Resiliency and Vulnerability in Short Life Cycle Products’ Supply Chains: a System Dynamics Model

The work is focused on the study of a supply chain related to short life-cycle products, that are goods produced and sold for a limited period of time like fashion goods, electronic devices, health care service and particular foodstuffs. The case study belongs to the last one category and regards a particular good produced by an important Italian food company, with several branches all over the world, operating in the field of snacks, biscuits and bread substitutes. Currently the data in the simulation model are assumed by the authors due to a delay on the provision, but the real company data should be available, properly modified for reasons of confidentiality, for the extended version of the paper. In the following sections a simulation model, implemented using the System Dynamics methodology, will be described. System Dynamics approach is suitable for complex dynamic systems like the one object of this work; this methodology considers in fact time delays and feedback loops, which heavily affect the system structure and behavior. The model has been implemented using one of the most known System Dynamics commercial software: Powersim StudioTM, because of its flexibility and completeness, allowing also integration with databases, external files and ERP systems. The aim of the simulation is to identify and focus on the criticalities along the supply chain in order to minimize the total costs and, consequently, maximizing the company profits.“What If” analysis have been carried out in order to show which is the best policy to adopt in terms – for instance – of safety stock or demand planning. Moreover, the concepts of vulnerability and resiliency applied to these kinds of supply chains have been analyzed. After a short classification of threats and risks for supply chains, the case in which an environmental risk (an earthquake) occurs, striking the raw material supplier, is modeled and simulated with the System Dynamics methodology. The obtained results show that with a more resilient supply chain, characterized by the procurement from two different suppliers (instead on only one) located in different geographical areas, business continuity is guaranteed even in the case of a natural catastrophe. Key WordsShort life-cycle products, simulation, supply chain management, System Dynamics, Powersim Studio, vulnerability, resiliency.