The supply chain design software provider LLamasoft has released a whitepaper detailing the benefits of simulating supply chain performance.
The paper describes how shippers and logistics services providers can gain insight into how a supply chain might react to various circumstances.
"By creating a detailed model of the end-to-end supply chain that incorporates variability into elements such as demand, sourcing lead times, transport times, handling and
production, a simulation will report key point-in-time metrics such as: on-time deliveries; inventory levels; expedited shipments; costs (e.g. variability in commodity pricing); and risks (e.g. probability of stock outs, production disruptions).
"If you run multiple iterations, you can also track how drastically the accumulation of these different variables will affect supply chain performance and how wide the swing can be in both
a positive and negative direction," the company wrote.
LLamasoft said two factors are driving supply chain simulation development — more demand from practitioners and the convergence of new technologies incorporating big data analytics and broader computing power.
The whitepaper is available here