Simulation Use Cases

The effectiveness of any planning system hinges on its ability to accurately reflect the complexities of your operations. Simulations play a critical role in testing various scenarios, calibrating planning goals with real-world constraints, and iteratively refining the system to deliver the best possible results.

While service is critical, inventory often faces financial scrutiny, prompting planners to prioritize reduction. However, reducing inventory can significantly impact service, and achieving desired levels within a set timeframe may be unrealistic given current inventory levels. Simulations provide a realistic assessment of the consequences of inventory reduction. At PTC's LiveWorX 2017 conference, Philips Healthcare shared how they used SimAcumen's simulations to negotiate budget cuts.

While budget cuts present one scenario, the establishment of a new Service Level Agreement (SLA) offers a contrasting use case for simulations. In this instance, planners face the complex task of evaluating how alterations to the stocking policy will influence service delivery while simultaneously considering the associated costs. Given the intricate interplay of factors involved, simulations provide the only realistic approach to accurately assess the feasibility and financial implications of meeting the demands of the new SLA.

Organizations frequently resort to overstocking as a buffer against supplier performance deficiencies. However, a more strategic approach involves establishing an incentive/penalty structure that fosters collaboration and mutual benefit. Simulations offer a realistic assessment of the impact of supplier performance on service levels, empowering you to negotiate effectively and build stronger, more collaborative supplier relationships.

Performance-Based Logistics (PBL) contracts shift the focus from simply delivering goods to guaranteeing a specific level of service. These contracts include performance-based incentives and penalties that directly impact profitability. Simulations provide invaluable insights into the service delivery implications and associated financial risks of your chosen stocking policy within the context of these demanding contractual terms. As such, simulations are not merely recommended but are absolutely required for accurately assessing the potential costs and benefits and negotiating fair and competitive pricing for PBL contracts.

While efficient supply chains can effectively manage typical fluctuations, large-scale disruptions - from changes in tariff laws, volcanic eruptions, to pandemics – can severely challenge even the best-managed supply chains. Traditional supply chain theory frequently proves inadequate in addressing the compounding effects of such unforeseen events. Simulation is a crucial tool for evaluating the potential impact of these disruptions and for developing and testing robust mitigation strategies. Discover how Thermo Fisher Scientific utilized SimAcumen's simulations to effectively navigate the challenges posed by the COVID-19 pandemic.

The IoT revolution has ushered in an era of abundant sensor data, enabling predictive analytics to anticipate equipment failures before they occur. This proactive approach empowers service parts planners to improve service levels while simultaneously reducing inventory levels. However, the effectiveness of this approach hinges on effectively managing the inherent uncertainties associated with predictive failure signals and long lead times. Simulation is a powerful tool for addressing these challenges, enabling planners to optimize service supply chains by leveraging the insights gained from predictive analytics. This innovative approach was presented at PTC's LiveWorX 2019 conference.

In many scenarios, different demand streams require distinct service levels from a shared inventory pool. Traditional planning models often lack the capability to evaluate service performance across these varying priorities. Simulations, however, can provide these critical insights, enabling service planners to refine their planning systems and achieve the desired differentiated service levels.

Optimizing service levels while minimizing costs requires a robust system. Simulations enable objective evaluation of potential systems to ensure they perfectly align with your unique requirements.

Service parts supply chains, characterized by low turns and high service level requirements, have a large impact on the carbon footprint. Expedited shipments are the biggest contributor to the footprint that can be reduced by optimal supply chain decisions. Simulation enables a holistic evaluation of the supply chain with expedited decisions which is required to understand the true impact on the carbon footprint and design strategies to improve sustainability.