Supply Chain Simulation (SCS)

The Supply Chain Simulation decision support tools will enable industry partners to analyze situations at the supply chain level to propose changes in a beneficial way to partners involved in the supply chain.

What if you could minimize stockouts while at the same time reduce your inventory levels? How would it affect your business if you could produce your product in less time? What if you could optimize schedules across your entire supply chain and quantify the results?

These questions and others are addressed by the Supply Chain Simulation tools developed by the Demand Activated Manufacturing Architecture (DAMA) project and [TC]².

The goal of the DAMA project was to enable the U.S. ITC (which includes fiber, textile, apparel, and retail industries) to reduce time in the supply chain pipeline by enabling the rapid exchange of information among business partners. Supply chain collaboration includes computer-based decision support tools for cooperative business management practices where all members of a supply chain pipeline will benefit from the decisions made.

Supply Chain Integrated Analysis
One such tool developed by the DAMA project is the Supply Chain Simulation for mid- and high-level planners. Supply Chain Simulation is a computer-based tool for supply and demand analysis that uses supply chain information exchanged among strategic business partners in a customer-supplier relationship. The goal is to benefit the supply chain partnership by analyzing the trade-offs among demand forecasts, material availability, lead times and resource capacity, in order to reduce the product time in the supply chain pipeline and to meet inventory and safety stock targets. Supply Chain Simulation will help planners make collaborative business decisions by managing the interaction of production and inventory supply chain management to meet forecasted and unexpected demand for produced goods.

A major focus of the DAMA Project was developing models to prove that a collaborative supply chain would provide superior performance in responsiveness and inventory control. In an effort to provide this simulation capability, multiple models were developed to simulate the supply chain alternatives. These models include all of the planning, production, and distribution functions that exist in the current business process. Production is driven by forecasts that are developed through Demand Planning, Corporate Resource Planning and Product Resource Planning. Incoming orders are processed through Order Fulfillment and into the Warehouse for shipping to customers.

The first models developed focused on improving lead-time through the supply chain. These simulation models, the Traditional Industry Supply-Chain Simulation - Lead Time (TISS-LT) and Collaborative Industry Supply-Chain Simulation - Lead Time (CISS-LT), were developed to show the direct impact that collaborative business processes have on lead-time through the pipeline. As expected, the effects on lead-time were dramatic and showed clearly that CISS-LT was indeed more responsive to fluctuations in consumer than demand than TISS-LT.

Once these initial models were proven, more detailed models were developed to show that collaboration had positive effects on both lead-time and inventory costs. Using the original models as a foundation, the Traditional Industry Supply-Chain Simulation (TISS) and Collaborative Industry Supply Chain Simulation (CISS) models were developed. These models include additional logic to model both lead-time and inventory cost. The CISS and TISS models are used to demonstrate the broader impact of building a supply chain based on the DAMA Architecture.

Aanalyzes a supply chain for cooperative solutions by passing demand-related information backward through the pipeline, and by passing manufacturing constraints and other supply-related information forward toward retail.

"What if" Capability
With TISS and CISS, a planner can perform "what if" analyses to assess the impact of various decisions in order to enhance supply chain performance for all strategic business partners. Potential "what if" analyses can assess alternative partnership scenarios or even the percentage of plant capacity reserved for a designated product line or preferred customer. This "what if" capability gives planners a way to examine possible outcomes of a business change without making costly investments.

The planner interacts with TISS and CISS through an easy-to-use graphical interface to construct a simulated supply chain, design a business-case scenario, run the analysis, then view the graphical output results showing the performance of the entire supply chain. Different choices can be made for an alternative scenario and the analysis repeated. TISS and CISS can be used at the supply chain level to identify potential improvements and to develop supply chains to meet quick response goals for all partners.
To learn more about how TISS and CISS can help strengthen the links in your supply chain, contact [TC]²:

Library Index | Home