Brief:
Knauf Insulation used advanced modelling and real-world tendering to design a resilient, low-cost supply chain across Asia-Pacific.

The transparent model allowed stakeholders to test scenarios, align decisions, and confidently implement an integrated supply solution for thousands of customers.

Background

Knauf Insulation embarked on a major expansion project with the construction of a new manufacturing facility in Malaysia. This facility was intended to service a wide region, including Australia, New Zealand, Japan, Korea, and Thailand. However, there was a critical challenge: Knauf had no pre-existing supply chain or established relationships within the region.

Supply chain complexity was extremely high, with multiple transportation pathways (ports, road networks, sea freight routes) and a wide array of suppliers and commercial models to choose from. Previous consulting firms had proposed supply chain solutions based largely on anecdotal experience rather than comprehensive, data-driven analysis. Knauf needed a robust, low-cost, scalable solution that would stand up to real-world pressures — and they needed it quickly.

Problem

• No established regional supply chain or supplier relationships.

• Complex logistics network options (ports, roads, shipping lanes) with no clear best path.

• Previous consultants relied on experience-based designs, lacking rigorous data support.

• High sensitivity to supply chain costs due to the voluminous yet inexpensive nature of the product.

Our Approach

From the outset, we made a key commitment: We would not assume the solution — we would discover it through data and modeling.

• Technology-Driven Modeling: We utilized AnyLogic simulation software to build a dynamic, interactive supply chain model capable of simulating different logistics scenarios.

• Stress Testing: We incorporated supply chain shock scenarios to stress test each pathway and validate the resilience of each option.

• Real-World Tendering: To ensure accuracy, we conducted multiple tenders across different services and geographies, collecting live pricing data for road transport, sea freight, and freight forwarding.

• Data Integration: Tender results were directly input into the model, enabling real-time, data-backed evaluation of total supply chain costs under a variety of volume scenarios.

Our goal was to find not just the cheapest solution under “normal” conditions, but the most resilient, lowest-risk solution under both normal and stressed conditions.

Outcome

• Fully Transparent Supply Chain Model: Knauf Insulation received a real-time, dynamic model where executives could adjust variables (e.g., customer volume, port choices, shipment frequency) and immediately see the cost and profit impacts.

• Confidence to Execute: Using the model, Knauf implemented a fully integrated supply chain solution spanning thousands of customers, multiple local road freight providers, major global sea freight carriers, and freight forwarders.

• Flawless Initial Execution: The supply chain operated seamlessly — until external shocks like COVID-19 disrupted the global logistics environment.

Lessons Learned

• End-to-End Integration is Critical: Designing each component of the supply chain in isolation inevitably creates inefficiencies, hidden risks, and “blame shifting” when things go wrong.

• Data-Driven Decisions Beat Opinions: Strong personalities can dominate supply chain decisions without sufficient data, often resulting in sub-optimal outcomes.

• Modelling Brings Alignment: Building a transparent, dynamic model unified internal stakeholders. People could see, challenge, and stress-test options openly, leading to shared ownership of the final solution rather than resentment.

Conclusion

Through a data-driven, model-first approach, Knauf Insulation achieved a resilient, cost-effective supply chain across the Asia-Pacific region. By refusing to shortcut the discovery process and embracing transparency, we helped Knauf avoid costly mistakes and set a strong foundation for growth in the region.