TABLE OF CONTENTS Now that we have explained how to take a firm to the highest and most appropriate level of the supply chain maturity model, and how to track the savings from that model and the SCOR model to financial statements, we are prepared to consider how to make sure the potential savings are real before engaging in what could be a high-risk transformation process. In this chapter, we will introduce the idea of using computer-based simulations to test business improvement changes before implementation and will suggest ways in which simulations can be used to help optimize processes and supply chains before encountering risk in the possible outcomes. Simulation will be explored and defined as a logical business implementation tool, with the inherent techniques explained along with numerous examples of how firms are getting the most benefit from the tool.
In essence, simulation provides a "virtual test bench" for process improvement, as it is a technique that focuses on quantitative measures that could result from various potential actions. It provides a representation of the process actions in a manner that is transparent to the business user, thereby generating a prediction of potential business performance should the process, rules, and parameters be adopted or altered in practice. It provides a means of testing alternative solutions and outcomes before actually engaging in the introduction of the changed processing.
As we explore simulation, we will explain how it is used to gain value, its role within a business process management suite, and...
