Challenges in supply chain simulation

The International Car Distribution Programme (ICDP) has been using computer simulation for over ten years to investigate developments in the supply of new cars from assembly plant to customer. Their simulation model has been used to investigate generic issues such as stock location, multi-market supply, and the impact of product variety on supply chain performance. For example the model has been used to demonstrate the benefits of holding new cars in regional distribution centres rather than at individual dealers, which both reduces the cost of stock and provides customers with greater choice of vehicle. It has also been used by several manufacturers to investigate company-specific supply chain design problems. The supply of new cars has many features which are common to supply chains in other sectors, for example thousands of stock locations, high volumes, wide product variety, variations in customer behaviour and complex information systems. This paper will present an overview of the ICDP simulation and its applications, followed by discussion of some of the major technical challenges that have been encountered - and generally overcome - in the development and application of the model. Not the least of these challenges has been increasing the scale and scope of the model, for example to cover global distribution, while at the same time keeping run-times down to acceptable levels.