Simulation of Supply-Chain Networks: A Source of Innovation and Competitive Advantage for Small and Medium-Sized Enterprises

Abstract

On a daily basis, enterprises of all sizes cope with the turbulence and volatility of market demands, cost variability, and severe pressure from globally distributed competitors. Managing uncertainty about future demand requirements and volumes in supply-chain networks has become a priority. One of the ways to deal with uncertainty is the utilization of simulation techniques and tools, which provide greater predictability of decision-making outcomes. For example, simulation has been widely applied in decision-making processes related to global logistics and production networks at the strategic, tactical, and operational levels, where it is used to predict the impact of decisions before their implementation in complex and uncertain environments. Large enterprises are inclined to use simulation tools whereas small and medium-sized enterprises seem to underestimate its advantages. The objective of this article is to emphasize the relevance of simulation for the design and management of supply-chain networks from the perspective of small and medium-sized firms.