Framework for embedding strategic use of simulation and optimization technologies in supply chain management

Abstract

Simulation and optimisation technologies provide virtual environments to fine tune supply chain operations and to develop best operational configurations and strategies. However, recent review of literature and a survey of industry professionals revealed that in most instances, these technologies are typically deployed to address specific problems in isolation. Therefore, companies are failing to reap full potential of simulation and optimisation technologies. This paper presents the development of a new framework which should enable supply chain managers to embed these technologies in their decision-making processes. The proposed framework serves as a guide which helps to (a) identify missing resources (Data, Assets, Stakeholders and Processes) and make appropriate assumptions before design or re-design processes begin (b) Identify gaps against competitor business performance and develop strategies to deploy simulation and optimisation to narrow existing gaps and (c) develop necessary capabilities such as improving in-house logistics and / or out-sourcing for better ROI.