Question

What are the supply chain modeling and the significance thereof?

Answer 1

Answer:

Supply chain modelling is an essential component of developing and validating supply chain and distribution strategies. It is used to test alternative supply chain decisions, evaluate performance and analysis weakness of the supply chain analyst or managers.

Answer 2

Answer:

Supply chain modeling represents a conscious attempt to bring order into a supply chain to achieve certain business objectives, such as lowest supply cost, on-time delivery and an ability to cope with disruption. It deals with questions such as:

1. What to produce
2. Market identification
3. Siting of production plants
4. Finding the best suppliers
5. Supplier and plant locations
6. Transportation and inventory
7. Distributing finished products

Significance:

The ultimate goal of any supply chain must be to satisfy the final customer. Satisfied customers return to buy more products, and through this process, successful organizations develop brand loyalty and recognition. According to customer service consultant Micah Solomon, customer satisfaction starts with:

1. A perfect product
2. On time delivery
3. Friendly service
4. Effective problem resolution

To achieve this, you need the right supply chain model, but not only that, you need to manage it effectively. This demands two things. Firstly, your model must be robust and fit for purpose. Secondly, your model should have internal visibility so you can identify problems and deal with them proactively. You need to be able to interrogate the model to discover the best solution for every key decision.

Supply chain modeling provides forward-looking companies with the tools they need to manage their supply lines to:

1. Control inventory
2. Reduce costs
3. Meet customer demand
4. Increase efficiency
5. Respond to demand