Modelling and simulation

Models of discrete event and continuous

simulations

10/12/2010

o Supply chain modeling using discrete event simulation

o Continuous event simulation of depletion mode transistor

Table of Contents

SUPPLY CHAIN MODELING USING SIMULATION ........................................3

ENTERPRISE RESOURCE PLANNING (ERP) Vs. SUPPLY CHIAN MANAGEMENT (SCM) ...........4
FUNCTIONALITIES AND BENEFITS OF THE SUPPLY CHAIN MANAGEMENT..........................5

CONTINUOUS EVENT SIMULATION OF DEPLETION MODE

TRANSISTOR……………………..11

Table of contents 2
 SUPPLY CHAIN MODELING USING SIMULATION

In today’s global market, managing the entire supply chain becomes a

key factor for the
successful business. World-class organizations now realize that non-
integrated manufacturing processes, non-integrated distribution processes
and poor relationships with suppliers and customers are inadequate for their
success. They realize the impact of an organization’s plan on the other areas
of the supply chain.

The impact of an organization’s plan on the whole supply chain is

unpredictable before its execution. Simulation permits the evaluation of
operating performance prior to the execution of a plan. In the practical
application of this concept, the development of the simulation model for the
supply chain management has become a necessity.

In today’s highly competitive market manufacturers face the challenge

of reducing
manufacturing cycle time, delivery lead-time and inventory reduction.
However, every
organization (company) has its own objectives and its own way of decision-
making processes.
Due to the conflictions among the objectives of each organization and non-
integrated decisionmaking processes, there has been a need for a new
mechanism, which help to resolve those conflictions and to integrate
processes. In the early 1990s, the phrase “supply chain
management” came into use. Supply chain management is a process of
integrating/utilizing
suppliers, manufacturers, warehouses, and retailers, so that goods are
produced and
delivered at the right quantities, and at the right time, while minimizing costs
as well as satisfying customer requirements.

Figure 1 shows the structure of a typical supply chain. It consists of a number

of organization –
beginning with suppliers, who provide raw materials to manufacturers, which
manufacture
products and keep those manufactured goods in the warehouses. Then they
send them to wholesales or distribution centers who ship the goods to
retailers. The customers then buy products from retailers. Different
industries have slightly different structures of the supply chain networks.

Supply chain modeling using discrete event simulation 3

Figure 1: A typical supply chain

ENTERPRISE RESOURCE PLANNING (ERP) Vs. SUPPLY CHIAN MANAGEMENT

(SCM)

In the early 1990's, MRP-II was further extended to cover areas like
Engineering, Finance, Human Resources, Project Management etc. Hence,
the term ERP was coined. ERP can be defined, as a software solution that
addresses enterprise needs to meet the organizational goals (including
manufacturing goals) of an enterprise tightly integrating all functions of an
enterprise. An ERP system can include software for manufacturing,
order entry, accounts receivable and payable, general ledger, purchasing,
warehousing,
transportation and human resources. While ERP systems provide a great deal
of planning
capability, the various material, capacity, and demand constraints are all
considered separately
in relative isolation of each other (sequentially rather than concurrently).

A large number of software packages have emerged in the mid 90’s

that are called supply chain management (SCM) systems or advanced
planning and scheduling (APS). The SCM
system apply advanced technologies to achieve improved plans that take
into account most of the factors and constraints that limit the ability to
deliver on time. The leading edge SCM system are able to consider all the
relevant constraints in the procurement, manufacturing, distribution,
transportation and warehousing operations simultaneously, and to perform
real-time simulations of adjustments in the constraints. ERP systems have a
harder time adding these kinds of capabilities because they are mainly
concerned with transaction processing, and also have much more tasks to do
Supply chain modeling using discrete event simulation 4
than just supplier chain optimization. Getting answers from a SCM system
may take minutes or seconds whereas getting answers from ERP systems
may take
hours. Moreover, the answers from SCM achieve significantly superior results
for the company’s business drivers. Those are the main reasons why leading
ERP vendors such as Oracle , SAP and JD Edwards developed new advanced
planning modules and other components of SCM.

FUNCTIONALITIES AND BENEFITS OF THE SUPPLY CHAIN

MANAGEMENT

The following table shows general areas of supply chain management.

Expected benefits of supply chain management can be described as follows:

 Throughput improvements : Better coordination of material and

capacity
prevents loss of utilization waiting for
parts.

 Cycle time reduction : By considering constraints as well as its

alternatives in
the supply chain, it helps to reduce cycle time

 Inventory cost reductions : Demand and supply visibility

lowers the requirement
of inventory levels against uncertainty. Ability
to know when to buy materials based on the
customer demand, logistics, capacity and other
materials needed to build together.

Supply chain modeling using discrete event simulation 5

  Optimized transportation : By optimizing logistics and vehicles
loads. Increase order
fill rate: Real-timevisibility across the supply
chain (alternate routings, alternate capacity)
enables to increase order fill rate.
 Analysis of the supply chain management can help to predict
propagation of disturbance to downstream.
 Increase customer responsiveness : Understanding the capability
to deliver
based on availability of materials,
capacity and logistics.
The need for SIMULATION

Due to the Bullwhip effect, a poor plan can easily propagate to the whole
supply chain areas
[1]. The impact of a poor plan on the overall business is huge. It causes
cycles of excessive
inventory and severe backlogs, poor product forecasts, unbalanced
capacities, poor customer
service, uncertain production plans, and high backlog costs, or sometimes
even lost sales.
Although the ERP and SCM solutions provide lots of benefits to industries, it
is too costly to
use those solutions for academic research.

Discrete event simulation permits the evaluation of operating performance

prior to the implementation of a system:
It enables companies to perform powerful what-if analyses leading them to
better planning decisions; It permits the comparison of various operational
alternatives without interrupting the real system; it permits time
compression so that timely policy decisions can be made.

Most of simulation tools are designed as interactive tools to be used by a

human planner not as real time decision-making tools, which are directly
linked to control system to dispatch tasks. Simulation tools aid human
planner to make a right decision by providing information.

However, human planner should be able to interpret and modify the plan in
order to achieve
better supply chain performances.

Benefits of supply chain simulation are as follows :

Supply chain modeling using discrete event simulation 6

  It helps to understand the overall supply chain processes and
characteristics by
graphics/animation.

 Able to capture system dynamics: using probability distribution, user

can model
unexpected events in certain areas and understand the impact of
these events
on the supply chain.

 It could dramatically minimize the risk of changes in planning process:

By
what-if simulation, user can test various alternatives before changing
plan.

DATA REQUIREMENTS FOR SUPPLY CHAIN MODELING

In supply chain, decisions taken are usually classified as strategic,

tactical, or operational.Strategic decisions are related to the company’s
strategy and are long term (2-5 years) with involvement of the most partners
in the supply chain. Tactical decisions are mid term (a month to 1 year).
Operational decisions are short term, which are related to the day-to-day
activities. Tactical and operational decisions are taken in individual area of
the supply chain (e.g. plant and warehouse).

Selection of performance measures is depends on the organizational

goal. Example performance measures can be found from .

The following procedures for the simulation study of supply chain

management :

 Understanding supply chain processes (understanding the business

process and
industry characteristics) and planning processes

 Design scenario (Most of the time it is not reasonable to model every

details of the supply chain. It is a good idea to focus on the problem
areas)

Supply chain modeling using discrete event simulation 7

  Data collection
 Performance measures
 Define target (what is near optimal) for
each performance measure
 Define termination condition
 Evaluation of supply chain policies/strategies

Figure 2 and Table 2 show a simple supply chain model and example data
requirements for the
supply chain modeling, respectively. Some of the questions the users might
have are
as follows :

 Which supplier policy is achieving best delivery performance under

given
demand pattern ?
 Which supplier policy is most robust under demand fluctuation?
 Which is the most cost saving inventory policy under given demand
pattern ?
 How would profit can be impacted by adding xx % more capacity?
 What is the trade-off between delivery performance and inventory cost
when
building more inventory?
 What is the impact of information accuracy on the manufacturing
performance (e.g. cycle time, order fill rate)

Many researchers are investigating the possibility of creating a simulation-

based real
time scheduling system that will be able to monitor the system status and
make decisions in
real-time. To have the capability, it is desirable to have

(1) capability to interface with legacy databases to obtain information .

(2) hardware and software processing capability to run simulation within very
short time- at least, pseudo in real time .

(3) capability to interface with the control system to assign tasks and receive
feedback on system status and performance.

Supply chain modeling using discrete event simulation 8

Figure 2: Diagram of an example supply chain simulation model.

Table 2: Example data requirements for supply chain model

Supply chain modeling using discrete event simulation 9

Some of the questions the users might have are as follows:
 Which supplier policy is achieving best delivery performance under
given
demand pattern?
 Which supplier policy is most robust under demand fluctuation?
 Which is the most cost saving inventory policy under given demand
pattern ?
 How would profit can be impacted by adding xx % more capacity?
 What is the trade-off between delivery performance and inventory cost
when
building more inventory?
 What is the impact of information accuracy on the manufacturing
performance (e.g. cycle time, order fill rate)

Supply chain modeling using discrete event simulation 10

 Many researchers are investigating the possibility of creating a
simulation-based real
time scheduling system that will be able to monitor the system status and
make decisions in
real-time. To have the capability, it is desirable to have

(1) capability to interface with legacy databases to obtain information

(2) hardware and software processing capability to run simulation within very
short time- at least, pseudo in real time (3) capability to interface with the
control system to assign tasks and receive feedback on system status and
performance.

Supply chain modeling using discrete event simulation 11

 Continuous event simulation of depletion mode
transistor

Continuous simulators are characterized by the extensive use of

mathematical formulae which describe how a simulated component responds
when subjected to various conditions. For example, consider a circuit
described at the transistor, resistor and capacitor level. The behaviour of all
these components are well understood and are governed by several
equations which describe their respective behaviours. A continuous simulator
would apply those equations in the context of the components' environment
and connectivity and produce a continuous graph which accurately reflects
how the components would react if they were actually hooked up in reality.
The graphs usually reflect the changes in the state of the system with
respect to time; however, other relationships may also be demonstrated as
well. Unfortunately, the mathematical equations employed by a continuous
simulator can make the simulation very computationally intensive, especially
in the presence of thousands of interconnected elements. As such,
continuous simulators may be slow and are consequently only useful when
simulating a relatively small number of components which are described at a
low level of abstraction.

As an example of continuous simulation, consider a depletion mode

transistor acting as a pull up for a capacitive load . The schematic for such a
device is presented in Figure 1.1. The transient behaviour of the system is
governed by the equation

Continuous event simulation of depletion mode transistor 12

Figure 1.1: Depletion Mode Transistor Pulling Up Capacitive Load

During the latter stages of the rising transient, a continuous simulator would produce the graph
given by Figure 1.2.

Figure 1.2: Graph Representing Continuous Behaviour

Continuous event simulation of depletion mode transistor 13