A simulation based approach for supply network control

Abstract

We focus on the problem of strategic network design in the context of multi-site enterprises. We develop a simulation model for various supply network designs evaluation. The suggested model is generic in the sense that only input data modifications are needed to adapt the model to a given supply network structure, while the model's procedural logic stays unchanged. The model reproduces the dynamics of the totality of the supply chain activities. It takes into account control policies related to the inventory management and to the scheduling of production activities. It also carries out local optimisations by dynamically allocating the customers’ demands to the appropriate distribution site and the replenishment orders expressed by the distribution and production sites of the enterprise so as to minimise a global cost function. Simulation execution permits to compute various performance measures. These indicators inform the decision-maker about the profit of the enterprise and about its customer's service level. In this paper, we propose to detail the simulation model. Then, for a fictitious problem of supply network design based on two real life applications, we highlight the influence of the control policies on the performance of the studied enterprise.