Establishment of Product Offering and Production Leveling Principles via Supply Chain Simulation under Order-to-delivery Environment

In support of the order-to-delivery (OTD) business initiative, a simulation framework has been developed at GM R&D. The OTD simulation program is aimed at simulating the behavior of the OTD supply chain using detailed inputs associated with demand, supply, and production processes. Customer demand variation is a key source of uncertainty in GM’s supply chain. Early capture of customer demand fluctuation enables GM to effectively reduce aggregate mismatch between production and sales and appropriate time series models have been suggested to capture demand patterns based on actual data. The vehicle model and option mix with a given demand variation influences the performance of the OTD supply chain and provides a means to establish certain principles determining the extent of product offering and the scope of production leveling. Analyzing the impact of the model and option mix on primary supply chain performance measures, such as customer wait time, condition mismatch, and parts usage, capacitates reduction of the mismatch between demand and production and stabilizes supply chain operations.