Dallas-based River Logic, a provider of prescriptive analytics technology, has used its supply chain optimization tech to create a ‘digital twin’ of multinational tobacco company Philip Morris International’s global manufacturing footprint.
It’s a huge feat—Philip Morris International (PMI) has some 40 manufacturing centers around the world.
“When it comes to sourcing optimization on a global scale, especially for an industry that is changing so quickly, it’s crucial that manufacturing companies consider the end-to-end value chain, not just the supply chain,” Carlos Centurion, president of River Logic, said in a statement.
River Logic and PMI formed a partnership to help address PMI’s supply chain optimization needs and create the digital twin. Centurion said his team is thrilled to be a preferred technology vendor for the cigarette and tobacco manufacturing giant.
The solution has scenario analysis capabilities and advanced prescriptive analytics capabilities that are meant to help PMI assess the impact of changes in local market regulation, business disruption, product portfolio changes, equipment moves, and more.
“River Logic enables companies like PMI to re-evaluate network optimization decisions on a more frequent basis — like weekly or monthly — rather than yearly,” the company said.
It was important for the River Logic team to represent end-to-end value chains, rather than just silos. The better the planning model, the better the outcome and value of a decision.
“The next frontier is for technology to go beyond patterns and predictions to recommend business decisions,” Centurion says. “This is where the concept of a digital planning twin comes in, which complements AI by representing business constraints applying prescriptive analytics (optimization) to identify the best path given the company’s objectives.”
A key requirement that PMI had was the capability to run forward-looking optimization scenarios. Using robust financial modeling, the tech can show manufacturing costs, duties, and transportation costs across the network.
The partnership comes at a key moment for PMI as its business ecosystem drastically changes.
With the introduction of the smoke-free product category into its portfolio, PMI has been hit with a number of non-standard complexities and new constraints across its value chain.
According to Alexandros Skandalakis, PMI’s director of manufacturing capacity and footprint, traditional tools and techniques can no longer support the company in setting up a roadmap.
That’s where River Logic came in. Skandalakis said that implementing the solution enables PMI to extend the number of variables that could impact decisions.
It’s can be used to look at sourcing options, capacities and capabilities, inter-trading-zone product duties, inter plant product transfer prices, and distribution costs.
“We reduced spread sheet simulations by 90 percent and decreased the time required for scenario evaluation from weeks to hours,” Skandalakis said. “Today, we have a digital, collaborative and cross-functional tool helping us identify and quantify sourcing opportunities at a global scale, across different product categories, for up to a ten year glide path period.”
A deep dive into River Logic
Implementing these solutions is just part of River Logic’s DNA.
River Logic was founded in Boston in 2000 but has since moved its headquarters to Campbell Center in Dallas. With more offices in Seattle, London, Boston, and Russia, River Logic’s nearly 55-person team is driven by innovation, trust and transparency, and customer satisfaction.
According to Centurion, each employee is there because they innately believe in the power of the software.
“They all understand the unique value and differentiation of our tech in the market and believe in its ability to transform the world of advanced analytics (optimization) by delivering solutions that offer unmatched value to business of all sizes and industries,” he told Dallas Innovates. “Many of our team members have been at the company for 15-plus years for exactly that reason.”
Today, the company lauds itself as a global innovator with a platform that offers a combination of prescriptive analytics, visualization, and embedded knowledge. It’s taken additional innovations to make the original idea feasible over the past two decades, but according to Centurion, that’s what differentiates River Logic from competitors.
“Lately we have been expanding our vision to provide our partners and customers with more value,” he says. “However we don’t think of innovation just at the product level, our business model, go-to-market approach, and many of the things we do are also highly innovative.”
As a software company, River Logic’s foundation is to make things easier for clients. The intent is to go beyond solutions to integrate data sets that feed the models, automation into the business process, and intelligent communication with users.
According to Centurion, there’s very few offerings on the market that take this approach.
“Businesses of all types face increasing complexity, and an accelerated pace of change—whether driven by globalization, COVID-19, climate change or just constantly changing customer preferences,” he says. “Managers need tools that understand how their businesses work, and that recommend the best path to deal with the changes which maximize their performance.”
The team’s approach is to leverage what already exists in the market through tailored partnerships. At the product level, that means a close relationship with Microsoft, and for solutions and go-to-market, that means partners such as Accenture and PwC.
Up next for River Logic is automation technology, while continuing to expand its delivery, R&D, and go-to-market teams.
“By embedding [the automation of decision sciences] into all key business processes, whereby it proactively identifies issues, runs and serves what-if scenarios to users as needed, and automatically executes and provides feedback on decisions made,” Centurion says. “This will require deep integration of AI, prescriptive analytics, RPA, voice recognition, collaboration, and communications technologies guided by industry and digital transformation expertise.”
Quincy Preston contributed to this report.
The story was updated on Sept. 23, 2020, at 11:41 a.m. to clarify the planning frequency capabilities of River Logic. The software enables any frequency of planning, even hourly, according to the company.
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