simulation
TRANSCRIPT
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The Role of Modelling and Simulation in Supply Chain
Management
SURAJ KUMAR BOTHRA – PGDM IB (06)
CHANDAN TREHAN – PGDM OPS (160)
AMIT KUMAR PRASAD – PGDM OPS (102)
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The Supply Chain Operations Reference model
It focuses on a particular company and is based on five distinct
management processes:
Plan Source Make Deliver Return
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Tete-a-tete with the Article Fundamental nature of a supply chain
(a) The system under study is the supply chain of a given enterprise
Internal (Integration of previously separate operations) or
External (Cooperation between the enterprise and the other actors)
(b) The supply chain under study is a network of enterprises
Supply chain is a “network of organisations that are involved”
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Long range (strategic) decisions supply chain configuration: number
and location of suppliers, production facilities, distribution centres
Medium and short range decisions
(tactical and operational)
material management, inventory management,
planning processes, forecasting processes,
etc.
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“Closed loop” dynamic system
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** how to exchange/share information?
** how to solve problems of mutual interest?
** how to set up global supply chain indicators ?
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Role of Simulation in SC Performance evaluation
(a) Analytical methods, such as queuing theory
(b) Physical experimentations
(c) Monte-Carlo methods, such as simulation or emulation
A modelling and simulation approach is the only practical recourse The ability to carry out “what if“ analysis that lead to a “best” configuration
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Here is how simulation helps!1. Supply chain design decisions: Localisation, Selection of Suppliers, Size, Stock Level
2. Supply chain control policies: Inventory Management, VMI (Vendor Managed Inventory), CPFR (Collaborative Planning, Forecasting and Replenishment), Info Sharing
Simulation focuses primarily on the dynamics of the physical and decision processes in the supply chain
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Application of Modelling and simulation on SCM
Problem
1. Degree of Systematic decomposition of SCM model:- Decision system- Information system- Physical system
2. Distribution level of the system:- Centralized - Decentralized
Reduction of execution simulation time
Enhancing tolerance to simulation failures
Preparation of SC control changes
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SIMULATION APPROACHES TO SCM
1. Continuous approachForester
- Dynamic system paradigm: not possible to differentiate individual entities.
- Management control: performed by making variation on rates (production rate etc.)
2. Discrete approach
- Time bucket driven- Event driven
Time bucket driven:
- Time is divided in periods of given length.
- Time is incremented step-by-step- Lead time is more than time
bucket- States are the states of the set of
resources
Event driven:
- Used extensively in job-shop simulation
- States are the states of the various items
- A time advance algorithm that suitably manages a future event list is mandatory
- State changes are characterized by appropriate logic conditions
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Decision systems and simulation models (simulation vs. emulation)
The inherently distributed nature of a supply chain
Modularity of the control (i.e., management) system and the shop-floor model must be retained
Centralized SCM –Physical system, control system and Information system –Simulation model built by appropriate model from one or more of these subsystems.
Distributed SCM- Same as centralized however different simulation models on different computers.
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Simulation Models
Centralized Simulation-Single Simulation model
• Strategic (for long term objectives)
• Operational (for short term goals)
MAS-Multi Agents Systems decision simulation
• Dynamic environments • Agents representing SC
entities take specific roles within supply chain structures
• Different agents may represent different structure
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Simulation for Product Driven Systems• Planning & Scheduling Agents along with Agents representing physical elements
corresponding to products• Autonomous decision making features• Simulation Model formed in 2 parts
• Emulation model-entities represent items without attributes • Control model- Information flow originating from events in emulation model.
• Hybrid Architecture- RFIDs• Optimization abilities of Centralized control systems • Responsiveness and Robustness of decentralized control systems
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Problem features that impact the nature of
simulation model
Degree of Systematic decomposition (Decision
system, information system, physical system)
Distribution level of the system (Centralized and
De-centralized)
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Simulation MethodologyProblems
with Simulations
• Understanding Model Structure and Model Behavior
• Number of Objects and Number of Events may become very large
Restricting the Size of Simulation
• Abstraction• Aggregation• Reduction
Simulation Methodology
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Conclusion
Simulation is the most powerful technique to gain insights into SC, but a lot of investigation needs to be carried out to deal with inherently distributed nature of Supply Chain.
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Thank you!