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A SIMULATION CONCEPTUAL MODELLING     METHODOLOGY FOR SUPPLY CHAIN       MANAGEMENT APPLICATIONS                          ...
Aston University      A Simulation Conceptual Modelling Methodology for Supply Chain                        Management App...
To my late grandfather for whom I hold great respect and pride         Hon. Alderman Albert [Tom] Matthews MBE            ...
AcknowledgementsFirstly, I would like to sincerely thank Dr. Doug Love and Dr. Pavel Albores for supervising this PhDthesi...
Notations used in thesisBeerCo        Beer company supply chain caseCarCo         Car company supply chain caseCHR        ...
PublicationsDuring the period of conducting this research the following publications have been contributedto:Albores, P., ...
Table of ContentsThesis summary .............................................................................................
3.6    Ethical considerations and issues.....................................................................................
7.3.4     Phase 4: Determine how the inputs and their sources interconnect .................... 153    7.3.5     Phase 5: ...
References...................................................................................................................
List of figures in thesisFigure 1.1    Overview of the thesis structure and research programme ..............................
List of tables in thesisTable 2.1 Selection of contributions that meet search terms in each academic database ......... 29...
Table 8.3    Statement of how each process represents each improvement (CoffeePotCo) ....... 189Table 8.4    Promoted proc...
Chapter 1 IntroductionChapter one discusses the context of the research project for the development, refinement andprelimi...
interest, for both theory and practice (Christopher, 2004; Hines, 1994; Lamming, 1996; Saunders,1995, 1998; Croom, Romano ...
need to create a conceptual model. However it is the least understood aspect in the process(Law, 1991; Robinson, 2004a; 20...
A five stage research programme has been designed which contributes to the attainment of eachof the research objectives no...
complex supply chain development cases before the revised design is aligned to show that itmeets the specification of the ...
understanding the importance of ways of thinking of tackling a simulation problem (e.g. Nance,1994; Robinson, 1994; Brooks...
Introduction     • Chapter 1: Introduction to research project                    Development • Chapter 2: Research issues...
Chapter 3   Presents an overview of the research programme and methods to address the            aim and objectives of the...
detailed. The chapter concludes by aligning the detailed design to demonstrate                that the specification prese...
The term ‘supply problem’ is used to incorporate the improvements that have been selected toimprove performance for a give...
The definitions provide some useful distinctions that have shaped this research project. Thisincludes that the definitions...
A five stage programme has been designed to achieve the aim and objectives set out in this thesis.This includes a review o...
Chapter 2 Research issues in conceptual modelling for SCMapplicationsThis chapter identifies and discusses the relevant re...
2.1     Scope and selection of contributions in literature reviewThe scope of the literature review gathers contributions ...
objectives (see Kotiadis, 2007). SSM includes a stage for building a conceptual model to describeactivities and processes ...
Table 2.1             Selection of contributions that meet search terms in each academic database                         ...
by Handfield and Melnyk, 1998; Chen and Paulraj, 2004); to one that has more scientificdevelopment and recognition as a di...
maximise an organisation’s performance and the benefits received up (towards the ultimatecustomer) and down the supply cha...
up of these selected supply chain improvements, to achieve a supply chain objective, within thesupply setting that is spec...
2.4.1 Range of approaches used in simulationThe range of approaches used in supply chain simulation is overwhelming. Van d...
and manufacturing led packages (e.g. Witness used in Albores et al, 2006; Arena in Persson andAraldi, 2009) which have bee...
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
Miles Weaver PhD Thesis
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Miles Weaver PhD Thesis

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Dr. Miles Weaver, PhD thesis entitled 'A simulation conceptual modelling methodology for supply chain application'

Awarded from Aston Business School, Aston University.

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  1. 1. A SIMULATION CONCEPTUAL MODELLING METHODOLOGY FOR SUPPLY CHAIN MANAGEMENT APPLICATIONS MILES WEAVER DOCTOR OF PHILOSOPHY ASTON UNIVERSITY OCTOBER 2010This copy of the thesis has been supplied on condition that anyone who consults it isunderstood to recognise that its copyright rests with the author and that no quotationfrom this thesis and no information derived from it may be published without properacknowledgement. 1
  2. 2. Aston University A Simulation Conceptual Modelling Methodology for Supply Chain Management Applications Miles Weaver Doctor of Philosophy 2010Thesis summaryThe research focuses upon the development of a simulation conceptual modelling methodologyfor SCM applications (termed the ‘SCM2’). The originality of the SCM2 is that it combines aprescribed procedure for simulation conceptual modelling with supply chain domain-specificknowledge. This procedure is used to guide participants to create a non-software specificdescription of the simulation model to be developed, in the context of SCM applications.The SCM2 is presented as a series of seven phases, associated steps, who participates in each step,information needs and points of entry between steps. The SCM2 is entered when a client has asupply problem to be evaluated using a simulation approach. The supply problem is described interms of the improvement(s) to be evaluated, for a given objective(s) within its supply setting.From this description, how each objective is to be measured and how each improvement is to berepresented is determined. The interconnections between model components and theimmediate supply setting are discriminated, model boundary formulated and level of detaildesigned. The output from the SCM2 is a documented and validated conceptual model.The need for a greater understanding of how to perform the conceptual modelling stage, as partof a simulation project, is shown to be of great significance and relevance. In particular the thesisargues that no methodologies exist that can guide participants in a simulation project through theprocess of creating a simulation conceptual model. A research methodological programme isdesigned to review existing modelling practice, form a specification for the methodology, developan outline for the SCM2, detail the outline through refinement and application and a preliminaryvalidation of the SCM2.The specification is formed to identify a set of requirements that the methodology shouldaddress. The methodology is developed to meet the specification by refining the outline designusing two developmental cases of typical and complex supply chain problems. The outline designis founded on existing practice for conceptual modelling and identifies ten key concepts that havebeen synthesised by considering the design issues for each requirement identified in thespecification. A major advance made by this thesis is a suggestion that the process of conceptualmodelling could benefit from utilising domain knowledge provided by the Supply Chain CouncilSCOR model. It is demonstrated that using SCOR is a powerful way to enable a more focused andefficient procedure for conceptual modelling. The methodology incorporates the key conceptsand aligns these with a general process for conceptual modelling. A preliminary validation with adifferent supply chain illustration demonstrates that the methodology is initially ‘feasible’ and has‘utility’. Future testing is required in different industrial contexts with actual participants and anopportunity exists to extend the methodology into a web-based application tool.KeywordsSupply chain management, conceptual modelling, simulation, performance evaluation 2
  3. 3. To my late grandfather for whom I hold great respect and pride Hon. Alderman Albert [Tom] Matthews MBE Forever my inspiration Orchards gay with blossom, Beauty, there to see, Hollows where breeze is tender, Moorlands where wind breaks free; Sowing, Lambing, and Harvest, Overlooked by Giant Clee, Hop Kilns, Farmsteads, and TENBURY, This is happiness is for me. Source: Anon 3
  4. 4. AcknowledgementsFirstly, I would like to sincerely thank Dr. Doug Love and Dr. Pavel Albores for supervising this PhDthesis and investing their time in mentoring my early research career. Their energy, drive andsupport has inspired, empowered and enabled me for which I am entirely grateful.I would like to warmly acknowledge my family and friends for their continued support,encouragement and understanding throughout my doctoral studies. My parents, David and PatWeaver, have been a source of determination throughout my life providing the bite to seekfulfilling goals, taking me to new horizons. My sister, Elaine Dolby and my brother, Nigel Weaver,have been there for me during the highs as well as the lows. Sarah Greenhouse provided me withstrength when times got challenging; I am entirely grateful for her support, detailed discussionsand time invested in me during the writing up of my thesis. Similarly, Sarah’s mother Josie keptsmiling and offering her time by proof-reading the final drafts – I shall never forget the supportand encouragement from ‘Team Greenhouse’. My two best friends, Paul and Neil, for helping meto switch off from time to time. I would also like to thank certain colleagues and friends inparticular: Alfred, Anita, Breno, Deycy, Emma, Eleanor, Helen, James, Joanna, Naomi, Natalia, NickT, T.T., Tony and Wenshin, who I have had the pleasure to work with or interact with during suchstimulating times.I would also like to thank researchers who have supported and shaped my doctoral work. Inparticular: Prof. Don Taylor (Virgina Tech), Prof. Rafaela Alfalla-Luque and Dr. Carmen Medina-Lopez (both from Seville University). The data for the industrial development case was gatheredby the FUSION research group (collaboration between Aston, Liverpool and Strathclyde). I amgrateful for all the support and fun times while conducting this research, and look forward tofuture collaborations and projects. 4
  5. 5. Notations used in thesisBeerCo Beer company supply chain caseCarCo Car company supply chain caseCHR Central headrests manufacturerCM Conceptual ModellingCoffeePotCo Coffee pot supply chain caseDES Discrete Event SimulationGSFC Global Supply Chain ForumLA Luxury Automotive ManufacturerMABM Multi-Agent Based ModellingSCM Supply Chain ManagementSCM2 Simulation conceptual modelling methodology for supply chain management applicationsSCOR Supply-Chain Operations Reference-modelSD Systems DynamicsSME Subject Matter ExpertSS Seat set manufacturerSSM Soft Systems MethodologyT Tracks manufacturer 5
  6. 6. PublicationsDuring the period of conducting this research the following publications have been contributedto:Albores, P., Love, D., Weaver, M., Stone, J. & Benton, H. (2006) An evaluation of SCOR modellingtools and techniques. Technology and Global Integration. IN: Proceedings of the Second EuropeanConference on the Management of Technology. Aston Business School, Birmingham, UK.Taylor, G. D., Love, D. M., Weaver, M. W. & Stone, J. (2008) Determining inventory service supportlevels in multi-national companies, International Journal of Production Economics, 116(1), 1-11.Niranjan, T., Weaver, M., (2010) A unifying view of goods and services supply chain management,The Service Industries Journal, iFirst Article, 1–20.Niranjan, T., Weaver, M., Pillai, S., (2009) Bridging between goods and services SCM: Some freshperspectives. Green Management Matters. IN: Proceedings of the Academy of ManagementAnnual Meeting. Chicago, Illinois, USAWeaver, M., Love, D. & Albores, P. (2008) Supply chain improvement options and their decisionvariables. Tradition and Innovation in Operations Management. IN: 15th Annual EurOMAConference of the European Association of Operations Management. University of Gronigen,Netherlands.Weaver, M., Love, D. & Albores, P. (2007a) A decision aid to select techniques to evaluate supplychain improvement options. Managing Operations in an Expanding Europe. IN: 14th AnnualConference of the European Association of Operations Management. Bilkent University, Ankara,Turkey.Weaver, M., Love, D. & Albores, P. (2006) Towards the development of a supply strategyevaluation methodology. Moving Up the Value Chain. IN: Conference of the European Associationof Operations Management. Strathclyde University, Scotland, UK. 6
  7. 7. Table of ContentsThesis summary ................................................................................................................................. 2 Keywords ......................................................................................................................................... 2 Acknowledgements ......................................................................................................................... 4 Notations used in thesis .................................................................................................................. 5 Publications ..................................................................................................................................... 6 List of figures in thesis................................................................................................................... 11 List of tables in thesis .................................................................................................................... 12Chapter 1 Introduction ................................................................................................................. 14 1.1 Research background ........................................................................................................ 14 1.2 Research aims, objectives and programme ...................................................................... 16 1.3 Justification for the research focus ................................................................................... 18 1.4 Outline of the thesis .......................................................................................................... 19 1.5 Delimitation of scope and definitions ............................................................................... 22 1.6 Chapter summary .............................................................................................................. 24Chapter 2 Research issues in conceptual modelling for SCM applications .................................. 26 2.1 Scope and selection of contributions in literature review ................................................ 27 2.2 Importance of evaluating supply chain problems............................................................. 29 2.3 Complexity of evaluating supply chain problems ............................................................. 31 2.4 Role of simulation to evaluate supply chain problems ..................................................... 32 2.4.1 Range of approaches used in simulation ................................................................. 33 2.4.2 Extent and usage of simulation for research ........................................................... 34 2.5 Role of conceptual modelling in simulation projects........................................................ 37 2.5.1 Importance of conceptual modelling in a simulation project .................................. 38 2.5.2 Key debates around the nature of conceptual modelling ....................................... 38 2.5.3 Defining conceptual modelling for supply chain problems ..................................... 40 2.6 Understanding of CM for SCM simulation applications .................................................... 43 2.6.1 General issues in understanding of conceptual modelling ...................................... 43 2.6.2 Application of the process of conceptual modelling for SCM problems ................. 45 2.7 Usefulness of a CM methodology for SCM applications ................................................... 46 2.8 Benefits of developing a conceptual modelling methodology for SCM applications ....... 48 2.9 Chapter summary .............................................................................................................. 49Chapter 3 Research programme for the development and preliminary validation of the SCM2 . 50 3.1 Justification of methodological approach ......................................................................... 50 3.1.1 Methodological approaches for the development of methodologies ..................... 51 3.1.2 Key methodological issues in the area of developing a methodology..................... 52 3.1.3 General methodological issues for developing the SCM2 ........................................ 53 3.1.4 Justification of five stage approach.......................................................................... 61 3.2 Research programme and methods.................................................................................. 64 3.2.1 Overview of research programme and methods ..................................................... 64 3.2.2 Stage I: Review of existing conceptual modelling practice ...................................... 65 3.2.3 Stage II: Forming the specification for SCM2............................................................ 67 3.2.4 Stage III: Discussion of the outline design for the SCM2 .......................................... 68 3.2.5 Stage IV: Discussion of the detailed and refined design of the SCM2 ...................... 70 3.2.6 Stage V: Preliminary validation of the SCM2 ............................................................ 71 3.3 Theory building through existing case study applications ................................................ 73 3.3.1 Involvement and reflexivity of the researcher ......................................................... 74 3.3.2 Consistency of the process....................................................................................... 74 3.3.3 Choice of supply chain application cases ................................................................. 75 3.3.4 Data collection methods .......................................................................................... 76 3.4 Limitations of research approach ..................................................................................... 77 3.5 Validity and reliability of the research .............................................................................. 78 7
  8. 8. 3.6 Ethical considerations and issues...................................................................................... 78 3.7 Chapter summary .............................................................................................................. 79Chapter 4 Review of existing CM (Stage I) .................................................................................... 80 4.1 Approaches to conceptual modelling in practice ............................................................. 80 4.1.1 Principles in conceptual modelling .......................................................................... 81 4.1.2 Methods of simplification ........................................................................................ 82 4.1.3 Modelling frameworks ............................................................................................. 85 4.2 Problems encountered in simulation modelling ............................................................... 86 4.3 Communicating and representing the conceptual model ................................................ 87 4.3.1 Simulation project specification............................................................................... 88 4.3.2 Representing the conceptual model ........................................................................ 89 4.4 Validation of conceptual models ...................................................................................... 91 4.5 Chapter summary .............................................................................................................. 94Chapter 5 Forming the specification for the SCM2 (Stage II) ........................................................ 95 5.1 Requirements for an ‘effective’ conceptual model .......................................................... 95 5.1.1 Four requirements of a conceptual model .............................................................. 96 5.1.2 Building ‘valid’ and ‘credible’ models ...................................................................... 97 5.1.3 Fundamental need to keep the model ‘simple’ ....................................................... 98 5.2 Requirements for ‘good’ methodologies .......................................................................... 98 5.3 Requirements for conceptual modelling of supply chain problems ............................... 100 5.3.1 Handle the complexity and detail of supply chain improvements ........................ 101 5.3.2 Address a range of supply chain objectives ........................................................... 105 5.3.3 Identify interconnections with the supply setting ................................................. 106 5.4 Chapter summary ............................................................................................................ 106Chapter 6 Outline design for the SCM2 (Stage III) ....................................................................... 108 6.1 Design issues for developing a ‘good’ methodology ...................................................... 109 6.1.1 General guide for conceptual modelling................................................................ 109 6.1.2 Role of participants in the process of conceptual modelling ................................. 111 6.1.3 Points of entry in the methodology ....................................................................... 112 6.2 Design issues for creating an ‘effective’ conceptual model............................................ 113 6.2.1 Keep the model as ‘simple’ as possible.................................................................. 113 6.2.2 Creating a ‘valid’ and ‘credible’ conceptual model ................................................ 115 6.3 Design issues for the domain specific needs for creating a CM...................................... 117 6.3.1 Opportunities to use a process reference model for creating a CM ..................... 117 6.3.2 Identification of a suitable process reference model for creating a CM ............... 118 6.4 Using SCOR for conceptual modelling............................................................................. 121 6.4.1 Using SCOR to describe supply chain improvements ............................................ 122 6.4.2 Using SCOR to describe supply chain objectives .................................................... 122 6.4.3 Using SCOR to determine the interconnections with the supply setting .............. 124 6.5 Presentation of outline design ........................................................................................ 125 6.5.1 Key concepts to be incorporated into the methodology ....................................... 125 6.5.2 Linking key concepts to phases in the SCM2 .......................................................... 128 6.6 Chapter summary ............................................................................................................ 130Chapter 7 Detailed design for SCM2 (Stage IV) ........................................................................... 132 7.1 Overview of the SCM2 ..................................................................................................... 132 7.2 Presentation of the development cases ......................................................................... 136 7.2.1 Development case 1: BeerCo ................................................................................. 136 7.2.2 Development case 2: CarCo ................................................................................... 137 7.3 Application of the development cases to refine and detail the SCM2 ............................ 138 7.3.1 Phase 1: Describe the supply problem from the client’s perspective ................... 139 7.3.2 Phase 2: Determine how each objective is to be measured .................................. 144 7.3.3 Phase 3: Determine how each improvement is to be represented ....................... 150 8
  9. 9. 7.3.4 Phase 4: Determine how the inputs and their sources interconnect .................... 153 7.3.5 Phase 5: Formulation of the model boundary ....................................................... 157 7.3.6 Phase 6: Design of the detail of the model ............................................................ 166 7.3.7 Phase 7: Validate and document the conceptual model ....................................... 172 7.4 Implementing the SCM2 using a spreadsheet application ............................................. 177 7.5 Alignment of detailed design of the SCM2 against specification..................................... 177 7.5.1 Meet the requirements for an ‘effective’ conceptual model ................................ 178 7.5.2 Meet the requirements of ‘good’ methodologies ................................................. 179 7.5.3 Meet the requirements for conceptual modelling of supply chain problems ....... 181 7.6 Chapter summary ............................................................................................................ 182Chapter 8 Preliminary validation of the SCM2 (Stage V) ............................................................. 184 8.1 Presentation of validation case: CoffeePotCO ................................................................ 184 8.2 Application of SCM2 to preliminary validation case ........................................................ 185 8.2.1 Phase one: Describe the supply problem............................................................... 186 8.2.2 Phase two: Determine how each objective is to be measured ............................. 187 8.2.3 Phase three: Determine how each improvement is to be represented ................ 189 8.2.4 Phase four: Determine the model inputs and source process elements ............... 190 8.2.5 Phase five: Formulate the model boundary .......................................................... 191 8.2.6 Phase six: Designing the model detail .................................................................... 194 8.3 Purpose of the evaluation of the methodology .............................................................. 195 8.3.1 Criteria for evaluating the feasibility of the SCM2 ................................................. 195 8.3.2 Criteria for evaluating the utility of the SCM2 ........................................................ 196 8.4 Evaluation of the initial feasibility of the SCM2............................................................... 196 8.4.1 Evaluation of the availability of information required by the SCM2 ...................... 197 8.4.2 Evaluation of the availability of information provided by the SCM2 ..................... 198 8.5 Evaluation of the initial utility of the SCM2 ..................................................................... 199 8.5.1 Relevance of output derived from the SCM2 ......................................................... 200 8.5.2 Usefulness of the output derived from the SCM2 .................................................. 200 8.5.3 How the methodology could be facilitated............................................................ 202 8.6 Identification of issues for testing................................................................................... 204 8.6.1 Feasibility ............................................................................................................... 204 8.6.2 Utility ...................................................................................................................... 204 8.6.3 Usability.................................................................................................................. 205 8.7 Opportunities to improve the SCM2................................................................................ 206 8.7.1 Role and impact of automating the methodology ................................................. 206 8.7.2 Strengthening the utilisation of domain knowledge ............................................. 207 8.7.3 Development of a web based tool ......................................................................... 208 8.8 Chapter summary ............................................................................................................ 208Chapter 9 Conclusion and future work ....................................................................................... 210 9.1 Original contribution made by the thesis ....................................................................... 210 9.1.1 Primary research contribution ............................................................................... 211 9.1.2 Secondary research contributions ......................................................................... 217 9.2 Conclusions from the research objectives and questions .............................................. 219 9.2.1 Objective one: Documentation of required specification...................................... 219 9.2.2 Objective two: Development of SCM2 addressing the specification ..................... 220 9.2.3 Objective three: Preliminary validation of the SCM2 ............................................. 221 9.3 Limitations of study ........................................................................................................ 222 9.3.1 Application in different industrial contexts with primary data.............................. 224 9.3.2 Use of different facilitators (potential users) to follow the SCM2 ......................... 224 9.3.3 Validation of the usability of the SCM2 .................................................................. 225 9.4 Implication for further research and practice ................................................................ 225 9.5 Chapter summary ............................................................................................................ 227 9
  10. 10. References................................................................................................................................... 229Appendix A Principles/observations made in the design of the SCM2 ...................................... 251Appendix B Actual practice to be modelled (BeerCO development case) ................................ 260Appendix C Actual practice to be modelled (CarCO development case) .................................. 263Appendix D Illustrations of model components to be developed into a computer model....... 266Appendix E Example process flow diagrams for the BeerCo development case ...................... 268Appendix F Flowchart of the CoffeePotCo computer simulation model .................................. 270Appendix G Comparison of practice to be modelled and CoffeePotCo computer model ........ 271Appendix H Evaluation of how information is used and provided in the preliminary validationcase ................................................................................................................................ 275Appendix I Issues for testing the ‘usability’ of the SCM2 ......................................................... 277 10
  11. 11. List of figures in thesisFigure 1.1 Overview of the thesis structure and research programme .................................... 20Figure 2.1 Classification of supply chain simulation approaches.............................................. 34Figure 3.1 Overview of research programme ........................................................................... 64Figure 6.1 Example of SCOR inputs and outputs to a decomposed business process............ 124Figure 7.1 Overview of the SCM2 ............................................................................................ 133Figure 7.2 Structure and flows in the BeerCo development case........................................... 137Figure 7.3 A simplified diagram of CarCo’s supply chain ........................................................ 138Figure 7.4 ‘Reliability’ metric structure with an example of a level 3 metric ......................... 147Figure 7.5 Calculation and data collection needs for RL.2.1 % of orders delivered in full ..... 148Figure 7.6 Extract of the SCOR descriptions of best practices ................................................ 151Figure 7.7 Example of the inputs of a source process element described in SCOR ................ 154Figure 7.8 Process elements, inputs, source process element and suggested source actor .. 155Figure 7.9 Extract of the list of inputs considered for S1.1 in the CarCo development case . 156Figure 7.10 Extract of how phase four was completed for the CarCo development case ....... 157Figure 7.11 Extract of the output from phase four that is transferred (in step 5.1) ................ 160Figure 7.12 Extract of phase five from the BeerCo development case for the Wholesaler ..... 163Figure 7.13 Template used to check the linkages between processes in the CarCo development case......................................................................................................................... 165Figure 7.14 Tracing back the inputs of included processes from a data source ....................... 166Figure 7.15 ‘Phantoms’ in the CarCo development case (inputs shown for D1.10 SS) ............ 168Figure 7.16 Extract of actual practice descriptions in the BeerCo development case ............. 169Figure 7.17 Extract of how actual practices can be ‘consolidated’ for the CarCo development case......................................................................................................................... 170Figure 8.1 Graphical illustration of CoffeePotCo supply problem .......................................... 185Figure 8.2 Interconnection identified for each process element in the model ...................... 190Figure 8.3 Formulation of the model boundary (CoffeePotCo) .............................................. 191Figure 8.4 Promoted, core and simplified process elements for the CoffeePotCo validation case......................................................................................................................... 194Figure E.1 Retailer plan and place order in BeerCo development case .................................. 268Figure E.2 Fulfil order in BeerCo development case ............................................................... 269Figure F.1 Flowchart of computer simulation program for CoffeePotCo ............................... 270 11
  12. 12. List of tables in thesisTable 2.1 Selection of contributions that meet search terms in each academic database ......... 29Table 2.2 Classification of simulation approaches....................................................................... 35Table 3.13 Similarities between an iterative triangulation and grounded theory method .......... 61Table 3.24 Design questions and issues to address the requirements ......................................... 71Table 3.3 5 Criteria for assessing a process framework or methodology ...................................... 73Table 3.4 6 Summary of cases used to develop and validate the methodology............................ 76Table 4.17 Approaches to conceptual modelling .......................................................................... 81Table 4.28 Research contributions on simulation model simplification (advice and methods) ... 84Table 4.39 Potential pitfalls in simulation related to conceptual modelling ................................ 86Table 4.410 Reasons for increasing complexity (some consideration in the SCM domain) ............ 87Table 4.511 Methods used to document CM with examples in the SCM literature ....................... 90Table 5.1 Four requirements for a conceptual model ................................................................. 96Table 5.2 Platts (1994) characteristics of successful strategy formulation methodologies ...... 100Table 5.3 Identification of the complexity of a supply problem ................................................ 103Table 5.4 Identification of the detail of supply chain improvements ........................................ 104Table 5.5 Aims and requirements for the SCM2 ........................................................................ 106Table 6.1 Proposed stages for conceptual modelling in general suggested in the literature ... 110Table 6.2 Incorporating model simplification advice and methods into a methodology .......... 114Table 6.3 Documentation and validation requirements for the SCM2 ...................................... 116Table 6.4 Role of domain knowledge in conceptual modelling ................................................. 117Table 6.5 Comparison of supply chain process reference models ............................................ 120Table 6.6 Domain knowledge offered by SCC SCOR model ....................................................... 121Table 6.7 Examples of two typical supply chain problems ........................................................ 122Table 6.8 Example of SCOR detail extracted for improvements ............................................... 122Table 6.9 Example of extracting SCOR performance measures ................................................ 123Table 6.10 Key concepts to be included in the design of the SCM2 ............................................ 126Table 6.11 Linking key concepts, conceptual modelling process with phases in the SCM2 ........ 128Table 6.12 Outline of the methodology: Phases, inputs and outputs......................................... 130Table 7.1 Detailed steps for phase one of the SCM2 ................................................................. 140Table 7.2 Description of the objective(s) of study ..................................................................... 141Table 7.3 Illustration of the description of the improvements selected ................................... 142Table 7.4 Illustration of the description of the supply problem setting .................................... 143Table 7.5 Illustration of how each improvement could achieve each objective ....................... 143Table 7.6 Detailed steps for phase two of the SCM2 ................................................................. 146Table 7.7 Description of the supply chain metrics..................................................................... 147Table 7.8 Description of calculation and data source requirements for each metric ............... 149Table 7.9 Description of the nature of measurement for each metric in both development cases .................................................................................................................................... 149Table 7.10 Detailed steps for phase three of business methodology ......................................... 150Table 7.11 List of processes at three levels of process detail that represent each SCIO ............ 152Table 7.12 List of actors associated with each business process ................................................ 152Table 7.13 Detailed steps for Phase 4 of the SCM2 ..................................................................... 154Table 7.14 Detailed steps for phase 5 of the SCM2 ..................................................................... 159Table 7.15 Detailed steps for phase 6 of the SCM2 ..................................................................... 167Table 7.16 Model components, definitions and examples (in the BeerCo development case) . 171Table 7.17 Detailed steps for phase 7 of the SCM2 ..................................................................... 174Table 7.18 Aligning the SCM2 to meet the requirements for an ‘effective’ model ..................... 178Table 7.19 Meet the requirements of ‘good’ methodologies ..................................................... 180Table 7.20 Meet the requirements for CM of supply chain problems........................................ 181Table 8.1 Statement of the supply problem (CoffeePotCo) ...................................................... 186Table 8.2 Statement of each objective to be measured (CoffeePotCo) .................................... 188 12
  13. 13. Table 8.3 Statement of how each process represents each improvement (CoffeePotCo) ....... 189Table 8.4 Promoted process elements and simplified inputs (CoffeePotCo) ............................ 192Table 8.5 Candidate process elements promoted in each round (CoffeePotCo)....................... 193Table 8.6 Summary of the feasibility criteria to be examined ................................................... 195Table 8.7 Summary of the utility criteria to be examined ......................................................... 196Table 8.8 Key observations from an analysis of the information requirements for the SCM2 .. 198Table 8.9 Key observations from an analysis of the information provided from the SCM2 ...... 199Table 8.10 Evaluation of ‘facilitation’ when using SCOR ............................................................. 203Table 8.11 Summary of the usability criteria to be examined .................................................... 205Table 8.12 Opportunities to automate aspects of the SCM2 ...................................................... 207Table 9.1 Research contribution made by this thesis................................................................ 211Table 9.2 SCM2: Procedure and key concepts for SCM applications ......................................... 214Table 9.3 Summary of issues for future testing ......................................................................... 223Table 9.4 Revisiting Robinson (2006a; 2006b) issues in CM ..................................................... 226Table A.1 Principle/observations when designing phase one ................................................... 251Table A.2 Principle/observations made that included the design of phase two ....................... 252Table A.3 Principle/observations made that influenced the design of phase three ................. 253Table A.4 Principle/observations made that influenced the design of phase four ................... 254Table A.5 Principle/observations when designing phase five .................................................... 255Table A.6 Principle/observations when designing phase six ..................................................... 257Table A.7 Principle/observations when designing phase seven ................................................ 258Table D.1 Model components for ‘Retailer plan and place order’ (BeerCo development case) 266Table D.2 Model components for ‘Wholesaler Receive and fulfil order’ (BeerCo developmentcase) .................................................................................................................................... 267Table G.1 AS-IS Scenario in CoffeePot Co validation case for the ‘Customer’ ........................... 271Table G.2 AS-IS Scenario in CoffeePotCo validation case for the ‘Warehouse’ ......................... 272Table G.3 AS-IS Scenario in CoffeePotCo validation case for the ‘Factory’ ................................ 273Table G.4 TO-BE Scenario in CoffeePotCo validation case for the ‘Factory’ .............................. 274Table H.1 Evaluation of how the SCM2 uses information........................................................... 275Table I.1 Issues for testing the ‘usability’ of the SCM2 ............................................................. 277 13
  14. 14. Chapter 1 IntroductionChapter one discusses the context of the research project for the development, refinement andpreliminary validation of a simulation conceptual modelling methodology for supply chainmanagement applications (termed the ‘SCM2’). It describes the background to the research,research objectives, questions and programme to address each objective, justification forresearch focus, main body of the thesis, and the extent of the scope and definitions used in theresearch project.The research is bounded within the ‘simulation’ literature with a focus on the ‘conceptualmodelling’ stage of a simulation project in the context of ‘SCM’ applications. The researchobjectives and questions address the need to form a specification for, develop and refine andinitially validate the feasibility and utility of the SCM2 proposed in this thesis. A five stage researchprogramme is designed to realise the aims and objectives of this research and address each of thequestions posed. This includes reviewing existing conceptual modelling practices (stage I,presented in chapter four), forming the specification for the SCM2 (stage II, presented in chapterfive), outlining the design for the SCM2 (stage III, presented in chapter six), detailing and refiningthe design for the SCM2 (stage IV, presented in chapter seven) and a preliminary validation of theSCM2 (stage V, presented in chapter 8). The research programme adopts an iterativetriangulation method to systematically iterate between extensive literature review, existing caseevidence and intuition. Three typical and complex supply problems are used to refine andpreliminarily validate the methodology.1.1 Research backgroundThe research focuses upon the creation of simulation conceptual models for supply chainapplications. The methodology is developed within the supply chain management discipline forparticipants undertaking the conceptual modelling stage as part of a simulation project. Thisfocus is original and significant because the need for a greater understanding of conceptualmodelling is required; particularly the development of structured approaches, as no simulationconceptual modelling methodologies exists in the SCM domain. Both the wider discipline and theparticular focus of this thesis are briefly discussed to provide some background to the project.The origins of the use of the term ‘supply chain management’ (SCM) can be traced back to theearly 1980s (Houlihan, 1987); over the last three decades the prominence and importance of thediscipline has grown at an escalating rate. During this period, similar terms such as ‘networksourcing’, ‘supply pipeline management’ and ‘value chain management’ have been subjects of 14
  15. 15. interest, for both theory and practice (Christopher, 2004; Hines, 1994; Lamming, 1996; Saunders,1995, 1998; Croom, Romano and Giannakis, 2000).There has also been some debate over whether supply chain management is itself adistinguishable discipline in its own right (e.g. Croom et al., 2000; Harland, Lamming, Walker,Phillips, Caldwell, Johnsen, Knight and Zheng, 2006). Harland et al., (2006) judged SCM to be anemerging discipline, providing evidence that existing research contributions lack quality oftheoretical development, discussion and coherence. In relation to practice, there is widespreadagreement that SCM is critical to organisational performance (e.g. Tan, Kannan and Hardfield,1999; Kannan and Tan, 2005; Li, Ragu-Nathan, B., Ragu-Nathan, T.S., and Subba-Roa, 2006).Additionally as a field of study, it has gained significant momentum, as new opportunities exist todevelop new theories, concepts and tools that could be applied in practice.Despite the popularity of the term ‘SCM’ both in academia and in practice there has beenconsiderable confusion as to its meaning (Mentzer, Dewitt, Keebler, Min, Nix, Smith and Zacharia,2001). Some authors have defined SCM in operational terms involving the flow of materials andproducts, some view it as a management philosophy and some view it in terms of a managementprocess (Tyndall, Gopal, Patsch and Kamauff 1998). Mentzer et al., (2001) reviewed, categorisedand synthesised a view of what constitutes SCM from definitions used in both research andpractice in order to reduce this ambiguity. Mentzer et al., (2001, pg. 4) contended that a supplychain can be defined as a set of three or more entities (organisations or individuals) directlyinvolved in the upstream and downstream flows of products, services, finances, and/orinformation from a source to a customer. This definition is similar to Christopher’s (2004)definition as it highlights the structure, linkages and flows in a supply chain. In relation toChristopher (2004) he also highlights how processes and activities ‘add value’ to a product andservice. From a strategic management perspective, ‘value’ concerns what Tan, Kannan andHanfield, (1998) describes as the utilisation of resources and capabilities to build competitiveadvantage. The term ‘supply strategy’ has also been suggested as a way to move SCM from apredominantly operational domain (relating to the flow of material and information) to one thatalso considers strategic aspects (Harland, Lamming and Cousins, 1999).Simulation has been used as a method to evaluate the complexity of supply chain problems (e.g.Ridall, Bennet and Tipi, 2000; Huang, Lau and Mak, 2003; Van der Zee and Van der Vorst, 2005). Itis regarded as the proper means for supporting decision making on supply chain design (Van derZee and Van der Vorst, 2005). One important component of a simulation modelling process is the 15
  16. 16. need to create a conceptual model. However it is the least understood aspect in the process(Law, 1991; Robinson, 2004a; 2004b, 2008a; 2008b). The need to formulate the problemprecisely has appeared in all descriptions of how to conduct a simulation project (e.g. Shannon,1975; Law and Kelton, 2000), although perhaps the first use of the term ‘model conceptualisation’can be found in Musselman (1994). After this period the term and discussions of conceptualmodelling practice have become more common (e.g. Robinson and Bhatia, 1995; Balci, 1997; Law,2003) and, more recently, some definitions have been offered (e.g. Banks, 1999; Robinson, 2004a;2004b; 2008a; 2008b).A simulation model in the context of evaluating supply chain problems can be defined using Pidd’s(1998) definition. A simulation model for SCM applications is a representation of the supplysystem, used to investigate possible improvements and the effect of these improvements in thereal world setting of the supply problem. The conceptual model is a non-software specificdescription of the simulation model to be developed (Robinson, 2004a; 2004b). It describes thesupply chain problem in terms of the objective of the study, improvements selected to improveperformance within its defined supply setting, the content of the model and any assumptions andsimplifications incorporated into the model. More specifically, using Banks’ (1991) terms, thecontent concerns the relationships between the components and structure of the supply system.These are described in terms of the scope (the components and relationships that need to beincluded in the model to define its structure) and detail necessary to represent the actualpractices to be modelled.1.2 Research aims, objectives and programmeThe aim of the research presented in this thesis is to: “Develop, refine and preliminarily validate a methodology that utilises domain- knowledge combined with a procedure that can be followed to create a simulation conceptual model for SCM applications”This aim is fulfilled by achieving three research objectives: 1. Objective One – Document a specification of the requirements for creating simulation conceptual models for SCM applications 2. Objective Two - Develop and refine a methodology that can meet the specification of the requirements for creating simulation conceptual models for SCM applications 3. Objective Three – Preliminarily validate the initial feasibility and utility of the methodology to create simulation conceptual models for SCM applications 16
  17. 17. A five stage research programme has been designed which contributes to the attainment of eachof the research objectives noted previously. An iterative triangulation method is justified toground theory development using existing case applications. This method is used to apply theSCM2 to typical and complex supply problems to firstly refine and secondly preliminarily validatethe procedure to be followed that incorporates the use of domain-knowledge. The processiterates between case evidence, reviewed literature and intuition to develop knowledge prior torigorous testing so that the SCM2 can be extended into a cohesive theory (testing is noted asfurther work).The first objective identifies a specification of the requirements for a simulation conceptualmodelling methodology for SCM applications. To achieve this two research questions are posed: 1. How are simulation conceptual models created in the context of supply chain applications? 2. What is the specification of a simulation conceptual modelling methodology for evaluating supply chain problems?These questions form the basis of stage I (Review of existing conceptual modelling practice,discussed in chapter four) and stage II (Required specification for the SCM2 to be developed,discussed in chapter five) of the research programme. A review of existing conceptual modellingpractice in the domain of SCM demonstrates the need for a methodology that can be followed forSCM applications. Following on from this, a specification is detailed for an effective conceptualmodel, characteristics of a good methodology, and the requirements for evaluating supply chainproblems.The second objective develops and refines a methodology that can meet the specification of therequirements for creating simulation conceptual models for SCM applications. To achieve thisobjective, one research question is posed: 3. Can a simulation conceptual modelling methodology be developed to meet the required specification?This question forms the basis for stage III (outline design for the methodology, discussed inchapter six) and stage IV (detailed and refined design for the SCM2, discussed in chapter seven) ofthe research methodological programme. The methodology is grounded in existing conceptualmodelling practice and ten key concepts are identified to be incorporated into a general processfor conceptual modelling. The methodology is refined through the application of two typical and 17
  18. 18. complex supply chain development cases before the revised design is aligned to show that itmeets the specification of the requirements.The third and final objective provides a preliminary validation of the initial feasibility and utility ofthe methodology to create simulation conceptual models for SCM applications. To achieve thisobjective, one research question is posed: 4. Can the methodology be followed (feasibility) and aid a user (utility) to create a simulation conceptual model for a SCM application?This question forms the final stage, stage V (preliminary validation of the SCM2, discussed inchapter eight) of the research methodological programme. This addresses two of Platts (1993)criteria for testing a methodology, process, or framework. It is argued that both the feasibilityand utility of the methodology can be initially validated by applying it to a different supply chainproblem. The validation case is a supply chain problem which has been evaluated by a simulationapproach and published in the academic literature (see Taylor, Love, Weaver and Stone, 2008). Itis used to compare the actual practices that have been identified by the methodology with themodel components and interconnections that are included in the computer model. The validationcase is also used to suggest how the feasibility and utility of the methodology should be furthertested and how further work should include tests for its ‘usability’. The discussion also identifiesand considers some opportunities to develop a web-based application tool to improve theaccessibility and efficiency of the methodology.1.3 Justification for the research focusEffective SCM is critical to any organisation’s ability to compete effectively (Stewart, 1997), whichhas led to organisation’s seeking ways to improve supply chain performance. The difficulty whenevaluating supply chain problems is that they are inherently complex and dynamic systems (e.g.Davis, 1993; Levy, 1994; Beamon, 1998). Simulation is one approach that is often cited as amethod that can be used to evaluate complex and dynamic systems (e.g. Ridall et al., 2000; Huanget al., 2003; Van der Zee and Van der Vorst, 2005); the extent of research that has used simulationas a method to evaluate supply chain problems is great.In a typical supply chain project there is one stage that is often regarded as the most important:the process of creating a conceptual model (Law, 1991). Robinson (2008b) points out that there issurprisingly very little written on the subject; except in Robinson’s (2004b) simulation text. Evenwhen looking at this text only a handful of pages are dedicated to the subject and in the widerliterature there is a distinct lack of research contributions. Research can be identified on 18
  19. 19. understanding the importance of ways of thinking of tackling a simulation problem (e.g. Nance,1994; Robinson, 1994; Brooks and Tobias, 1996). This has yet to deliver structured approaches forcreating a conceptual model. Although some guiding principles, methods for simplifications, andframeworks for completing the stage as part of a simulation project can be found. In an attemptto remedy this situation a stream was organised at the Operational Research Society SimulationWorkshop in 2006. Robinson (2008b) noted that this stream represented the highest number ofconcentrations of papers on this topic in comparison to previous journals or conference papers.This was a major motivation for this research, particularly as the majority of work was at aconceptual (early) stage. In addition the majority of contributions was based on manufacturingproblems and had not explicitly addressed the needs of SCM.This thesis demonstrates that the complexity and dynamic behaviour inherent in supply chainspresents a different set of requirements. The problems are not confined to a single organisationand the improvements that an evaluator may wish to experiment with are much wider and, onthe whole, different from manufacturing problems. This thesis also suggests ten key conceptsthat could form the basis of a methodology for creating simulation conceptual models for SCMapplications. In particular, the research argues that there is a significant opportunity to utilisedomain knowledge from a published supply chain process reference model (e.g. Supply ChainCouncil SCOR model) aligned with a general process for conceptual modelling.The intention of the work is to enable relevant and significant advances for conceptual modellingas an area that requires further research, practice and the teaching of simulation. Themethodology requires further work to enable an application to be developed that incorporatesthe methodology, made accessible for potential users to benefit from. In addition to this primarycontribution a number of secondary contributions are suggested that should provide avenues forfurther study and advancement.1.4 Outline of the thesisThe thesis is organised into nine chapters and four main parts, as depicted in figure 1.1. Theseparts include the introduction, development of the research aim, objectives and programme,research programme implementation and conclusions. 19
  20. 20. Introduction • Chapter 1: Introduction to research project Development • Chapter 2: Research issues in simulation of research conceptual modelling for SCM applications aim, objectives • Chapter 3: Research programme for and developing, refining and preliminary programme validating the SCM2 • Chapter 4: Stage I: Review of existing simulation conceptual modelling practice • Chapter 5: Stage II: Forming the specification for the SCM 2 • Chapter 6: Stage III: Outline Research design for the SCM2 programme • Chapter 7: Stage IV: Detailed implementation and refined design for the SCM2 • Chapter 8: Stage V: Preliminary validation of the initial feasibility and utility of the SCM2 • Chapter 9: Conclusions and future Conclusion implications of the researchFigure 1.1 Overview of the thesis structure and research programmeThe contribution of the remaining chapters in this thesis can be summarised:Chapter 2 Discusses the research issues in simulation conceptual modelling for SCM applications. It demonstrates that there is a gap for the development of the SCM2 and that is both original and significant. The importance of evaluating supply chain problems to improve organisational performance is discussed. This is followed by highlighting the complexity of evaluating supply problems. Simulation is argued as one major approach that can address the complexity of supply chain problems. An aspect of a simulation project that is not well understood but is of crucial importance is the process of conceptual modelling. There are no guidelines available to follow in order to create a conceptual model for SCM applications, therefore the development of a methodology is argued as a way to address this need. The benefits to both research and practice are identified. 20
  21. 21. Chapter 3 Presents an overview of the research programme and methods to address the aim and objectives of the research project. The stages that should be included in the programme are justified and suitable methods are identified for each stage.Chapter 4 Presents the implementation of stage I of the research programme by reviewing existing simulation conceptual modelling practice in the context of SCM applications. The chapter establishes the need for the methodology. Approaches to conceptual modelling are identified and reviewed to show that no methodology exists that delivers the aim of this research. It also discusses the problems encountered in a simulation project that could benefit from a greater understanding and structured methods for conceptual modelling. The methods of communicating and representing the conceptual model and how conceptual models have been validated are identified as two aspects that warrant greater discussion.Chapter 5 Presents the implementation of stage II of the research programme by forming a specification for the SCM2. The methodology is founded upon existing conceptual modelling practice and the requirements for, an effective conceptual model, a good methodology and for conceptual modelling within the domain of SCM. The specification is detailed so that the methodology can be developed to meet the requirements.Chapter 6 Presents the implementation of stage III of the research programme by outlining a design for the SCM2. The chapter brings together and suggests ten key concepts from a review of the design issues for each of the requirements identified in chapter five. The proposition developed in the chapter is that a procedure for the SCM2 can utilise domain knowledge from a supply chain process operations model to enable a more focused and efficient process.Chapter 7 Presents the implementation of stage IV of the research programme by detailing a developed and refined design for the SCM2. Two typical and representative supply chain development cases are used to refine the methodology. The ten key concepts identified in chapter six are incorporated into a procedure for the methodology. Each of the phases is discussed in turn so that the specific steps, information needs, participation requirements and points of entry can be 21
  22. 22. detailed. The chapter concludes by aligning the detailed design to demonstrate that the specification presented in chapter five has been met.Chapter 8 Presents the implementation of stage V of the research programme by preliminarily validating the initial feasibility and utility of the SCM2 to a different supply chain problem. The validation case is used to walkthrough the steps to demonstrate that they can be followed to create a simulation conceptual model. The validation only considers the phases up to the point that the actual practices to be included in the model are detailed, after this point existing modelling practice is adopted. It also enables a comparison between a successful computer model, which has been published in the literature, to be compared to a list of actual practices identified by the methodology. Issues for future testing are discussed and an opportunity to simplify and automate aspects of the process in a tool that utilises published domain knowledge is considered.Chapter 9 Concludes the thesis and discusses the future implications for the research. It details the primary and secondary contributions made by this thesis. The research aim and objective is reviewed to demonstrate that they have been met and that the research programme was both suitable and rigorous. Limitations of the work are described and implications for further study are identified.1.5 Delimitation of scope and definitionsThe research focuses upon the creation of simulation conceptual models for supply chainapplications rather than conceptual modelling in general. The implication of this is that themethodology presented in this thesis is intended for participants who are undertaking asimulation project with a supply chain problem. The analysis and information provided by themethodology would be different in other domains (e.g. manufacturing, service). Nevertheless,outside this scope the research has many implications for the key concepts incorporated into themethodology that could be applied in other domains (e.g. how to formulate the model boundary).Within this scope there are a number of considerations that need to be raised: 1. Definition of a supply problem 2. What constitutes a simulation conceptual model for SCM applications 3. Limitations of the research programme 22
  23. 23. The term ‘supply problem’ is used to incorporate the improvements that have been selected toimprove performance for a given objective within the setting of the supply problem. This term isused as it identifies that a supply problem can be made up of a range of improvements (e.g.improve supply chain visibility), to achieve a range of supply chain performance measures (e.g.responsiveness, cost) within the setting of the supply problem (e.g. linkages between suppliersand customers). In relation to the latter, conceptual modelling involves formulating anunderstanding of what should be included within the simulation study. This presents an issue ofdetermining only the necessary model components and interconnections that represent theactual practices of the real world problem. The term should not be confused with the term supply“chain”, or even “network”. A supply chain/network has a specific definition which includes the‘entities directly involved in the upstream and downstream flows of products, services, finances,and/or information from a source to the customer’ (Mentzer et al., 2001, pg. 4). Thisdemonstrates that the term ‘supply problem’ defines more than the structure and flows in asupply system but also how it is to be improved and how performance will be measured.The research is bounded within the ‘simulation’ literature with a focus on the ‘conceptualmodelling’ stage of a simulation project. Definitions do exist for conceptual modelling in generalbut there is considerable debate into what is described by a simulation conceptual model(discussed in section 2.1). The majority of the work in this thesis is underpinned by the majoradvances made by Robinson, most notably in his 2004 text on ‘simulation practice andapplication’ and associated publications. These have considered effective conceptual modelling(Robinson, 1994) issues for conceptual modelling research and practice (2006a; 2006b; 2008a)and the development of a general framework (Robinson, 2004a; 2004b; 2006a; 2006b) which hasuntil recently been illustrated (Robinson, 2008b). Robinson’s definition for a conceptual model isadopted in this thesis and used to further a definition for what constitutes a methodology thatcan be followed to create a conceptual model for SCM applications.A conceptual model is defined as: ‘...a non-software specific description of the simulation model that is to be developed, describing the objectives, inputs, outputs, content, assumptions and simplifications of the model’ Robinson (2004b, pg. 65)In the context of this thesis the methodology delivers: ‘A methodology that offers a prescribed procedure that guides the participants undertaking the conceptual modelling stage of a simulation project, to create a non- software specific description of the simulation model to be developed, in the context of SCM applications’ 23
  24. 24. The definitions provide some useful distinctions that have shaped this research project. Thisincludes that the definitions view the process of conceptual modelling as independent fromparticular simulation software. The intention of this research is to not be biased by any particularsoftware used by the researcher. However, when describing the model components a modellermay have a particular simulation worldview (Pidd, 2004b; Owen, Love and Albores, 2008) whichwill have a bearing on the way in which the computer model to be developed is described. Forthis reason the methodology incorporates general terms and practice for describing thecomponents in the model. The implication of this is that only the original aspects of themethodology are applied and tested.The preliminary validation is used to illustrate the initial feasibility and the utility of themethodology. The actual practices to be included in the computer model are compared to thecomponents and interconnections that form the design of the computer model presented inTaylor et al., (2008). The supply problem evaluated in Taylor et al., (2008) is simulated using adiscrete-event simulation approach. The research notes to be able to generalise the feasibilityand utility of the methodology it would require further applications in different industrial contextsand with actual participants. This would also involve testing the general usability of themethodology.1.6 Chapter summaryThe aim of this research is to develop, refine and preliminarily validate the initial feasibility andutility of a simulation conceptual modelling methodology for SCM applications. The researchobjectives are designed to realise this aim. These include: Documenting a specification of the requirements for creating simulation conceptual models for SCM applications Developing and refining a design of the methodology that meets the specification Validating the initial feasibility and utility of the methodology.The research focuses on creating conceptual models that describe how a supply problem can bedescribed so that a computer model can be developed. This is identified as an original andsignificant area for research as no methodologies exist that can meet the research aim.Particularly there is a need to develop structured approaches that can guide participants throughthe process of conceptual modelling as part of a simulation project within the domain of SCM. 24
  25. 25. A five stage programme has been designed to achieve the aim and objectives set out in this thesis.This includes a review of existing conceptual modelling practice (stage I, implemented in chapter4), forming the specification for the SCM2 (stage II, implemented in chapter 5), outlining a designfor the SCM2 (stage III, implemented in chapter 6), detailing and refining the design of the SCM2(stage IV, implemented in chapter 7) and a preliminary test of the SCM2 (stage V, implemented inchapter 8). An iterative triangulation research approach is adopted to iterate between anextensive literature review, application of the methodology to three representative and typicalsupply chain problems and intuition. Two existing cases are used in the design and refinementstages, and one to illustrate the initial feasibility and utility of the methodology.The methodology is developed for the purpose of creating a conceptual model for supply chainapplications, not for general purposes. The preliminary validation is used to illustrate that theactual practices to be represented in the computer model can be derived by following the steps aslaid down in the methodology. The components and relationships between them, that form thedescription of the computer model developed in Taylor et al., (2008) are compared to the actualpractices described by following the methodology to discuss any similarities, omissions orsignificant differences. Future testing is outlined in this thesis to improve the validity and widerapplicability of the methodology in different applications and involvement of potential users. 25
  26. 26. Chapter 2 Research issues in conceptual modelling for SCMapplicationsThis chapter identifies and discusses the relevant research issues in conceptual modelling for SCMapplications. The aim is to demonstrate that a gap exists for a simulation conceptual modellingmethodology for SCM applications that is original and significant. This gap is filled by developingand preliminary validating a simulation conceptual modelling methodology for SCM applications.This chapter is structured to demonstrate this gap by considering the following research issues: Scope and selection of contributions in literature review (section 2.1) – States that the research is bounded within the simulation conceptual modeling literature with a particular focus on SCM applications Importance of evaluating supply chain problems (section 2.2) - Discusses the importance of evaluating supply problems as one significant way to improve performance Complexity of evaluating supply chain problems (section 2.3) – Demonstrates that evaluating supply chain problems is extremely complex Role of simulation to evaluate supply problems (section 2.4) – Identifies that simulation is one approach that can address the complexity of supply problems. The range of approaches used in simulation is overwhelming and the amount of research using simulation is great. Role of conceptual modelling in simulation projects (section 2.5) - Identifying that conceptual modelling is an important and critical aspect in a simulation modelling process. Understanding of conceptual modelling for SCM applications (section 2.6) - Demonstrating that conceptual modelling is the least understood aspect of a simulation project and no guidelines exist for SCM applications. A gap exists in the literature that can be filled by the aim and focus of this thesis. Usefulness of a conceptual modelling methodology for SCM applications (section 2.7) - Proposes that a methodology would be a useful way to guide participants through a complex supply problem to describe how it could be modelled Benefits of developing a conceptual modelling methodology for SCM applications (section 2.8) - Showing that a methodology would yield benefits to practitioner users 26
  27. 27. 2.1 Scope and selection of contributions in literature reviewThe scope of the literature review gathers contributions on ‘conceptual modelling’ for ‘simulation’purposes within the domain of ‘SCM applications’. The term ‘conceptual modelling’ has howeverbeen used much more widely in the general management literature. In general a conceptualmodel is a ‘set of concepts, with or without propositions, used to represent or describe (but notexplain) an event, object, or process’ (Meredith, 1993). The description is also used as a means ofcommunicating a set of requirements between stakeholders involved in a project. Using thisgeneral definition there are a number of application areas that have used the term ‘conceptualmodelling’; examples include: Architecture, engineering and construction – e.g. Krause, Luddeman and Striepe (1995) for industrial design; Turk (2001) on conceptual product modeling; Shane (2005) on conceptual modeling in urban design and city theory Business management – e.g. Carrol (1979) for conceptual modeling of corporate performance and Parasuraman (1985) describe a conceptual model of service quality Computing and web engineering – e.g. Thompson (1991) personal computer utilisation Information systems development – e.g. Olive (2007) for conceptual modelling of information systems; Mendes et al., (2006) for conceptual modelling of web applications and Schewe and Thalheim (2005) for conceptual modelling of web information systems Research methods – e.g. Meredith (1993) discuss theory building through conceptual methods; Hair et al., (2007) discuss conceptualisation and research design in general.There are three notable differences that distinguish ‘simulation conceptual modelling’ from theapplication areas noted above. This includes the domain to be represented, scope and level ofabstraction and the process to be followed to create a conceptual model. For instance, anarchitectural conceptual model could include a model replica of a bridge to a particular scale. Insimulation conceptual modeling the requirement is to describe the computer model to be built.This includes the inputs, outputs, content (involves determining the scope and level of detail),assumptions and simplifications (Robinson, 2004). The process to identify these requirementsmoves from a problem situation, through model requirements to a definition of what is going tobe modeled and how it is to be done (Robinson, 2008a). A procedure for simulation conceptualmodeling must provide guidelines on how this is to be achieved, which is heavily dependent uponthe domain (e.g. supply chain) being represented.One particular approach that has been used in the context of simulation conceptual modelingincludes Checkland (1981) ‘soft system methodology’ (SSM) to determine the simulation study 27
  28. 28. objectives (see Kotiadis, 2007). SSM includes a stage for building a conceptual model to describeactivities and processes from a root definition (problem statement). In this instance, theconceptual model is represented as a rich picture that captures a human system of issues, actors,problems, processes, relationships, conflicts and motivations. Kotiadis (2007) argues that thestudy objectives are the most critical part of a simulation study which benefits from using SSM asa problem structuring method. This is however, only the first step of the process of creating asimulation conceptual model. SSM does not explicitly guide a modeller through the decisionsnecessary to determine the scope and level of detail (model content) or even incorporate anynecessary assumptions and simplifications into the model design (e.g. specific techniques such asaggregate model components).The literature review selection criterion has focused upon conceptual modelling for the purposesof simulation, particularly in the SCM domain using the terms shown in table 2.1. It was alsonecessary to include a wider search for operations management research as this is often used asan umbrella term. The key words ‘supply chain’ were adopted over ‘supply chain management’ toprovide a more exhaustive list. Secondly, more specific searches were undertaken to establish amore focused body of knowledge that discusses ‘conceptual modelling’. The term ‘conceptualmodel’ was also searched recognising that ‘conceptual modelling’ relates to the process thatcreates a ‘conceptual model’. The literature was searched in four primary academic databasesused in management research along with the WinterSim conference (annual simulationconference) and a dedicated Workshop that addressed a call for more research into simulationconceptual modelling (Operational Research Society Simulation Workshop, 2006). Theconference contributions accounted for some of the earlier and latest contributions on simulationconceptual modeling. 28
  29. 29. Table 2.1 Selection of contributions that meet search terms in each academic database Search terms Simulation Simulation Simulation Simulation Academic Simulation AND AND AND AND Simulation Simulation literature AND “conceptual “conceptual “Conceptual “Conceptual AND Supply AND database “conceptual modelling” modelling” model” AND model” AND chain Operation modelling”1 AND AND supply Operation “Supply chain” operation chainABI/Inform Global 499 226 11 0 1 9 1 Proquest EBSCO (Business 408 313 9 2 2 12 1 SourceComplete) Emerald 88 50 7 1 1 2 1 Science 45 56 161 19 1 44 17 Direct Informs 727 1,720 72 32 16 131 60 online22.2 Importance of evaluating supply chain problemsManaging supply-chain operations is critical to any company’s ability to compete effectively(Stewart, 1997). Over the past two decades there has been an acceleration of interest in theanalysis, management and control of supply chains (e.g. Gattorna and Walters, 1996; Beamon,1998; Petrovic, 2001; Christopher and Towill, 2002; Persson and Olhager, 2002; Shepherd andGunter, 2006; Gunasekaran and Ngai, 2008; Fildes, Goodwin, Lawrence and Nickolopoulos, 2009).Whether it is by coordination of activities through the supply chain or by recognising thecapabilities of immediate suppliers, understanding supply chain dynamics has a significant impacton performance (e.g. Tan et al., 1999; Kannan and Tan, 2005; Li et al., 2006).Supply chain management represents one of the most significant paradigm shifts of modernbusiness management by recognising that individual businesses no longer compete as solelyautonomous entities, but rather as supply chains (Christopher, 1992, 1998; Lambert and Cooper,2000; Spekman, Spear and Kamauff, 2002; Cousins and Spekman, 2003; Chen and Paulraj, 2004).This has led both researchers and practitioners, to consider improvements and practices outsidethe boundaries of an organisation (with suppliers and customers in a network, chain orpartnership) and ways to effectively manage and control the supply chain. The term ‘supplystrategy’, coined by Harland (1997), has been one significant attempt to move away from atraditional view of the flows between suppliers and customers to one that considers a moreholistic approach to managing the entire supply network. As a field of study and practice therehas been a whole host of other attempts to move research from an embryonic stage (suggested1 UK spelling is ‘modelling’ while in US dictionary it is spelt ‘modeling’; accounted for in the search2 Wintersim and Operational Research Society Simulation Workshop (accessed via www.informs-sim.org) 29
  30. 30. by Handfield and Melnyk, 1998; Chen and Paulraj, 2004); to one that has more scientificdevelopment and recognition as a discipline in its own right (Croom et al., 2000).There has also been a considerable interest to describe supply chain management, its activities,practices and ways to measure supply chain performance. In earlier years this was a distinct issuein SCM (New, 1997; Tan, 2001) but has been dramatically improved with recent researchcontributions. Most notably the advent of supply chain process frameworks developed by theGlobal Supply Chain Forum (e.g. Cooper, Lambert and Pagh, 1997; Croxton, Garcia-Dastugue,Lambert and Rogers, 2001; Lambert et al., 2005) and the Supply Chain Council (SCOR v.9, 2008)with considerable input from industry may have been a catalyst. These frameworks have beenused to describe, analyse and evaluate improvements to a supply system in order to improvedecision-making on ways to improve supply chain performance (e.g. Arns, Fischer, Kemper andTepper, 2002; Bolstorff and Rosenbaum, 2003; Wang, Huang and Dismukes, 2004; Ball, Love andAlbores, 2008; Persson and Araldi, 2009).The ability to evaluate the potential performance of supply chain opportunities is a criticalcomponent of the supply chain improvement process. The challenge companies’ face is how bestto evaluate the potential of the host of supply chain improvement options that could be pursued(Weaver, Love and Albores, 2006; 2007). Many of these improvement options have beendiscussed in the literature (e.g. Supply Chain Council 2008; Van der Vorst and Beulens 2002;Christopher, 1998; Berry et al., 1994). The fact that the Supply Chain Council suggests 420different improvement options, demonstrates the considerable scope of the evaluation challenge.Even when this number is reduced (e.g. Van der Vorst and Beulens (2002) presents a generic listof 21 supply chain redesign options) it still presents a challenge to identify the most suitableoptions based on the improvements in performance an organisation would realise.Companies have far too often attempted to optimise their own value chains, without consideringthe effect of these decisions on their suppliers or customers (Chopra and Meindl, 2004). Forinstance, Cooper et al., (1997) have shown that sub-optimisation of a company’s ownperformance rather than optimising the performance of the entire supply network, by integratingits goals and activities with other organisations, can destroy value-creating opportunities.Approaches (e.g. methods, frameworks, methodologies) that could aid in the process ofevaluating the value-creating potential of implementing alternative supply chain improvementsfor an organisation and its members in a supply network would be useful. They could help to 30
  31. 31. maximise an organisation’s performance and the benefits received up (towards the ultimatecustomer) and down the supply chain.2.3 Complexity of evaluating supply chain problemsA definition of a supply system was offered in section 1.1. It recognised that the entities comprisea number of actor (or roles, facilities) that make up the structure of the supply and demand chainin which an organisation (e.g. manufacturing, retail or third sector) sits between. The complexityof the supply chain arises from the number of echelons in the chain and the number of actors ineach echelon (Beamon, 1998).The supply system can vary in complexity (e.g. size). Harland (1997) identified different levels ofsupply, consisting of supply within the boundary of the firm (a process view), supply in dyadicrelationships, supply in an inter-organisational chain and supply in an inter-organisationalnetwork, each of these levels involve different degrees of complexity. The complexity is alsocompounded by the way in which actors within a dyad, chain or network can interact. As Levy(1994) points out that the interactions are strategic in sense as a decision made by one actor takeinto account anticipated reactions by others, thus it reflects recognition of interdependence. Thishighlights that inter-organisation behaviour can also increase the complexity of a supply system(e.g. interconnectedness between actors).Over the years the research and practice of supply chain management has grown in meaningthrough what Harland et al., (1999) describes as an externalisation beyond the boundary of theorganisation. Traditionally purchasing and supply management has been viewed as a firm-basedset of activities dealing with transactions between customer and supplier relationships (Baily andFarmer, 1985). Later work in the 1980s attempted to elevate the purchasing function from beingconsidered operational and clerical, to a strategic level (e.g. Spekman, 1981; Caddick and Dale,1987). A supply strategy involves more than just material, transaction and information flow, itshould take more of a holistic approach to managing the entire supply network (Harland et al,1999). Harland et al., (1999) further points out that this would include aspects such asinterrelationships between organisational roles, network configurations, governance, integrationand collaboration.As part of developing a supply strategy an organisation will adopt and implement one or many ofthe various supply chain improvement options, within the boundaries of the organisation andbetween suppliers and customers within the supply network. A supply problem is therefore made 31
  32. 32. up of these selected supply chain improvements, to achieve a supply chain objective, within thesupply setting that is specific to the actual organisation undertaking a study. Evaluating supplyproblems is inherently complex and presents challenges in terms of the scope and level of detailin which they should be analysed (Albores, et al., 2006; Weaver, et al., 2006). Owing to, forexample, a great variety of policies, conflicting objectives, and the inherent uncertainty of thebusiness environment, this is not an easy task (Alfieri & Brandimarte, 1997).2.4 Role of simulation to evaluate supply chain problemsSimulation has often been cited as a method that could present the greatest potential in studyingsupply chain as its complexity obstructs analytical evaluation (e.g. Ridall et al., 2000, Huang et al.,2003, Van der Zee and Van der Vorst, 2005). It is often regarded as the proper means forsupporting decision making on supply chain design (Van der Zee and Van der Vorst, 2005). Onereason for this is that it may be used to support the quantification of the benefits resulting fromsupply chain management (Kleijnen, 2005).A simulation model is a representation of the system of interest, used to investigate possibleimprovements in the real system, or to discover the effect of different policies on that system(Pidd, 1998). In this context, the system is a supply chain or network and simulation is used toevaluate the impact of different sets of supply chain improvements on the potential performanceof that system within its supply setting.The benefits of using simulation as a means to evaluate supply chain problems have often beencited. These include that simulation is the only approach that can holistically model the supplychain (Tang, Nelson, Benton, Love, Albores, Ball, MacBryde, Boughton and Drake, 2004) and canhandle stochastic properties (Hae Lee, Cho, Kim and Kim, 2002; Persson and Olhager, 2002). Thisis because it can be used to understand the overall supply chain process and characteristics usinggraphics/animation (i.e. model elements and relationships), able to capture system dynamics andfacilitate decision-making by minimising the risk of making changes without fully understand theimpact of various alternatives on performance (Chang and Makatsoris, 2001; Van der Zee and Vander Vorst, 2005). For instance, simulation is good for modelling the impact of variation such asforecast error, supplier reliability and quality variance (Biswas and Narahari, 2004). A classicexample of understanding the effect of dynamic behaviour (e.g. process delays, lead times,planning policies) in the amplification of demand signal, often known as the ‘bullwhip effect’ firstdescribed by Forrester (1961). 32
  33. 33. 2.4.1 Range of approaches used in simulationThe range of approaches used in supply chain simulation is overwhelming. Van der Zee and Vander Vorst (2005) point out that in the past decade, a large number of simulation tools for supplychain analysis have been developed internally (e.g. CSCAT in Ingalls and Kasales, 1999),commercially (e.g. e-SCOR in Barnett and Miller, 2000; Albores et al., 2006), or concernapplications of general-purpose simulation languages (e.g. Arena in both Kelton, Sadowski andSadowski, 1998 and in Persson and Araldi, 2009).There are a number of classifications of both modelling and simulation approaches suggested inthe SCM literature (e.g. Hicks, 1997; Beamon, 1998; Min and Zhou, 2002; Kim, Tannock, Byrne,Cao and Er, 2004; Kleijnen, 2005; Weaver et al., 2006; Owen et al., 2008). Min and Zhou (2002)present a detailed taxonomy of modelling and simulation techniques building upon previous workby Beamon (1998). Kim et al., (2004) used Min and Zhou’s (2002) taxonomy to review techniquesfor modelling supply chain in an extended enterprise, although they focused upon supply chainmanagement software and how these might be selected.A study by Kleijnen (2005) provides a more specific survey of supply chain simulation tools andtechniques and a discussion of some methodological issues. Kleijnen (2005) found that there arefour main simulation types for supply chain management: spreadsheet simulation, systemdynamics, discrete-event and business games. On the other hand a discussion by Owen, et al.,(2008) did not include spreadsheet simulation or business games but detailed how agent basedmodelling is an emerging approach for evaluating supply chain problems. In more recent years,new tools and techniques have been made available commercially largely due to the rise inpopularity of the SCOR process reference model. These have predominantly focused upon DES(e.g. Gensym eSCOR; see Barnett and Miller, 2000; Albores et al., 2006; Persson and Araldi, 2009)and adding simulation capabilities to existing static process modelling enterprise managementsuites (e.g. Mote Carlo capabilities in Proforma and Aris process enterprise modelling suites; seePoluha, 2007).In relation to DES tools, these can be distinguished into identifiable classes that include process,enterprise, manufacturing and supply chain specific simulation tools or techniques. Albores et al.,(2006) and Weaver et al., (2007) showed that each of these classes have different competenceswhen evaluating supply chain problems. It is important to distinguish these as tools specific tosupply chain management are emerging, while a lot of research is conducted using existingprocess (e.g. Process 2000 used in Benton, 2009), enterprise (e.g. suggested by Tang et al., 2004) 33
  34. 34. and manufacturing led packages (e.g. Witness used in Albores et al, 2006; Arena in Persson andAraldi, 2009) which have been established for many years.Figure 2.1 presents a classification of the different simulation approaches in light of the abovediscussion. Supply chain simulation approaches Multi-agent based Spreadsheet System dynamics Discrete-event simulation Business games simulation (SD) (DES) modelling Business process Manufacturing Supply chain wide Enterprise wide DES wide DES DES DESFigure 2.1 Classification of supply chain simulation approachesSource: Synthesised and extended from past contributions by Beamon (1998); Min and Zhou (2002) and Kleijnen (2005); Albores et al.,2006; Weaver et al., 2007; Owen et al., (2008)2.4.2 Extent and usage of simulation for researchThe amount of research to evaluate supply problems using simulation approaches is great. It isevident that simulation is not only a useful tool for evaluating supply problems, but has beenextensively used in the literature for research purposes. Table 2.2 lists each of the approachesidentified in section 2.3.3 and shows representative examples of the approaches being usedspecifically for SCM applications. The majority of examples that could be identified used discrete-event approaches, followed by system dynamic and some recent examples of multi-agent basedmodelling. The approaches are described in this section in the context of how they have beenused to analyse supply problems. 34

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