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"Business is not static. You need to capture the dynamic elements."

Supply chain optimization is becoming an important tool in decision support systems because of the availability of improved data, more computing power to make frequent analysis a reality and better algorithms for completing the analysis. Richard Boedi is a former theoretical mathematician who prefers to find applications for his knowledge, and he has been actively involved in the transformation.

Business is much more dynamic today than it was even five years ago when optimizing a supply chain meant working until you produced a 100% correct solution. Now, Richard works with solutions that are 80% - 90% correct, which, believe it or not, are far more useful than “perfection.” The reason that 80 – 90 beats 100 is that by the time 100 is reached, the amount of change in the input data would be so great that the solution would be useless. What becomes important is not primarily the accuracy of the solution, but how often it should be derived.

Meanwhile, new relationships built on collaboration between supply chain partners are increasing the accuracy and relevance of supply chain data. With the advent of technologies such as radio-frequency identification (RFID) tags, data will be updated instantaneously in the near future. Richard sees all this data as a gold mine for finding the hidden laws in how certain elements of a supply chain behave. With these insights in hand, 80% solutions are likely to deliver better value for an enterprise.

Richard has worked hard to integrate new understanding of supply chain behavior and the algorithms that make it useful into tools such as the Dynamic Inventory Optimization System. Dynamic Inventory Optimization System uses patented algorithms and classification schemes to analyze, simulate and evaluate inventories as well as calculate optimal replenishment parameters.

Certainly tools such as Dynamic Inventory Optimization System are valuable for optimizing, but they also serve as decision support by helping to answer the question “Where do I optimize?” As supply chain relationships become more symbiotic and dynamic, in all likelihood the data that you are working with is coming from a partner and that the answer to “Where do I optimize?” may well be in your partner’s operations. Supply chain relationships are not only becoming more collaborative, but they will need to be built on a foundation of mutual trust and benefit.

Richard has come a long way from academia, but for him, this work is far more exciting. He revels in delivering value to his clients by working from the bottom up, guided by the data rather than abstract mathematical proofs.