Using Simulation to Enhance Procurement Sourcing Decisions

Greenwood, A., Hill. T. W., Saunders, C., & Holt, R. (2016). Using Simulation to Enhance Procurement Sourcing Decisions. 2016 Proceedings of International Conference of Industrial Logistics. Zakopane, Poland.

Abstract

The material procurement sourcing decision is complex, includes considerable variability and uncertainty, especially for international options, and significantly impacts enterprise performance. Acquiring the material usually requires multiple transportation modes and large distances. This paper describes a simulation-based system to support sourcing decisions by enabling the rapid development of simulation models of both domestic and international supply paths. Simulation models are used to assess the impact of selecting alternative suppliers in an uncertain environment. The decision-support system is demonstrated via a case study where a US-based automotive assembly plant assesses the impact of obtaining transmissions from domestic and international supplier.