Supply chain simulation - A tool for education, enhancement and endeavour

Abstract

This paper describes how a participative simulation model is used to demonstrate supply chain dynamics and to model possible improvements to an entire supply chain. A three-year research project in the automotive steel supply chain found that lack of understanding of the core processes throughout the supply chain caused distortion and amplification of both demand and supply patterns. In consequence, this deficit of information is often replaced with inventory - resulting in increased lead times and pipeline cost. At the start of the project there was relatively little collaboration in the supply network. The 'Lean Leap Logistics Game' was developed primarily to foster collaboration. To achieve this, the game had to model reality, and was built on a series of mapping activities. Unexpectedly, it turned out that developing and running the game led to insights into scheduler behaviour, scheduling decision making, prioritising improvement activities and into supply chain dynamics, especially the 'Forrester' or 'Bullwhip' effect. By presenting the experiences of using supply chain simulations, this paper aims at encouraging both academics and practitioners to use this tool to demonstrate and discuss supply chain improvements by simulating their individual characteristics in order to deploy holistic improvements, rather than partial or 'island' solutions. © 2002 Elsevier Science B.V. All rights reserved.