Introduction: To remain competitive, industrial organisations are continually faced with the
challenges to improve product quality, reduce product development time, reduce production
costs and lead-times. Increasingly, these challenges cannot be effectively met by isolated
changes to specific organizational units.
The Supply Chainis a revolutionary concept embedded in a traditional guise. In brief a Supply
Chaincan be said to be the way physical goods and virtual information travels from the
supplier to the customer and all the steps there between. Supply ChainManagement changes
the demands on the material flow. Managing the Supply Chainhas become one of the most
important tasks for managers in the recent years.
The use of simulation tools has long been used in manufacturing and assembly operations. As
the use of simulations grew in the 1980s and the availability of simulation packages it helped
to push the tool into many other application areas and thus exposed new groups of people to
simulation.
The primary task for a manager is to integrate each stage into a larger system. Individual
organisations at each stage still manage resources, set objectives and pursue individual
objectives but when the companies within the Supply Chainwork as one the true source of
leverage appear.
Simulation technology is emerging as a new tool in Supply ChainManagement and its basic
strength is in evaluating system variation and interdependencies. This key component allows
a decision maker to evaluate changes in part of the Supply Chainand visualize the impact
those changes have on the other system components and ultimately the performance of the
entire supply chain.
Problem Definition: IKEA is expanding in the United Kingdom. Due to this situation a
number of problems will arise. How will the transportation costs look like in the future? Is it
possible for IKEA to have only one DC in the UK?
IKEA is in need of information about the Supply Chain. Is LORD a suitable program for
IKEA and how does it work?
Objectives: The objectives with the project are:
· To simulate the current situation and to build a simulation model which we can use for
benchmarking.
· To evaluate the program LORD and see if it would fit for IKEA as a simulation tool. · Create up to four different scenarios.
· To find a solution that fits the future needs of IKEA.
· The desired output is to identify the optimum number and location of DCs for the
network.
Conclusions : To use a simulation tool that can work with a model without making too many
simplifications would be a great asset to IKEA and help them in their decision making since
they operate in a complex environment.
Lord is program that may be very well suited for a minor company to model problems of
limited scope in time and in data. It may also, with more develop, become a suitable tool but
the version available today is not one we would recommend. For IKEA?s case the best thing
would be if it had a working excel- interface and the capability to run advance...
