Title
Supply chain analysis methodology - leverage optimization and simulation software
Department/School
Operations and Supply Chain Management
Date of this version
2013
Document Type
Article
Keywords
Supply chain structure; optimization; simulation; decision support; lean operations; design for robustness
Abstract
This article outlines a four-step approach in analysing a complex supply chain using optimization and simulation software tools. The first step consists of Multi-Echelon Optimization to determine the best supply chain structures. The second step involves a Discrete-Event Simulation to determine the appropriate supply chain configuration. The third step, Simulation-Optimization, is then used to improve the supply chain's design established in the first two steps by optimizing the policies used to govern the network's behaviour. The final step, Design for Robustness, ensures that the final selection of the supply chain's network structure and policies will operate well under a wide variety of situations by minimizing the risk of undesirable outcomes. Using a four-step methodology, supply chain modelling provides an efficient supply chain design operating under effective inventory, sourcing and transportation policies. A case study from a Fortune 500 manufacturing company is evaluated using the four-step methodology. Future studies are outlined.
Volume
26
Issue
2
Published in
OR Insight
Citation/Other Information
26(2), 87-119. DOI: http://dx.doi.org/10.1057/ori.2012.10