A supply chain process

A supply chain process is made up of the flow of materials, information, and services and the monitoring and control of this flow, which includes raw materials, procurement, production, inventory management, order processing, warehousing, transportation, and distribution (Chapter 7: Simulation). The development of functions to support these operations is known as supply chain management (SCM). Systems can be developed from the top down, starting with a model at a high abstraction level and refining it by a number of steps until the desired level of detail is reached, or from the bottom up, starting with subsystems that are detailed descriptions of some aspect of the system, and composing these subsystems into a model of the entire system.

Modeling and simulation is one of the key technologies of the 21st century which can be applied to a wide spectrum of disciplines, particularly for streamlining company operations of many kinds (Crosbie). Supply chain management is an important facet of the operation of modern companies and simulations of supply chain management is becoming a routine part of such operations. Modeling is used to understand systems of all kinds, and can consist of mathematical equations, rules of procedures, or graphical representations of manufacturing processes, for example (Crosbie, Chapter 7: Simulation). With a well-designed model system, it is possible to produce computer programs that can implement the model and simulate the system. Simulations allow the user of the program to input theoretical data with selected parameters and see if the system works. It is also possible to make adjustments to the system until the desired results are obtained and the model can be put into practice.

Models and simulations are widely used to analyze and optimize business processes and have been in use for many years (Crosbie). Supply chain management has come into focus in the last few years because supply chain…

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