Supply Chain Simulation

Supply Chain Simulation Definition
Supply Chain: A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials; transformation of these material into intermediate and finished products; and distribution of these finished products to customers. (Source: Ganeshan & Harrison - Introduction to Supply Chain Management)

Simulation: A representation of a situation or problem with a similar but simpler model or a more easily manipulated model in order to determine experimental results.

Supply Chain Simulation: A computer model of a supply chain network that behaves in a manner similar to the actual network, enabling prediction of future supply chain metrics and performance.

Supply Chain Simulation - Overview
Supply Chain Guru incorporates the most advanced supply chain simulation in the world, directly into its interface. You import or enter configuration data about your supply chain network into a Guru model (or work directly in MS Excel, Access, or using SQL).

Then, press the simulation button and Guru will automatically build and run the network simulation model.

Results are automatically extracted and summarized into the Guru tables. You can quickly look at simulation summaries, or dive down for an in-depth look at the details of individual model variables.

Guru has extensive scenario analysis capabilities to streamline the process of analyzing your results. You can use built-in scenario generation tools to quickly create numerous policy and structural alternatives, and then use batch-run capabilities to simulate all of them automatically. Supply Chain Guru is the premier tool for the Supply Chain Strategy professional looking for maximum productivity, power, and efficiency.

Supply Chain Simulation - Algorithm
Supply Chain Guru uses Discrete Event Simulation (DES) to simulate extremely detailed and complex supply chain network operations. DES allows the model to incorporate both TIME and RANDOMNESS into its simulation.

TIME is simulated using an event calendar, where individual demands, production runs, order fill operations, and shipments are all scheduled to occur in time, and trigger other future events in the simulation.

RANDOMNESS is incorporated through the use of random variables in place of deterministic or fixed numbers. Most any time field and many other quantity fields in Guru models can incorporate randomness using:

  • a fixed time, such as “1 DAY”
  • a distribution such as “N(1, 0.1) DAY” (the time is normally distributed with a mean of 1 and standard deviation of 0.1)
  • or empirically, such as “D(1, 0.6, 2, .4) DAY (the time has a 60% chance of being equal to 1, & a 40% chance of being equal to 2)


Guru’s simulation engine is extremely powerful, designed for speed and flexibility. Small models can be run nearly instantly; large models can be scaled up for true Enterprise Simulation of individual supply chain transactions.

Guru’s supply chain simulation engine, called Enterprise Simulation Planning (ESP) engine, is deployable on all Windows, Linux, and Unix operating system variants. The simulation component can even be integrated directly with your other planning system components and ERP systems, enabling the possibility of “bolting on” simulation capabilities to your existing systems.

Supply Chain Simulation - Key Modeling Features
In addition to the standard supply chain simulation elements necessary to model a network, such as sites, products, demands, and transportation/supply lanes, Supply Chain Guru has additional capabilities making it the most unique and powerful network simulation technology in the industry. Here are just a few of the many elements and constraints in Guru’s powerful supply chain simulator:

  • Pre-built inventory, sourcing, and transportation policies
  • Incorporate forecasting and demand variability to accurately simulate occasional occurrences and the network respond to them
  • Build custom rules and criteria to simulate expedite processes and handle exceptions like preferred customers, late orders, and seasonal demand spikes
  • Detailed, multi-level BOM support
  • Manufacturing work centers and routings which can model multi-step production and value add processes for far more accurate manufacturing capacity and lead time modeling
  • No coding required, powerful and accurate policy simulation; ability to customize and enhance models with coding capabilities to capture production and inventory planning processes

Supply Chain Simulation - Highlight Application Features

  • Geographical interface and mapping for visualizing results

  • Flow Chart-style interface for an interactive “Business Process” view

  • Table views and access to optimization details for a more in depth investigation into results

  • Batch running of simulations: setup as many as 50 scenarios, then kick it off to run automatically!

  • Model Compare does direct comparisons of all model input and output tables, highlighting what exactly has changed from one scenario to the next

  • Scenario comparison graphs enable direct visualization and comparison of metrics across model databases



Supply Chain Simulation

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