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Point of view
by ehsan on June 6, 2007
Kinaxis on Response Management has provided a nice review of the article. Specifically I liked the following part in the article:
In my mind, they are simply two approaches suited for two different problems. Years ago the focus of all supply chains was efficiency and trying to run things like clockwork. Process automation and removing people from the process were key objectives. Today, managing volatility and change is critical to success, so the more urgent need has become how to respond, and that requires human judgment. So, where optimization can be used when assumptions are known and stable, simulation that supports human judgment is required when there is frequent change requiring rapid scenario analysis to determine the right course corrections to make.
What do you think? Should supply chain practitioners and execs get knowledgeable in such areas? How important is the role of simulation packages in order to mitigate supply chain risk?
Trackback: http://publish.creative-weblogging.com/publish/mt-tb.pl/73971
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Vote for Can simulation benefit supply chain organizations?:
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Rating: 8.00 out of 1 vote(s) cast.
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Response from:
Eric
(06/06/07 4:39am)
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Today, with long supply chains, and increased security risks, I think some more military style simulations that test the "what if" factor should be employed. I think 3PL's should make this a fundamental lynchpin of their service offerrings.
Quarterly business reviews are great, but the thought leadership comes when you look at what would happen if your warehouse in the US gulf coast got wiped out by a hurricane...and your business happens to be a DIY store. Double impact on consumers etc.
Also associations should run similar scenarios. During Katrina, RILA and other associations helped each other immensely in assisting other member employees even if they worked for competitors.
We have the computing power. Scenario simulation is a key to disaster response and opportunity leverage that may come from disasters.
Eric