What is System Dynamics?
System Dynamics is a methodology for studying and managing the entire supply chain, not from the perspective of just one of the entities involved, but as a whole, understanding the basic structure of the entire system.
From the manufacturing of a product to its sale to a final customer, there are usually four entities involved in a supply chain, as seen above. The retailer orders from the wholesaler, who orders from the distributor, who orders from the manufacturer. What this really means is that there is a major lack of communication of the "big picture" because everyone is busy protecting their "turf." For example, the wholesaler doesn't want the distributor to talk with the retailer because he's afraid he'll get shut out of the loop. So what's the result? Either excess inventory tying up valuable assets, or stock-outs. The supply chain is interrupted, and every entity in the cycle is negatively impacted. And what happens to the final customers? If they can't get their product from you, they'll go elsewhere, and you may not be able to get them back!
Understanding the Impact of System Dynamics is designed to help everyone in the supply chain to understand the importance of having all entities communicating and understanding the needs of the final customers, not just those in the next phase. We will use the Beer Distribution Game to identify the basic problems that exist in a supply chain. This game will clearly show that fluctuations in demand at the final customer stage are amplified the more one goes 'upstream,' causing what's called a "Bullwhip Effect."
Who should attend?
General managers, production schedulers, inventory planners, replenishment schedulers, operations managers, and anyone else involved with any of the four entities in the supply chain. Invite your downstream customers and suppliers to come with you - together you will improve your efficiency and profitability!
What will you learn?
1. The importance of all of the entities communicating directly, clearly and accurately with each other
2. The impact of the lack of communication among the parties, and why it causes excess inventories or stock-outs.
3. How to draw your customers and suppliers into this approach for more efficient manufacturing and supplying.
4. The tools necessary to implement and begin controlling the dynamics negatively impacting your present system.
