simulation
TRANSCRIPT
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)
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
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”
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.
“Closed loop” dynamic system
** how to exchange/share information?
** how to solve problems of mutual interest?
** how to set up global supply chain indicators ?
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
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
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
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
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.
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
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
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)
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
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.
Thank you!