STEP 4
This is Step 4 of the 6 steps to get started — use simulations to see how well your supply chain model works.
RUN SIMULATIONS — See How Your Supply Chain Works and Where Improvements are Needed
Define the four entities (Products, Facilities, Vehicles, Routes) and place them on the map to create a model of your supply chain. Zoom in on the map and place entities where they are actually located in real supply chains, or where you want them to be in new supply chains. Once these entities are placed on the map they create a mathematically rigorous model that is used to simulate the performance of the supply chain.
Use best data available when modeling and simulating your supply chain, but do not obsess over levels of accuracy beyond what is realistic. Supply chain simulations must always be approximations to some degree because getting exact weights, speeds and measurements for every product, facility, vehicle, and route in a supply chain is not possible.
The sequence of screenshots below shows how to simulate the performance of your supply chain and improve its design based on simulation results.
NOTE: Make sure there are no blank numeric fields for any values in the supply chain entities. If you erase a number for one of the entities, either type in a new number, or type in a zero, do not leave it blank as null values can sometimes cause data display problems.
1 — To start a simulation, click the “Simulation” button on the upper right side of the Edit screen as shown below.
(click on screen images for bigger picture)
2 — A new browser tab opens when you click the “Simulation” button. This is the Simulate screen where you run simulations. Click the “Play” button on the Simulate screen to start a simulation.
3 — When the simulation begins, the supply chain operations data generated by the simulation is displayed on the right side of the screen. Vehicles are also shown as they move on the routes to carry products between facilities. Vehicle positions on the map are shown as hourly snapshots so slow moving vehicles move more smoothly and fast moving vehicles move in jumpy motions. Scroll through the list of facilities and click on different facilities to see graphic and numeric displays of their performance. Learn more about analyzing this simulation data in “Analyzing Simulation Data“.
4 — A simulation will run until it finds one or more points of failure. Points of failure are facilities in the supply chain that either run out of products or that accumulate too much on-hand products and thus run out of storage space.
5 — Data displays provide information about supply chain performance. Use this data to assess what is happening and fix points of failure. Shown below are examples of the onscreen data displays available under the four data tabs. The facility tab shows data about facilities. The vehicle tab shows vehicle data, and the products tab shows product data. The console tab shows all the data. When the simulation finds a point of failure or when you click on the “Stop” button, a button appears on the Simulate screen that allows you to download simulation data to your computer for further analysis. The button is labeled “Export Results to Excel” and it appears in the upper right corner of the screen. Click this button and simulation data will be exported to your computer as a comma separated values or CSV file that is readable by any spreadsheet. Learn more about this in the online guide section “Analyzing Simulation Data“.
6 — Leave the simulation browser tab open so that you can refer back to the data as needed. Click on the browser tab for the screen where you edit the definitions of the four entities (Products, Facilities, Vehicles, Routes).
7 — Make changes to products, facilities, vehicles and routes as needed to fix the point of failure that caused the simulation to stop. In the edit screen as shown below, use the accordion menu on the right to select the products, facilities, vehicles, and routes that you wish to change. Make changes and click “Update” button to record those changes. From time to time, as you make changes, click your browser refresh button to redraw your supply chain on the map in the Edit screen. As you edit one route, other routes will disappear. Click browser refresh to see all the routes in your supply chain again.
8 — You flip back and forth between the two browser tabs as you encounter points of failure in your supply chain design and fix those problems, . On the edit tab you edit the definitions of the four entities to fix points of failure, and on the simulation tab you run the simulation again to see what happens. Always click browser refresh or “Reload Supply Chain” button on the simulation screen before running a new simulation.
If you go back to the EDIT screen before playing the simulation and make more changes, you need to click browser refresh on the SIMULATE screen to update the simulation with those additional charges before you play the simulation.
Simulations typically are for 30, 60, or 90 day periods. If you do wish to simulate longer periods of time please see the online guide section “Tips for Building Supply Chain Models” and scroll down to the heading “Simulation Timeline”. You can generate weekly data to cover longer periods of time, but if your simulation generates daily data for 100 days or more, there will be too much data and the data download function will not work.
Learn more about analyzing simulation results and see how to DOWNLOAD SIMULATION DATA to create monthly Profit & Loss Reports in “Analyzing Simulation Data“.
[If you are using SCM Globe Professional version, reports can be generated automatically by clicking on the “Generate P&L Report” button on the Simulate Screen]
SAVE BACKUP COPIES of your supply chain model from time to time as you make changes. There is no “undo”, but if a change doesn’t work out, you can restore from a saved copy. And sometimes supply chain model files (json files) become damaged and they no longer work, so you want backup copies of your supply chain to restore from when that happens.
DOWNLOAD AND SHARE SUPPLY CHAIN MODELS to send a copy of your supply chain (.json file) to other SCM Globe users.
DIFFERENCES BETWEEN SIMULATION AND OPTIMIZATION
There are big differences between simulation and optimization. SCM Globe runs simulations. The simulations generate data that can then be used for optimizations.
SIMULATION allows you to model any existing or proposed supply chain and see how it works. It shows how different supply chain designs will work, and what their costs and performance levels will be. Simulations show which supply chain designs work best in any given situation. They let you see how supply chain entities interact with each other, and how the entire supply chain works as a unified system. Simulations also generate data that can be used in optimizations.
OPTIMIZATION allows you to take a single supply chain design and optimize specific variables in order to obtain the best possible performance from that design. Optimizations require that every time a variable changes (such as fuel prices, rent or labor costs, demand forecasts, procurement costs etc.) a new optimization should be done to take those changes into account. Last month’s optimized solution can quickly become this month’s big mistake.
Optimizations refine existing designs, but they do not create new designs. There is no computer algorithm or AI app to replace creative thinking and problem solving — this is your job. This is a skill we humans have developed over hundreds of thousands of years and we are good at it. Build your creative thinking and problem solving skills by using simulations to explore different ideas and see what happens.
Real world supply chains continually work toward optimal performance, but they can never actually achieve optimal performance because unforeseen events caused by factors out of our control will always force supply chain operations to be less than optimal. The best approach is to use simulations first to identify good supply chain designs, then optimize their performance as best you can. Good performance in a good supply chain design beats optimized performance in a bad supply chain design. We provide spreadsheet templates for you to import simulation data and apply optimizing algorithms to your designs. Learn more about this in “Supply Chain Optimizing & Reporting Template“.
As new information becomes available, keep updating your supply chain model and running simulations. Use continuous simulations like radar to probe through the fog of uncertainty on the road ahead. Find the best ways to respond as events unfold.
You can learn more about the modeling and simulation logic used by SCM Globe in “Supply Chain Modeling and Simulation Logic”
** IF YOU PURCHASED the BUSINESS EDITION: SCM GLOBE PRO — Please contact us (info@scmglobe.com) to activate the data import/export features, and the automatic modeling and reporting features of SCM GLOBE PRO. You can also schedule your one hour training session included with SCM GLOBE PRO.
NOW VIEW quick start tutorial: STEP 5 — Working with Case Studies
NOTE: The academic version of SCM Globe supports supply chain models containing up to 15 – 20 products and a similar number of facilities, vehicles and routes. Models exceeding these limits will run slowly and experience other problems. See “Tips for Building Supply Chain Models” for ways to work with these limits and other useful techniques you will need when you build new supply chains or add new products, facilities, vehicles and/or routes to existing supply chains.
[ Accounts default to 90 days from date of purchase – if your semester is a few weeks longer please send email to: info@scmglobe.com – tell us your semester end date and we’ll extend your account. ]