a methodology for simulation conceptual modelling that embeds the scor process reference model
DESCRIPTION
A Methodology for Simulation Conceptual Modelling that Embeds the SCOR Process Reference Model. Dr . Miles Weaver, School of Management, Edinburgh Napier University [email protected] @DrMilesWeaver. #SimCM. Outline. Importance of conceptual modelling and need for a SCM 2 - PowerPoint PPT PresentationTRANSCRIPT
A Methodology for Simulation Conceptual Modelling that Embeds the SCOR Process
Reference Model
Dr. Miles Weaver,School of Management, Edinburgh Napier University
[email protected] @DrMilesWeaver
#SimCM
Dr. Pavel Albores,Aston Business School
Dr. Doug Love,Aston Business School
Outline• Importance of conceptual
modelling and need for a SCM2
• Requirements (Specification) - (what do we need the conceptual model to do)
• Outline design - (what procedure is needed to arrive at this conceptual model)
• Illustration of the SCM2 and the incorporated key concepts
– General guidelines for building an ‘effective’ conceptual modelling
– Embedding the utility of a process reference model (e.g. SCOR)
What is a simulation conceptual model?A simulation conceptual model (SimCM):
• Documents and details the explicit statement of assumptions and relationships to be included in the simulation model in accordance with the problem statement (Manuj et al., 2009)
• A non-software specific description of the simulation model that is to be developed, describing the objectives, inputs, outputs, content, assumptions and simplification of the model (Robinson, 2004; 2008)
Uniqueness for simulation purposes:
• ‘process’ to be followed – at the heart of this is setting the model boundary & level of detail (model content)
• ‘output’ – the description of the computer model to be built is as ‘simple as possible’ (by drawing assumptions & simplifications) and is both credible & valid
Simulation conceptual modelling for SCM applications
• Evaluating supply chain problems is important (Stewart, 1997); difficulty is that they are inherently complex and dynamic systems (e.g. Davies, 1993; Levy, 1994; Beamon, 1998)
• Simulation is an approach that is often used for evaluating SC problems; extent of research is great (Weaver, 2010)
• Creating a conceptual model is often regarded as the most important stage of a simulation project (Law, 1991); but little is written on the subject (Robinson, 2004b).
• SimCM is a ripe area for research (Robinson, 2006, 2010). Even in the SCM domain, Manuj et al., (2009) noted that further development in this area can improve the rigour of simulation studies
• No methodologies exist that could guide a user through the creation of a conceptual model (Weaver, 2010).
The ‘idea’ behind the SCM2
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Domain-specificSimCM procedure for
SCM applications
Incorporate existingSimCM guidance from
the literature
Embed domain-knowledge in the form of a process reference model
Provide inputs to the process of SimCM (i.e. setting the
model boundary & detail) and standard descriptions?
Incorporate a general process, general principles,
methods for validation, advice on simplification?
Relationship between the requirements and outline design for SCM2
Outline design(what procedure is needed to arrive at
this conceptual model)
Requirements (Specification)(what do we need the conceptual model to do)
Requirements for building an ‘effective’
conceptual model
Requirements for conceptual modelling for SCM application (domain-specific requirement)
Validity &Credibility
Model simplicity
SC complexity SC detail SC
objectivesSupply setting
General guidelines for building an ‘effective’ conceptual modelling
General process for conceptual modelling
Incorporating existing guidance to build a ‘valid’ and ‘credible’ model
Incorporating existing guidance to keep the model as ‘simple’ as possible
Embedding the utility of a process reference model (e.g. SCOR)
Using SCOR to describe supply chain improvements
Using SCOR to describe supply chain objectives
Using SCOR to determine the interconnections with the supply setting
Phase 1:
Describe the supply problem
Output: Description of the improvement(s) to be evaluated, for a given
objective(s) within its supply setting
Phase 3:
Determine how each improvement
is to be represented
Output: Description of the processes that represent
each improvement
Phase 2:
Determine how each objective is to
be measured
Output: Description of the processes that provide data
used to calculate each objective
Phase 4:
Determine how the inputs and their
sources interconnect within the model and with
its immediate supply setting
Output: List of inputs and candidate processes for possible inclusion in the
model boundary
Phase 5:
Formulate the model boundary
Output: List of processes and inputs included in the model
Phase 7:
Document and validate the conceptual model
Output: A valid description of the computer model to be developed
Phase 6:
Design the level of detail necessary to
implement the modelOutput: Description of the
model components and interconnections that represent the actual
practices included in the model
Point of entry
A formal problem formulation and structuring methodology or unstructured problem from client
Build a prototype and use sensitivity analysis to extend
the model boundary and level of detail
Output: Refinement of the model boundary and level of
detail
Iterate for each PROMOTED process decided in phase five
Experimental situation:CoffeePot Case
Q: Where and how to cost effectively manufacture products in a global and complex supply setting?
Efficient manufacturing scenario in a low-cost area with either shipments made in:(S1) small (by air)(S2) large quantities (by road and ship).
Further detail on the CoffeePot case: Taylor, G. D., Love, D. M., Weaver, M. W., & Stone, J. (2009). Determining inventory service support levels in multinational companies. International Journal of Production Economics, Vol. 116 No. 1, pp. 1–11.
Phase one:Describe the supply problem
Output: The supply problem is described from the perspective of the client
Statement of supply chain problem
Statement of objective(s) of study
Output from 1.1
A multi-national manufacturing company (MNC) is deciding how to cost effectively manufacture products in a global setting. The aim is to determine how much finished goods stock (reduce supply chain assets) to have on hand to support sales at a 95% desired service level (increase supply chain reliability).
Description of improvements to change the existing system
Output from 1.2
A MNC has an efficient manufacturing facility in a low-income/low-cost location (i.e. Asia or Africa) and a warehouse in a high-cost area where the product is primarily distributed and sold. Shipments are currently made in large quantities, with a cost effective and slow shipping method (road and sea). The MNC wants to consider the impact of a change in the shipping method, by shipping in small quantities, with an expensive and fast shipping method (all air) on the defined objective.
Description of the problem setting
Output from 1.3
The MNC has an efficient manufacturing facility in a low-income/low-cost location (i.e. Asia or Africa) and a warehouse in a high-income/high-cost location where the product is primarily distributed and sold (i.e. North America or Western Europe). The capacity for an efficient production facility is defined as one which has a low cost of capital and shipping in economic quantities. The method for shipments from a low-cost manufacturing location to a warehouse in a high-cost area can be larger, cost effective and slow, or small, expensive and fast. It is assumed that the product selected is a coffee maker (Mr Coffee Expert Model) which is representative of a functional product type.
Statement of how each improvement could achieve the desired impact on the objective(s)
Output from 1.4
An off-shore location offers advantages to reduce cost (e.g. Alguire, Frear and Metcalf, 1994; Fagan, 1991; Monczka and Trent, 1991). The study seeks to examine how much finished goods inventory at hand is needed in the warehouse to satisfy a defined customer service requirement at lowest cost. The shipment size, speed and cost will affect how much finished stock is available at hand. If there is insufficient inventory stock-out will occur leading to the service level not being met, while too much inventory will satisfy the requirement but will incur a cost. Simulation is a good method to evaluate this problem as it will allow a user to adjust the re-order point to obtain a desired service level and review the implications on finished goods inventory costs.
Key Concept 1: Embedding SCOR in a generic procedure for simulation conceptual modelling can aid in the description of a problem from the perspective of the client using standard terminology and domain-specific process detail
Phase two:Determine how each objective is to be measured
Output: The objective is described in terms of how it will be measured
Statement of how each objective will be measured
Perf. Att. Perf.
metric level
Perf. metric Definition of metric calculation Process elements Actor M’ment
span
Output from 2.1 Output from 2.2 Output from 2.3
Assets Level 3 metric
AM3.16: Inventory days of supply (Value of finished goods inventory/(COGS/365))
S1.4 WH Process
D1.8 WH Process
Delivery reliability
Level 2 metric
RL.2.2: Delivery performance to customer commit date
The percentage of orders that are fulfilled on the customer's originally scheduled or committed date = [Total number of orders delivered on the original commitment date] / [Total number of orders delivered] X 100%
D1.3 WH Process D1.12 WH Process D1.13 WH Process
Key concept 2: Embedding SCOR in a generic procedure for simulation conceptual modelling can aid in determining how an objective can be measured using standard descriptions of typical performance attributes and metrics; plus data collection needs from associated business processes at different levels of detail
Phase three:Determine how each improvement is to be represented
Output: The improvement is described in terms of how it is to be represented
Statement of how each process is to represent each improvement
Improvement option Level of process detail
Business process Actor
Output from step 1.1.2 Output from step 3.1 Output
from 3.2
A MNC has an efficient manufacturing facility in a low-income/low-cost location (i.e. Asia or Africa) and a warehouse in a high-cost area where the product is primarily distributed and sold. Shipments are currently made in large quantities, with a cost effective and slow shipping method (road and sea). The MNC wants to consider the impact of a change in shipping method by shipping in small quantities, with an expensive and fast shipping method (all air) on the defined objective.
Level 3 D2.10 Fact.
Level 3 D2.11 Fact.
Level 3 D2.12 Fact.
Level 3 D2.13 Fact.
Key Concept 3: Embedding SCOR in a generic procedure for simulation conceptual modelling can aid in determining how each improvement can be represented by business processes to implement each improvement at different levels of detail
Phase four:Determine how the inputs and their sources
interconnect within the model and with its immediate supply setting
Output: Provide a list of model inputs and candidate process elements (NB supplies information only to formulate the model boundary)
Key Concepts 4 and 5: Embedding SCOR in a generic procedure for simulation conceptual modelling can aid in determining the model boundary by providing information on the relationships between business processes (i.e. interconnections between inputs and outputs germane to each process element)
Key concept 4: Identification of core process elements and their inputs generated from a
source process elementDescription of the supply problem
Description of how each objective is to be measured
e.g.S1.4 (WH), D1.8 (WH), D1.3 (WH), D1.12 (WH), D1.13 (WH))
Description of each improvement to be
represented
e.g. D2.10 (F), D2.11 (F), D2.12 (F), D2.13 (F)
Example of SCOR inputs and outputs to a decomposed business processSource: SCOR V.9 (2008)
Phase four:Determine how the inputs and their sources
interconnect within the model and with its immediate supply setting
Output: Provide a list of model inputs and candidate process elements (NB supplies information only to formulate the model boundary)
Key concept 5: Process elements that have yet to be included in the model can be classed as ‘candidates’ for possible inclusion
Does the source process element (that generates each input to be fed) exist as a CORE or PROMOTED process element?
Phase five:Formulate the model boundary
Output: Provide a list of processes and inputs included in the model
Key concept 6: Decision rules can be used to consider which business processes to include within the model boundary from identifying the critical relationships between (core processes) and within the setting (real world) of the processes that are associated with each objective and improvement
Simplify – Promote – Test - Exclude
Rule 1: Will the input to be generated from the candidate process element effect model behaviour by significantly impacting on the objectives of study?
Phase five:Formulate the model boundary
Output: Provide a list of processes and inputs included in the model
Decision rules can be embedded in a generic procedure to simplify inputs to the model and to determine when no further processes should be included in the scope of the model (i.e. model boundary is set)
Simplify – Promote – Test - Exclude
Key Concept 7: Included process elements are considered in turn to identify those that could be simplified
Rule 2: Can the input be generated in a simplified form (i.e. a random distribution or fixed value), so that there are no further inputs to the process?
Embedding SCOR in a generic procedure for SimCM can (not in the scope of presentation):
• Key concepts 1 – 5: Aid in providing clear domain-specific guidelines for extracting information from a pre-defined process reference model and when necessary focus consultation with people who are knowledgeable about the system being represented
• Key concept 8 & 9: Aid in focusing consultation with people who are knowledgeable about the system being represented to determine the detail of the actual practice that needs to be included from the descriptions provided for each process element included in the model boundary and simplified inputs
Example of SCOR inputs and outputs to a decomposed business processSource: SCOR V.9 (2008)
Summary & implications for further work
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Domain-specificSimCM procedure for
SCM applications
Incorporate existingSimCM guidance in the
literature
Embed domain-knowledge in the form of a process reference model
1. Develop a web-based application that can automate a number of the steps2. Further refinement and validation of the SCM2
• Feasibility & utility with a range of process reference models in different industrial contexts