Reflections on Process-based Supply Chain Modelling and Analysis

Abstract: The interest in modelling, analysis and optimisation of supply chain structures has increased in the last decade. Among the reasons are globalisation, a general speed-up of the rate of change in the business environment, the trend towards more outsourcing of activities, and the rapid development in IT. This development has caused more and more people to realise the benefits of supply chain management. This thesis is based on an ESPRIT project, ISCO (Industrial Supply Chain Optimiser), carried out from late 1997 to early 2000. During this period a prototype for a software tool for supply chain modelling and analysis, named SCOPTI, was developed. The ISCO project had two overall objectives. One was to develop an advanced tool to support co-operation within the supply chain and enable simulation and optimisation in order to reduce costs, lead times and capital employed. The second objective was to demonstrate the benefits from using the tool in the Van den Bergh Foods extended supply chain. The European Commission mainly financed the research part of the project, with additional support by NUTEK (the Swedish Business Development Agency). The tangible result of the project became the software, SCOPTI (Supply Chain Optimiser). This thesis describes the theoretical underpinnings of SCOPTI, and the reflections made during the work. The main research question considered is “Could it be possible, advisable, and value-adding to describe supply chains by using a simple generic framework?” Based on a rather subjectivistic, qualitative approach to science, a case study research strategy including case studies at six companies in two independent supply chains was deployed. Process mapping and unstructured deep interviews were the primary methods for data collection. Systems thinking was the point of departure for the research, and the framework presented for supply chain representation, modelling or simulation, analysis and conceivably optimisation is also based on this approach. The thesis suggests a framework for supply chain representation that could be useful for supply chain analysis. The process mapping methodology is expanded to a supply chain level, and the benefits from this are described as promising. This research suggests that process mapping is a useful and valuable method for creating fundamental understanding of the supply chains’ processes. Furthermore, process mapping is an important foundation for further analysis, modelling and optimisation of supply chains. The generic framework presented for supply chain processes can support process mapping in supply chains. The analysis and modelling that are enabled by process mapping are essential for improvement of effectiveness and efficiency in any supply chain context.