A simulation model for Supply Chain ? A case study applied at Tetra Pak Carton Ambient AB, Lund, Sweden, for TP Al TCA Filling Machine

Introduction: To gain competitiveness, industrial focuses are addressed towards product quality improvement, product time compression, costs and lead-time reduction. Nowadays, these diverse goals cannot be achieved by an isolated organizational switch but throughout an aimed supply policy. In particular, an integrated view to manage physical goods and virtual information from suppliers to customers through all steps there between has taken place: this is what is named ? Supply Chain? Managing the Supply Chain has become one of the most important tasks for managers. To support it, simulation tools have been developed. The main advantages are in analysing complex systems and assessing their variations and interdependencies. Problem Tetra Pak Al TCA is a filling machine addressed to emerging Definition: markets into which time to market compression and cost reduction are two imperative issues. The tool should try to figure out: - Which are the best economic orders batches that both satisfy customer demand for TP Al TCA and that reduce the capital tied up from time to time? - Which are the impacts of inventory, safety stock and reduced lead-time in the supply network? Purpose: The purpose of this thesis is to develop a too! to manage a complex supply system flow from raw materials to fished products in order to decrease capita! tied up in the chain, lead-time to market and identify eventual bottlenecks in the flow. Methodology: The report is both a qualitative and a quantitative case study. There is no intention to extend the findings to different companies or different business units within the same company. Information gathering has been done from interviews, internal Tetra Pak's intranet in combination with secondary sources. Information from secondary sources was collected from literature, books, brochures and articles in addition to the internet. Objective: The objectives with the project are: - To build a user-friendly model to be utilized for the analysis of the supply chain - Create and evaluate different scenarios - Eventual indications of improvement areas The desired output is to identify the best economic order quantity to squeeze inventory related costs. Analysis and A simulation program has been developed to imitate the Conclusions: behaviour of the system. This simulation tool, based on Visual Basic for Application (VBA), is able to detect different output scenarios by varying the inputs of the model and assess quantitative values to the related outputs. A further risk analysis by means of @Risk software- aiming at selecting eventual key-improvement area ? has been conducted. The program has been run according to the actual inputs of the chain. The purpose is to assess quantitative value to the importance of few inputs on outputs occurring and to qualitatively evaluate the risk related the actual situation. The suggestions and conclusions of the thesis are: - review of the agreement for few component suppliers; - a uniform distribution for the orders and an order batch of 80% of agreement seem to guarantee the major benefits for the chain, according to inputs given by Tetra Pak Carton Ambient (TPCA); - improvement of forecast for the filling machine, since it affects all the planning activities of the supply network; - the introduction of safety stock in the chain may lead to benefits for the global lead-time. Conversely, it increases the tied up capital and the holding cost, because the level of the inventory is higher. The management should decide which the sought task is. Further the analysis regards only one branch of supply chain for the developments: filling machine and therefore, refers to only one module of the complete filling machine. This is due both to the complexity of fully describing a supply chain of a global company and to the limitedness of time. Anyway, the boundary of the research have been discussed and agreed with Tetra Pak Carton Ambient. A further development could embrace others actors, deliberately omitted in this survey.