Fidenda Five Series - The Anaplan Optimizer FAQ
Tristan Colgate continues the Fidenda Five blog series where our consultants explore discussion points, innovations or ideas that can be easily digested in a spare five minutes, whether that be on the tube or while waiting for a meeting to kick off. In this blog, Tristan runs through the frequently asked questions relating to Anaplan’s new Optimizer tool.
1. What is Anaplan Optimizer?
Anaplan Optimizer uses a technique called linear programming optimisation to find the most optimal outcome in a model that has multiple linear factors (that is, factors that have a linear relationship with the outcome). In other words, Anaplan allows you to enter information relating to your business operations and the system will provide you with the optimum allocation, distribution or other desired KPIs. This functionality is embedded in the Anaplan platform and can be configured to work on regular Anaplan models (although those models do need to be set up in a specific way). The end user is then able to execute the Optimizer by clicking on a button on a dashboard, and the results are presented, as normal, through a model or view embedded in the dashboard.
The Anaplan Optimiser Configuration Wizard
2. I’m an Excel user. Can you help me understand this in the context of Excel?
You may have used the not particularly well-known functionality in Excel called “Solver”. Optimizer is similar to that in that it is also a linear programming optimization tool, but there the similarity ends. Anaplan Optimizer is built to work on huge datasets, using the power of cloud computing, and on an enterprise scale multidimensional model with all the benefits that come with that like master data management, security etc.
3. What sort of problems can it solve?
There are some great examples in Supply Chain. Imagine you have hundreds of retail outlets around the country selling products from five distribution centres. You have limited inventory in your distribution centres, and not enough to satisfy demand across all your retail units. You need to plan out deliveries from your distribution centres that maximise profitability and there are a number of factors to consider.
Delivery costs – how far is each retail unit from each distribution centre? And what are the costs per kilometre per unit delivered? Is there a minimum viable delivery size to achieve that price?
Retail price – how do your retail prices vary across different retail outlets?
Cost of inventory – how does the cost of inventory vary across your distribution centres?
Trying to manually find the optimal delivery plan, one that delivers maximum profitability, considering those three factors, across hundreds of retail outlets and thousands of products would be like trying to find a needle in a haystack. Optimizer automates the process of finding the optimal solution and can do so in seconds. A useful side effect is that Optimizer will naturally identify any retail outlets that are no longer viable.
4. Are there any constraints I need to be aware of?
Importantly, Optimizer can only support resolution of linear problems. That is, where the relationships between the factors are liner. For example, if distribution costs increase in a straight line with increasing distance from the distribution centre in the example above, this is a linear relationship. If the relationship is more complex, for example if you’re trying to optimize delivery time and that time increases exponentially, depending on the amount of traffic, then this isn’t a relationship that Optimizer can optimise.
From a modelling perspective, understandably Optimizer needs to take its input in a certain format. This means you can’t simply ‘point’ it at an existing model, however it is straightforward to take an existing model and build some Optimizer-friendly modules on top to make use of the functionality.
5. How is it Licensed?
There is a separate cost for Optimizer and it is not part of the core subscription package. If you’d like to get an estimate for your business, reach out to your Anaplan representation or implementation partner who can help with this.
6. How can I find out more, maybe try it out?
Feel free to get in contact with us and we’d love to demonstrate Optimizer. We have developed an interactive game in Anaplan where you can pit your planning skills against Anaplan Optimizer to really see for yourself how it works and the sort of benefits it might bring your organisation. The game is also based in the new UX, so it’s a great opportunity to see that in action as well.
Fidenda's Anaplan Optimzer Game - Available to Play at CPX London
List of other use cases
There are a number of use cases for Optimizer beyond those discussed in this blog, for example:
Cost Centre Allocation
Raw material purchasing and pricing