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A PC Company in Europe faced a number of challenges, such as frequent price cuts, rapid customer order response times, and a steady arrival of new products and features, by increasingly agile and aggressive competitors, which were eroding their market share. Also, poor forecasting caused critical shortages of popular products and excess supplies of others.
Using SIMPROCESS and CACI support, the analysts developed a supply chain simulation model that allowed detailed modeling of various business processes of a manufacturing and distribution supply chain. The team defined the supply chain in terms of seven major process objects:
To analyze the output of the simulation model, statistics were collected on the following performance measures:
The demonstration model offered here is not the model described above. The model shows a similar scenario in the United States (see the description below). In order to view the demonstration model you must have SIMPROCESS installed on your computer and you must have a license. If you don’t have SIMPROCESS you may download a trial version.
You must save the demo model file by RIGHT CLICKING on the file below and select “Save Target As”. Save the file to your computer. After you launch SIMPROCESS select File and Open. Then navigate to where you saved the demo file and select to open it.
For an industrial enterprise, one of key business processes is the supply chain process. The primary goals of supply chain management are to maintain high service levels while minimizing costs. The key problem in supply chain management is how to balance inventory. Variability in demand and process times, complexity of the supply chain objects, and system dynamics create uncertainty that can only be modeled and analyzed with a tool like SIMPROCESS.
This demonstration model represents a typical supply chain for an industrial enterprise with 4 factories, 3 suppliers, and 4 customers (distributors) in the United States. This high level model of the supply chain demonstrates how SIMPROCESS can help define the major processes, resources, and entities involved in providing products to customers. The model also demonstrates the power of the hierarchical simulation capability of SIMPROCESS. To view the power of hierarchical modeling, drill down into the West Coast factory (Factory 1 Reno). Below is a brief description of the model elements.
Customers demand products from the factories. The customer process defines the frequency and quantity of demand from the factories.
Suppliers supply raw materials (supplies or components) to the factories. Each supplier produces different types of raw materials and ships to each factory.
Factories assemble the components, package the goods (inventory) and ship them to customers. A factory typically ships to customers in its geographic region. For example, the west coast factory receives 80 percent of its orders from the west coast customer and 20 percent of its orders from the southwest customer.
Such a model of a supply chain can be enhanced to answer questions such as: