Simulating Order Fulfillment with Product Substitutions in an Assemble-To-Order Supply Chain

Abstract

In today's competitive and dynamic business environment, companies need to continually evaluate the effectiveness of their supply chain and look for ways to transform business processes to achieve superior customer service and higher profitability. In this paper we propose a novel availability management process called Available-to-Sell (ATS) that incorporates demand shaping and profitable demand response to drive better operational efficiency through improved synchronization of supply and demand. We develop an order fulfillment simulation model to assess how the proposed availability management system affects supply chain performance, and apply the model in a server computer manufacturing environment. The simulation plays an important role in making strategic business decisions that impact customer service, revenue and profitability.