Simulation
New Realities in Business
- The new reality is increasing product complexity and sharply higher demand variability.
- High demand variability has rendered traditional S&OP ineffective for assessing
the impact of demand "what if's" on inventory and capacity.
- In fact, traditional methods will calculate much higher inventory than your supply
network requires.
- Simulation modeling, which readily models highly variable demand, is now a practical
and accurate demand and inventory modeling methodology.
Simulation Modeling is the Answer
- Distinctly Demand Pull
- Remarkable Improvement in Accuracy
- Required for a Demand-Driven Firm
- Augments SAP, Oracle and others as firms move to become Demand-driven
ISM by OPG Correctly Models:
- High Demand Variability
- Seasonality
- Promotions
- What-If Demand Plans
Fatal Flaws in All Traditional Models:
(MEIO, APO, ERP, MRP, DRP, etc.)
- Assume Infinite Capacity
- Simple Lead Time with Simple Variability
- Push Inventory to Safety Stock
- Simplistic Demand Variability
- Cost OPtimized (Service is Not Modeled)