Simulations Create a Winning Supply Chain

Gonzalo Florez-Giraldo is working on his degree in global supply chain management and logistics at Houston Community College. A degree in supply chain management opens up a lot of opportunities, because Houston is a hub of commerce with its busy seaport and its location at the center of a transportation network serving much of the Southeastern and Midwestern United States and parts of Mexico.

Using supply chain simulations Gonzalo won first place in an internal contest at Houston Community College, and went on to represent the college in a city-wide contest titled “Houston Logistics Talent Show 2016’, organized by the CSCMP Houston Roundtable (Council of Supply Chain Management Professionals). The contest was an opportunity for innovative and entrepreneurial students at colleges and universities in the Houston area to present their ideas and show how they could improve supply chain operations.

Gonzalo Cover Pg(these are slides from Gonzalo’s presentation – click on picture to see larger image)

He showed how to apply simulations to analyze and improve the operations of a distribution network. Gonzalo investigated the supply chain of a company located near Houston that produces polypropylene and delivers it to customers in Texas and California. He started by creating a model of the company’s supply chain. He defined and located the company’s plant and distribution center on the map. Then he defined and located the customer facilities on the map and defined vehicles, routes and delivery schedules to transport the product and meet customer demand.

This company’s supply chain model is illustrated in the slide below.

SC Model (click on picture to see larger image)

The following slide shows how the company plant and distribution center (DC) are defined in the supply chain model. For each of these facilities Gonzalo defined characteristics such as their product storage capacity, their daily rent and operating costs, production rates, product demand, and amounts of product on-hand.

Facilities (click on picture to see larger image)

In a similar manner, he defined the vehicles and delivery routes. And then Gonzalo ran simulations to see how well the supply chain performed and find areas for improvement. The simulations showed the initial production rate at the plant was too high and resulted in build up of excess inventory at the DC. Simulations also identified opportunities to adjust the size of some of the delivery trucks and redesign some delivery routes. One of the simulations is shown in the slide below.

Simulation (click on picture to see larger image)

Gonzalo tried out several ideas, and the simulations showed which one worked best. He found ways to redesign the supply chain so as to achieve significant reductions in inventory while still meeting customer demand. He also reduced vehicle costs and facility operating costs as shown below.

Results (click on picture to see larger image)

Using SCM Globe, Gonzalo applied supply chain and logistics principles and techniques that he learned from class lectures and readings. Simulations showed how those principles and techniques can be used to solve real world problems and improve a company’s operations and profitability. Simulations helped Gonzalo develop an intuitive or “street smart” sense of how this supply chain worked and how it could be improved.

The insights and problem-solving techniques he learned and practiced in these simulations are directly applicable to real challenges he will encounter in his job. Continuing market demands, and rapid rates of technical innovation are making big changes in how supply chains are managed. Simulations are a key part of how supply chain professionals will do their jobs in the years to come.

Gonzalo summarized his experience and acknowledged the people who helped him win this award:

“…using SCM Globe I earned a Certificate of Award as a Finalist. The title of my research was “Simulation based on a GIS Map with Scheduling and Cost Optimization”. I want to give special acknowledgment for the support and inspiration received from my HCC teacher, Prof. Steven Woodland, and also to Ms. Cynthia Garza, Director, HCC Logistics Center of Excellence.”

 

SCM Globe — Interactive Supply Chain Simulations