Managing strategy and production through hybrid simulation

Abstract

PurposeThe new extremely demanding environment forces the enterprises to use more sophisticated tools/methodologies. Strategy alignment and modelling and simulation are some of those tools/methodologies that are growing in their complexity in order to respond to the new challenges. Applying the principles of strategy alignment to modelling and simulation leads to creation of vertical hybrid simulation models. This paper aims to discuss these issues.Design/methodology/approachThis paper shows the justification of building a hybrid simulation model for a complex scenario in a production example. In general, system dynamics (SD) is used for simulation of strategic issues and discrete event simulation (DES) is used for simulation on the operational level. Attempts to build holistic models only with SD or only with DES usually end in design of simplified models. This paper shows an approach how to combine SD with DES in order to get better models than using either modelling paradigms exclusively.FindingsThe results so far have shown that this approach is justified (meaning that it gives more accurate and reliable results with reasonable efforts) in even relatively simple cases.Practical implicationsThis kind of modelling and simulation can generally help the (industrial) engineers in optimization of different problems like optimization of the warehousing space, batches, manpower, etc. holistically and with higher accuracy.Originality/valueAlthough several researches on hybrid models have been reported (treating only very few industries), they very rarely tackle the justification of the implementation of such models. This paper justifies the hybrid approach through an example of optimization of the sales force in the pharmaceutical industry.

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