisfy their demand in the most optimal way.
Sramana Mitra: What are the actions that come out of this modeling? Give me examples of things that you do.
Joe Shamir: Typically, we are able to provide the need, as a function of time, in order to optimize the truck load from point to point. It gives orders – what to do, how to replenish, what to produce, when to produce as well as the dynamic optimal inventory level at each location. This guarantees that the end customer will get the highest level of service with the most effective and efficient utilization of resources in the network – in the entire supply chain. It turns into very operational instructions – what to do and how – in order to make that service happen.