Collaborative Supply Chains The individual Supply Chain Management (SCM) Globe Research Paper should demonstrate the individual’s ability to integrate and synthesize the SCM Globe simulation as well a

SCM Globe Simulation

Collaborative Supply Chains

ASCM 631

University of Maryland University College

Professor Jim Bryant

November 11, 2018

I was given the task to evaluate the SCM globe simulation tool for a new company the Just Born Candy Company. As the testing evaluator it is my job to come up with a way to properly manage two different companies and evaluate how well the simulation is able to handle the changes the occur during the simulation. This will be done by figuring out which combination of different supply chain operations will allow it to run with the most effective approach. As the evaluator for the simulation I will have to fix all demand issues, route issues, supply issues, storage issues and any other possible object that may present itself while trying to come up with an approach that will allow both organizations to run smoothly. Then provide them with a recommendation on how I felt the simulation ran and its possible benefits. By accomplishing this it will allow the simulation to meet the objective that has been put into place.

Based on the data and information that will be provided in this paper you will be able to see what issues were found that became a problem for both companies and what steps were taken to fix the problem. It will also show what changes had to be made during the simulation that either made things worse or better for the simulation. The main reason for the entire simulation other than a teaching tool, is to get two companies that were not able to compete as individuals against the bigger brand companies so they had to figure out how to come together so that both companies could still survive. This simulation proves that they can do that and draw in the necessary revenue to compete.

The two companies need to run as a unit in order to run successfully. They must find a way to balance every aspect associated with running the companies individually and as a unit. This will mean balancing all known components and the demands that they produce per day must go with the production per day as well as the quantity per day. The operation cost and the storage must also be balanced.

During the first week of the simulation (week 2) the task was to load the simulation (collaborative supply chains) case study. Given how SCM globe is designed to function the data will allow for adjustments in the supply chain to ensure proper operations. This includes adjustments with truck routs, changing to different modes of transportation, storage, adding and removing facilities, inventory and the quantities being produced and delivery schedules. The first four graphs will show the results of the changes made to the simulation as a result of trying to merge the two companies and get them to run together.

Error one occurred when I first downloaded the simulation at only three days, there was a storage issue at Just Born Candy Factory. This would be a problem because it would cause an issue with being meeting demand while still trying to keep up with production. The first changes that were made was to change storage from 300 to 500. I also changed the daily operating cost from 5500 to 500. With these changes the simulation ran for six days. The second error stated that there wasn’t enough Crunch 2 – Case at the Parsippany store. Looking at the simulation we now had enough storage but the demand continued and wasn’t able to keep up with the storage that was not available. So Storage at this store was change from 500 to 1000, and product for all wet from 0 to 100. This allowed the simulation to run for eight days. There was another error (#4) truck JB DC Truck 1 on route Sburg Hopat – Parip picked up more product (JB Candy 1 case) than what was in stock at the Just Born Candy DC factory. This would require that we either balance stock or carry a safety stock. In order to try and balance the stock levels and carry a small amount of safety stock the following changes were made:

Demand per day JB candy 1&2 - 0 to 10 both

Production per day 0 t0 10 both

Qty on hand JB 1 490 to 200; JB 2 800 to 200

Daily operating cost changed from 3000 to 800 and JB candy factory storage moved 800 to 1500. With all of these changes the simulation still only rand for 8 days. Due to the information that I was able to see with the data that is provided through SCM globe I was able to see what was still being missed in order to get it to run I made one final attempt in this week moved the storage in the Parsippany store to 50,000 it ran the simulation for 12 days.

Week 2 - 9/20/2018 (12 Days)

Week 2 - 9/20/2018 (12 days)

Week 2 - 9/20/2018 (12 Days)

Week 2 - 9/20/2018

Week 3 started off with stocking issues in one of the stores. Vehicle Crunch DC Truck 1 on route New Brunswick route picked up more product Crunchy 1 case than what was in stock at the Crunch Candy DC facility has. The following changes were made to try and go with a just in time delivery method to try and prevent the shortage of stock and still keep up with demand. We also want to keep in mind that we are not creating an access of stock that will create waste causing storage prices to go up as well as production for materials that aren’t needed.

Crunch Candy DC

Storage 5000 to 15,000

Daily Operating Cost 1,200 to 500

Crunchy 1 Case: Demand per Day 200; Production per Day 400; Qty per Day 800

Crunchy 2 Case: Demand per Day 200; Production per Day 400; Qty per Day 800

This simulation ran for 18 days which is a better cycle than the first week, but still did run as a unit. As you can see in the factory out report the distribution centers needed to run as a unit as well. The levels were all changed gradually over the course of the 20 days that the final step of that simulation ran for that week in order for that to take place. You also notice that there was a more consistent rise in the facility storage of JB factory that there was for the Crunch Candy factory.

Week 3 – 9/27/2018 (20 Days)

Week 3 – 9/27/2018 (20 Days)

Week 3 – 9/27/2018 (20 Days)

Week 3 – 9/27/2018 (20 Days)

Week 4 – 10/3/2018 (296 Days)

The simulation for week four ran for almost a year (296 DAYS) so the system would not produce an excel file because the file was too large. The graphs and charts to try and recreate this data would also be too large The easiest way for me to show you the information is through screen shots and to explain what I did and the outcome that produced the results which are shown below.

I had to figure out logistically what would be the best course of action to take in order to get this simulation to run as accurately and as cost effectively as possibly. The most efficient way was to separate the two stores. So as the evaluator I had to use the tools of the simulation and see what would be the best possible outcome. I chose to delete the two distribution centers and create one factory that could sustain the entire route and still allow them to be competitive in the market with low cost and high revenue. I created Just Crunch Candy DC. I knew I would have to change the vehicles, the routes the storage capacity, daily operating cost, which facilities would go on which truck routes and much more. The best way to do this was to break it down using the four supply chain objectives: product, vehicles, facilities and routes. The results of everything are as follows:

Added a large truck (Just crunch truck)

• Operating cost 0.6, carbon 1, carry volume 500, max weight 50,000, speed 90

The route for this truck was Parsippany, Hoboken, and the New Brunswick stores plus the distribution factory.

Just Crunch Candy Dc

Storage: 200,00 ; Daily operating cost 500 ; rent 2,000 ; carbon 1 ; demand peer day 200 ; production per day 500 ; quantity on hand 1,000

This is important because you have to make sure that the amounts in place are able to with stand the demands for all your stores because it is now your sole distribution center. It had to balance out production, distribution and demand.

There are two routes now so I had to create another truck route. I created Crunch Factory Truck Route that stopped at Allentown, Stroudsburg, Hopatcong stores and the distribution center.

All of the stores were set up the same so that they had even distribution to see how it would work with the demands of the customers as this was a new layout in the delivery of inventory and routes.

Storage (25, 000); operation cost (200); demand per day (100); production per day (150); qty on hand (200).

The labor, utilities and insurance were all set to 15, 000 as a default price and the rent at $2 per simulation suggestion.

This gave amazing results of a 254 day simulation run. Having two separate trucks run from one distribution center on smaller routs that were able to hold more inventory and the facilities given more storage but not so much so as to cause waste create large amounts as you can see form the data below.

Week 4 – 10/3/2018 (296 Days)

Week 4 – 10/3/2018 (296 Days)

Week 5 10/11/2018 (28 Days from 354 Days)

Although as the evaluator I had found a way to run a successful supply chain I wanted to see if I could lower the storage necessary therefore cutting cost and inventory but still maintaining the revenue that was coming in. I ran the simulation twice the fist I was able to get 312 days. I ran out of storage at the Hoboken store so I raise it to 50,000 which was the opposite of what I was trying to achieve. So I made the following change also:

Crunchy 1 & 2 Price 350 to 200 (C1) 200 to 150 (C2)

JB Candy 1& 2 250 to 200 (JB1) 300 to 200 (JB 2)

I tried to run this almost like a sale option in order to move more inventory at a lower cost and clearing out storage. It dropped the simulation down to 28 days which is still good but as you can see from the data below there was still great revenue outcome.

Week 5 10/11/2018 (28 Days from 354 Days)

Week 5 10/11/2018 (28 Days from 354 Days)

Week 5 10/11/2018 (28 Days from 354 Days)

Week 5 10/11/2018 (28 Days from 354 Days)

Week 7

I noticed that two of my stores were producing more that my other stores so I decided to add a third truck and a new route from my distribution center to see if a could capture more of that customer demand and create more revenue. The Hopatcong and Parsippany stores both had great output and were in perfect alignment with each other to create a third route. So I created

HopaPar Route that ran to both stores and the distribution center. They would also have their own truck HopaPar Truck which would be a med size truck given that it’s only two stores and you don’t want to waste money on resources not needed like a larger truck.

Carry 60, weight 8,000. Speed 90

There was an error at 32 days more product was picked up than what was in stock at the distribution center. I didn’t take into account that adding a new route at two of my largest producing stores would require more product to come out of the distribution point. Whenever you have a higher demand for a product and you decide to move it at a higher rate than what was normally done before you have to make sure that you balance your stock levels and carry safety stock. I changed the production levels and on hand quantities it ran for 254 days.

Week 7 – 10/23/2018 (224 Days)

Week 7 – 10/23/2018 (224 Days)

Conclusion

During the evaluation of the SCM Globe simulation I notice a few things that could be changed. It proved to be a little difficult when you tried to change routes according to the instructions in the manual. It was easier to delete everything and start over and create a new route. The same applied for new stores and factories. The simulation doesn’t allow you to enter the required information to make the changes. It deleted information and routes but wouldn’t upload the new information for both routes and facilities. There was also no clear way of making sure that the simulation saved the data of the last uploaded simulation. I noticed that on one of the completed simulations I hit the save tab and went back to the other screen to reopen the simulation to make changes and it had not saved. There should be something in place to make sure that your simulation has actually saved so that you don’t have to redo them. Another issue is the inability to create an excel file for large simulations. I have some simulations that ran for 256, 254, and 354 days and when I tried to create the excel file through the SCG system it said that the file was too big to create an excel file. That brings up another issue when the simulation is in excess of 100 or more days it takes a long time to run the simulation. There should be something in place that allows you the jump to the last day so that you can correct the error and continue with your corrective action plan. On the plus side the simulation it is a great learning tool to teach and show you how to run a real-life supply chain. It allows you to see what challenges you will run into while trying to meet the needs of your customers and your business. You are put in real life situations with setting up stores determining what you are supplying how much you think you need to produce on a daily bases and what needs to be shipped out. Then it shows you didn’t options to use for shipping which is great because in a real life situation you may need something other than just a truck and this simulation allows you to try plans and trains and see how it works. It puts real life in your hands and allows you to completely run a business make mistakes and fix them and see the outcomes. Over all I think it is a great learning tool to teach on how to run a supply chain, what to expect and how to fix it. It would be my recommendation that management should fund enterprise wide implementation of the tool.

Reference

Hugos, Michael. 2018. https://www.scmglobe.com/