Increasing Value Generation Using a Hierarchical Simulation-Based SCOR Framework

We are part of extraordinary times, global recession coupled with increased competition; high costs and decreasing demand have changed the dynamics of supply chain management (SCM). In response, many organizations have fast-tracked changes to corporate-level strategies to reduce costs and maintain profit margins and have not considered the long-term impact these decisions have on more operational-level SCM activities. This has resulted in a renewed focus on customer value and the economic and behavioral systems of the supply chain, or more accurately, the value chain. The Supply Chain Operations Reference (SCOR) model increases the integration organizations have within their supply chains and increases alignment between different hierarchical strategies. Simulation techniques, in particular discrete-event simulation (DES) and system dynamics (SD) are proven techniques in improving SCM corporate and operational decision making processes. This paper presents a framework that integrates SCOR with DES-SD modeling approaches in order to improve the performance of inventory management in a leading tire distribution center in Ireland. This integration shows an effective method to evaluate order strategies, enhance throughput and increase value generation within supply chain networks.