Simulation Analysis of a Manufacturing Supply Chain*

Abstract

ABSTRACTA supply chain is a series of manufacturing plants that transform raw material into finished product. A pipeline within a supply chain refers to the stream of information, material, components, and assemblies that are associated with a particular product. It is typical for manufacturing plants to put considerable effort to optimize the performance of a horizontal slice of a supply chain (such as coordination among parts that share a common resource). The need to optimize the performance of the vertical slice (the supply chain connecting raw material to finished product) by controlling the transmission of schedule instability and the resulting inventory fluctuation is often overlooked. A schedule is stable if actual production requirements for a given period do not change from the forecast production requirements. Stable production schedules are important when managing supply chains as they help control inventory fluctuation and inventory accumulation. Failure to control schedule instability results in high average inventory levels in the system.In this paper a simulation analysis of supply chain instability and inventory is conducted, and it is shown how supply chains can be analyzed for continuous improvement opportunities using simulation. The focus is on a stamping pipeline in an automobile supply chain based on operating data from General Motors (GM). It is shown that the techniques used in this paper are a useful tool for supply chain analysis.