Study On Supply Chain Management Based On System Dynamics

Along with the speeding up of the progress of economic globalization and the fierce development of science and technology, today's market competition is gradually vigorous, and the present competition will be the competition among the supply chains. And accompanied with the working up and consummating of our country's market economy system and modern enterprise system, the local enterprises are confronted with the same competition which presents the internationalization and holistic trend. For the sake of getting space of survival and development, the enterprises have to break the traditional restriction of region, industry and thinking. They must attach importance not only to the internal production process management in their enterprises, but also to the inside and exterior resources of the whole product life cycle, and to the management of colleagues' cooperation. They must buildup high efficient supply chain by encircling their own kernel ability to seek the symbiosis and total wins of all the supply chain members in the market. But the integrated system ifo of supply chain management haven't come into being yet, there are still many crux problems needed to be further explored and investigated, such as the target conflict phenomenon in the supply chain management, the matching and harmonizing problem in supply chain management, the bull whip effect of supply chain, and the environment amity problems. Under this kind of circumstance, this thesis employs the system dynamics, which is an excellent theory for researching dynamic behavior of complex system, to research the supply chain's bull whip effect problem; closely related inventory management problems and green supply chain problems form the angle of qualitative analysis and fix quantified simulation. The author is trying hard to make this study systematization and thoroughness, enabling the research contents and conclusions could be applied effectively in the practice of supply chain management.In chapter 1, some complicated problems in supply chain pratices are discussed and it is put forward that there are some aspects worthy of further discussion including target conflict, matching and harmonizing, bull whip effect and environment amity. System dynamics can be used to model the complicated supply chain system, to analyze the system from macroscopic qualitative view and microscopic quantitative one by means of simulation, and to get structure improvement and indexes optimization.In chapter 2, the structural categories of supply chain is analysed, as well as the main methods to supply chain management, the measures and classification to supply chain modelling. Based on the theories, characteristics and modelling rules of system dynamics, the dynamic behaviour patterns of the typical one echelon and two echelons systems are used to analyse the modelling principles of system dynamics. Then, the system dynamic models of simple inventory management and supply chain system are constructed and simulated.Bull whip effect is involved in chapter 3. The relationship between supply chain structure and bull whip effect is discussed, as well as the negative influence of the latter to the former. By means of control and prediction theory on the bull whip effect in supply chain, the basic quantitative research is carried out to get mathematical formula of bull whip effect, and then, it is extended to the multi-echelon supply chain models, used to discuss the influence on bull whip effect exerted by retailer's stock up time, basic data observation periodicity, and correlation coefficient, smoothness coefficient. According to the inner procedure, structure and characteristics of multi-echelon comprised of manufacturers, distributers and retailers, the three echelon supply chain system dynamic models are constructed, tested, simulated and ameliorated to get improved ones. In the dynamic simulation under different demand conditions, it is analyzed that the dynamic behaviour of the whole supply chain system, behavioural influences of all levels' members and the causes to bull whip effect. Two system dynamic models are constructed under different demand conditions, changing with time and changing randomly respectively, based on which, the formula of bull whip effect are defined to compare the demand fluctuation magnifying of all levels' members in supply chain, and to analyse the influence of delay on bull whip effect.Chapter 4 is mainly about inventory. For a supply chain made up of distributors, retailers and final customers, system dynamic models are constructed using traditional inventory management methods, which are tested and simulated. Dynamic simulation of models under random demand conditions is used to analyse the dynamic behaviour of main variables such as inventory and demand in distributor and retailer loop, within which the order forms' accumulation is compared. It can be concluded that using traditional inventory management methods can cause serious bull whip effect by comparison of the simulation results. The bull whip effect is inherent with the supply chain system's structure and inevitable in application of traditional inventory management, the inner characteristics of which can be dealt with by way of system structure analysis and inventory management innovation. Three strategies are analysed, including Vendor Managed Inventory, Joint Management Inventory, and Collaborative Planning, Forecasting & Replenishment. Based on a system comprised of vendors, manufacturers, distributors, retailers and final customers, system dynamic models with supply chain inventory management patterns are constructed, tested, simulated, and proved valid. After simulation under different demand conditions, including sudden changing, time changing and random changing, the dynamic behaviour of the whole system is analyzed, and the variables such as the partners' inventory and demand are compared reciprocally and with the simulation results in chapter 3 by examination of the results, bull whip effect formula of different partners are defined and calculated, whose values show that the bull whip effect of supply chain inventory management models is much less than that of traditional ones, and the models have more advantages. It also demonstrated again that the means to reduce bull whip effect is system structure analysis and inventory management innovation.In chapter 5, green supply chain, its difference with traditional supply chain, and the causes and difficulties in practice are discussed. The objective system is traditional supply chain but with much focuses on recycler of waste products and remanufacturer, this chapter comprises a multi-echelon closed loop supply chain system, system dynamics models for which are constructed, tested and prove valid. In dynamic simulation of models under different demand conditions including sudden changing and random changing, the dynamic behaviour of the whole green supply chain is analysed, as well as the influence of the reclaim ability of manufacturers on the whole closed loop. Under sudden changing demand conditions, dynamic simulation of different reclaim strategies of manufacturers in green supply chain show the reciprocal influence and dynamic behaviour patterns of the variables such as the reclaim ratio, the reclaim quantities, the re-manufacture ratio, the new product ratio and the green image of enterprises. Causes for different dynamic behaviour patterns are analyzed thoroughly.