Applying simulation in a supply chain transformation case

Abstract

Supply chain transformation is an emerging service area in the market which aims at helping clients improve their operational efficiency and reduce costs. As a generic technique for the analysis of complex and dynamic systems, simulation could play an important role in this field. This paper presents a case study showing how simulation could be the key enablement for a supply chain transformation project. A methodology and tool developed by IBM China Research Lab has been applied in this joint project with a world-class supplier of home improvement tools. By applying simulation, the client is provided an insightful view about their business processes and inventory allocation strategy, which serves as the basis for the transformation implementation. Financial results show that simulation has addressed the key issues and provided the client accountable evaluation results for decision-making. © 2006 IEEE.