Submitted by Daniel Dumke on Fri, 2011-06-17 13:49
I really enjoyed this week’s supply chain reading list and I hope you do too!
Right now I am busy preparing for my visit to Thailand in July where I will have the chance to exchange some thoughts on supply chain simulation and risks. It will be my second stay in Bangkok, but I am really looking forward to it.
Defining a conceptual framework for supply chain risk management can support thinking about risks in supply chains and streamline the decision making process, and therefore improve the current supply chain at hand.
This is similar to a brown-field approach, where gradual changes and risk mitigation strategies are employed onto an existing supply chain. Thus another source for improvement strategies can be a green-field approach, where the supply chain is modeled and optimized to generate new input for real-world optimization.
Today I would like to talk about a non-essential, but helpful part of supply chain management: Simulation.
Simulation can be used in a supply chain setting on many different levels. On a strategic level there are models to analyze scenarios for the optimal locations of one’s factory, on a tactical level inventory management and distribution policies are treated and on the operations side route-optimization is a generally used. Of course there are also non-simulation models for these tasks, but this article is not about the pros and cons of that.
A large proportion of the efforts in supply chain risk management focus on the supply side, even though, using common definitions of supply chain management, the supply chain of course not only contains the suppliers but also the customers down to the end-customer.
Focussing on the supply side, Hallikas et al. 2005 studied the different classes of supplier relationships and what risk mitigation strategies might be effective with these classes. This classification can help both affected parties, in understanding the effects of risk on their relationship.
