journal article
LitStream Collection
Industrial Dynamics Simulation Models in the Design of Supply Chains
Towill, D.R.; Naim, M.M.; Wikner, J.
1992 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600039210016995
Reviews the dynamic operation of supply chains and reaches somesimple conclusions for reducing demand amplification, which consequentlyattenuates swings in both production rates and stock levels. The resultsare based on one particular supply chain, for which the use of systemssimplification techniques has generated valuable insight into supplychain design. Although different strategies are compared for reducingdemand amplification as witnessed by one particular supply chain model,the conclusions are nevertheless thought to have wide application and,indeed, implication. Comments in depth on the significance of thesimulation results for the demand chain as a whole, and for the role ofan individual business within the chain. In the first instance, supplychain integration, and in particular free exchange of information, is aprerequisite for progress. In the second case, shows that reduction inlead times throughout the supply chain via JIT is similarly beneficial.Clearly pinpoints the limitation to supply chain improvement which canbe obtained as a result of using JIT alone. This can be an expensive andongoing process of improvement with many spinoff benefits.Nevertheless, shows that the improvement possible by JIT operation of anindividual business can be negated by the failure to design and managethe supply chain dynamics as a total system. The message for anindividual business is thus quite specific. Not only must lead times bereduced via JIT, but also the business must seek to be part of the rightsupply chain, if it is to remain competitive and stable.