Linking Data, Business Intuition, and Computer Simulation for Supply Chain Strategic Decisions
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In today’s global manufacturing environment, world-class companies are aiming to standardize their operations in which their product is built using the same assembly “formula” across all the manufacturing sites. To that end, companies are geared up to a profitable partnership with their supply chain that provides flexibility and responsiveness to the market changes. A large amount of risks associated with product standardization are due to the hidden supply chain costs. If business owners knew them ahead of time, or had the right analysis tools, they could make better decisions regarding globalizing products. This study attempts to show how discrete event simulation can help to identify and mitigate ‘hidden costs’ in the supply chain network suffered from un-predicable events. Unpredictable events such as delays in shipments due to custom, or variability in the lead-time have a significant effect on productivity and hinder efforts of standardization.