A discrete event modelling approach for supply chain simulation

Abstract

In today's competitive environment, companies face increasingly diverse challenges. To survive in the next millennium, they need to improve their profit margins by cutting capital costs and creating more responsive and adaptable supply chains to meet the ever changing market demand. This paper aims to investigate how dynamic simulation tools can be used to improve and optimise supply chain performance. The general overview of the supply chain is first introduced, the importance of order release mechanisms is examined and its use as a performance measure to monitor the supply chain is proposed. Simulations were developed to investigate the customer/manufacturer relationship of the supply chain. After the running of the trials a diagnostic evaluation was formed. With the simulation results analysed, significant improvements in lowering inventory costs, increasing output and fulfilling orders on time were achieved.