Supply chain analysis: spreadsheet or simulation?

Abstract

In the last few decades, a lot of company effort has been spent in the optimization of internal efficiency, aiming at cost reduction and competitiveness. Especially over the last decade, there has been a consensus that not only the company, but the whole supply chain in which it fits, is responsible for the success or failure of any business. Therefore, supply chain analysis tools and methodologies have become more and more important. From all tools, spreadsheets are by far the most widely used technique for scenario analysis. Other techniques such as optimization, simulation or both (simulation-optimization) are alternatives for in-depth analysis. While spreadsheet-based analysis is mainly a static-deterministic approach, simulation is a dynamic-stochastic tool. The purpose of this paper is to compare spreadsheet-based and simulation-based tools showing the impacts of using these two different approaches on the analysis of a real (yet simplified) supply chain case study.