Simulation Modeling and Analysis of the Impacts of Component Commonality and Process Flexibility on Integrated Supply Chain Network Performance

A supply chain can be defined as an integrated business process wherein a number of various business entities (i.e., suppliers, manufacturers, distributors, and retailers) work together. Supply chain configuration is concerned with determining supply, production and stock levels in raw materials, subassemblies at different levels of the given bills of material (BOM). End products and information exchange through (possibly) a set of factories, distribution centers of a given production and service network to meet fluctuating demand requirements. Through the evaluation of the supply chain network configurations, performance indicators of the supply chain such as fill rate, customer service level, associated cost and response capability can be obtained under different network configurations. Different network configurations include: (1) different stocking levels in raw materials, subassemblies and end products; (2) safety stock location; (3) production policy (make-to-stock or make-to-order); (4) production capacity (amount and flexibility); (5) allocation rules for limited supplies; and (6) transportation modes.