Design and Simulation of a Short Life-Cycle Product Supply Chain: A System Dynamics Approach

E. Briano, C. Caballini, P. Giribone, and R. Revetria (Italy)

Keywords

Short lifecycle products, simulation, supply chain management, modeling, system dynamics, Powersim Studio.

Abstract

This paper regards the study of a supply chain for products characterized by a short life cycle, meaning with that a particular type of good that is produced and sold only for a limited period of time, such as fashion goods, health care services, electronic products or some foodstuffs. The real case study regarding a particular product of an important Italian food company producing snacks, biscuits and bread substitutes has been analyzed. Temporarily data in the model are by now assumed by the authors because of delays on their provision, but in the extended version of this paper the real company data, properly modified for reason of confidentiality, will be utilized. More in particular a simulation model, implemented according to the System Dynamics approach, has been developed and shown. This kind of methodology is particularly useful to study the behavior of complex dynamics systems, such as the case object of this work. Moreover it makes able to consider time delays and feedback loops, which dramatically influence the structure and the relative behavior of the system. Powersim Studio software, thanks to its flexibility and completeness, has been chosen among all the available computer simulation softwares for System Dynamics. By simulating the model it has been possible to highlight the most critical issues along the supply chain to focus on, with the final goal of minimizing costs and maximizing the company profit. Besides,“what-if” analysis carried out on the model have shown which is the best policy to adopt in terms –for instance – of safety stock to hold or demand planning methodology to adopt. Further studies will be dedicated to make these kind of supply chain more resilient or, in other words, less vulnerable towards unexpected and damaging events.

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