Using Simulation to Assess the Performance of a Large-scale Supply Chain for a Steel Producer

Abstract

This paper summarizes the simulation technique and technology used for assessing the Key Performance Indicators (KPIs) for the supply chain of a large-scale steel producer. To this end, a Discrete Event Simulation (DES) model of the underlying supply chain is built, verified and validated, and set to produce a selected set of KPIs that characterize the supply chain performance in terms of responsiveness, efficiency, and productivity. A base model of the steel producer supply chain is first developed based on collected information and the process structure. The model is then verified based on the intended flow and logic of the company supply chain. Special logic is developed into the model to track customer orders and produce the selected set of the supply chain KPIs. The model behavior is validated with company officials and tested using the collected data. Preliminary results were encouraging and were reported in terms of supply chain KPIs. At this stage, the developed simulation model is used to assess and validate the current status of the supply chain performance taking into consideration the key deterministic and stochastic factors across the supply chain (supplies, warehouses, operations, storage, and distribution). In the next implementation stage of the project, further data will be collected and incorporated into the model and the model will be used for scenario analysis and as a platform to optimize (improve) the performance of the supply chain.