Unveiling the Magic of Value at Risk
The Challenge of Risk: A Price Too Costly to Ignore
The intricate web of supply chains is fraught with vulnerabilities: stockouts, re-marketing pitfalls, or rising transportation costs. Add to this the demand-supply mismatch, fluctuating ship dates, and changing lead times. The result? An array of logistical nightmares that have planners and stakeholders second-guessing every move they make.
So, how do you add a layer of predictability to this chaotic mix? Enter Value at Risk, a game-changing metric at the heart of what we do here at Noodle.ai.
Why Value at Risk Matters
Value at Risk is not just another buzzword; it’s a tangible, configurable measure that quantifies the financial implications of various risk scenarios in your supply chain. By calculating Value at Risk, we assess the health of your supply chain, factoring in probabilities for different outcomes.
Let’s break it down a bit further.
The Noodle.ai Approach to Value at Risk
Predicting Supply & Demand
We leverage robust, productized AI engines to provide a highly accurate, probabilistic view of what’s likely to occur on both the supply and demand fronts. Our predictive models consider granular details reconciled across product categories, geographical locations, and timeframes. The result? An unmatched perspective of inventory imbalances across your entire network.
Probabilistic Risk Prediction
Once we have this probabilistic view, we can calculate the Value at Risk for each variable—lost revenue, unnecessary transportation costs, or inventory obsolescence. The estimated risks are dynamically configurable and can be updated to reflect your ever-changing business priorities.
Identifying Revenue & Cost Implications
We go beyond the obvious, identifying revenue risks like stockouts and cost implications. Consider the expenses of excess inventory or the penalties incurred for failed service levels. By systematically identifying these variables, we can calculate your organization’s actual Value at Risk.
Answering the ‘Why’
We recognize that numbers alone can’t tell the entire story. We focus on interpretability and explainability, answering the “why” behind each risk factor. This makes it much easier for planners and stakeholders to engage in data-driven dialogues, concentrating on issues that matter the most.
Taking Corrective Actions
Our system is not just about diagnosis; it’s about treatment as well. We recommend corrective measures that help you mitigate risks, be it expediting shipments or reallocating inventory. And the best part? These recommendations can be automatically approved and integrated into your planning and ERP systems.
The Outcome: Better Risk Prediction & Decision Making
At Noodle.ai, we don’t just help organizations comprehend the risks they are up against; we offer actionable insights that make risk management a walk in the park. Our Value at Risk metrics ensure that you can focus on growing your business rather than getting bogged down by the complexities of supply chain risks.
So, are you ready to embrace a future where Risk becomes a comprehensible, manageable aspect of your business planning?
Reach out to us, and let’s make your supply chain as predictable as possible, one Value at Risk calculation at a time.