Helping small firms run large supply chains

January 17, 2006

Big manufacturing jobs, especially those in the defense industry that involve management of extensive supply chains, often require resources and expertise that many believe are beyond the capacity of small and medium-sized enterprises (SMEs). Recent work by researchers at the National Institute of Standards and Technology (NIST) and colleagues at Pittsburgh's Doyle Center for Manufacturing Technology, however, demonstrates the capabilities of simulation and visualization technologies for improving SME supply chain expertise.

The proof-of-concept test involved SME management of a 10-enterprise subassembly supply chain for a major aircraft engine component. The Doyle Center collected data for the simulation model often using questionnaires and personal visits to suppliers. NIST and Doyle researchers then adapted a commercial software program to build an accurate visualization and analytical simulation model for the supply chain enterprise.

The finished program allowed a small firm to know what would happen at any given time during the flow of material through the chain. Data inputs enabled it to use supplier production rates, inventory numbers and shipment times for components. The model identified prospective supply chain performance at "normal," "surge" (twice normal) and "mobilization" (four times normal) production rates. When the program uncovered potential bottlenecks in the supply chain, the team used the program to evaluate potential impacts and to implement solutions to mitigate risks and reduce costs.

NIST presented a detailed description of the project at the 2005 Winter Simulation Conference in December. "Stress Testing a Supply Chain Using Simulation," the NIST paper by Sanjay Jain and Swee Leong, is available at http://www.informs-sim.org/wsc05papers/203.pdf.
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National Institute of Standards and Technology (NIST)

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