Simulation Design In Supply Chain Management

717 Words 3 Pages
Supply chain management is the network of all the business entities and processes which links suppliers and customers and the various operations which involve them. the business entities consist of the manufacturer, suppliers, distributors, retailers, customers. SCM involves multiple firms and their business activities and how they link and coordinate together both up the stream and down the stream with exchange of products, services, finances, information, etc.
This definition creates 3 degrees of complexity in a supply chain. A direct supply chain consists of a company, customer and supplier involved in up/downstream of flows. An extended supply chain includes suppliers of the supplier and customers of the customer, in addition to the
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One way to do this is to create three methods in which a supply chain can be designed. Using network design distribution, rough cut methods and simulation design methods(Ganesan, 1995). Network distribution design plays a major role in deciding the framework for the supply chain of a company. This decides the performance of a supply chain(Sunil Chopra, 2007) by evaluating the customer needs that are met and the cost of meeting those customer needs.(Cohen and Lee, 1989) Network models are made by creating a conceptual framework for manufacturing analysis and using heuristics to optimize the models created. Finally, a comprehensive list of factors(Arntzen et al, 1995) was achieved by minimizing the cost and time factors. This leads us to arrive at the objective to optimize 6 factors,i.e., response time, product variety, product availability, customer experience, returnability and order visibility affect the costs for inventory, transportation, information and facilities/handling which in turn, decides the profitability of the supply chain. On the other hand, rough cut methods involve making operational or short term decisions as a multi-level model. Simulation methods are different from the other two because they can only be used to test the effectiveness of existing methods rather than create a new

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