Simulation: Achieving supply chain resilience

Supply chain resilience is about resolving problems swiftly by preparing and planning for them in advance. This includes sourcing materials, managing logistics and ensuring timely product delivery. This includes finding materials, logistics and product delivery. A resilient supply chain can recover from disruptions. Events like the pandemic, ship offloading delays and geopolitical conflicts affect supply chain logistics, suppliers and workers. Disruptions can also come from unexpected competition, market shifts and changes in consumer behavior.

Organizations need effective supply chain mitigation plans. One of the best ways to provide insights and develop contingency plans is through simulation modeling. A simulation model is a mathematical and computational representation of a supply chain system. It acts like a real-world supply chain, enabling businesses to simulate different scenarios, predict outcomes and assess the impact of decisions and strategies without disrupting actual operations.

Facing down operational challenges

A leading fast-moving consumer goods (FMCG) company found itself facing operational challenges and turned to NTT DATA Supply Chain Consulting to help manage their supply chain risks. The Integrated Demand and Supply Planning practice helped the organization create insightful what-if scenarios and find out if their current infrastructure could support increased production volumes. The company also needed to understand the cause of supply shortages and create contingency plans to prevent future issues. NTT DATA provided comprehensive what-if scenarios to help forestall potential disruptions, identify risks and enable effective decision-making. By playing with different supply chain situations, you can reduce the chances of component shortages and make plans to avoid problems in the future. Can your current infrastructure support increased production volumes? Assess infrastructure development feasibility and identify necessary upgrades or adjustments before you scale up. Create robust strategic plans for supply chain operations, incorporating both short-term and long-term goals to improve strategic and tactical planning. This is the way to raise the standard of your demand planning, supply planning, inventory management and production scheduling. Model different situations and simulate what-if scenarios to foresee potential disruptions, manage risks and make better decisions.

Step-by-step: Implementing the simulation model

Carefully gather production data on current production processes, manufacturing stock availability, supply chain logistics and infrastructure capacity. This data will be the foundation of the simulation model. Develop a simulation model that includes all important parts of the supply chain, from component sourcing to production and distribution. Make sure the model can manage various input parameters and generate outputs relevant to company goals.

Analyze and run scenarios through the simulation model to look for problems and see if you can increase production. Analyze the impact of different variables, such as changes in supplier reliability or shifts in consumer demand. Develop and implement strategies to mitigate identified risks. This may include diversifying suppliers, increasing inventory buffers or investing in infrastructure improvements. Continuously monitor and improve the simulation model with new data and insights. It’s an ideal dynamic tool for ongoing supply chain management and continuous improvement.

Applying a supply chain simulation model will help navigate your current challenges and address future uncertainties. It can help prevent manufacturing stock shortages, make sure your infrastructure is ready for more production and improve the resilience of your entire supply chain.

Contact us and learn how NTT DATA’s Supply Chain Consulting Integrated Demand & Supply Planning practice will help make your supply chain and organization resilient and ready for whatever the future brings. Our top supply chain talent, enabled by proven, leading-edge digital assets — tools, methods and content — deliver actionable insights and measurable outcomes to some of today’s largest and most complex supply chains.