IntroductionThe current pandemic outbreak, unlike other types of events, has impacted many firms’ supply and demand with unprecedented consequences. Some faced supply issues due to transportation restrictions or shutdowns at their supplier’s production facilities. Many companies, on the other hand, experienced a sharp increase in demand while simultaneously dealing with a shortage of raw materials. The scope of these effects greatly depends on the characteristics of the industry. This research evaluates the performance of a specific implementation of vendor-managed inventory (VMI) in a case study from a semiconductor company. A multi-period, multi-echelon serial supply chain consisting of the customer VMI warehouse (facing the end demand), the supplier distribution center, and the supplier manufacturing plant was studied with agent-based and discrete-event simulation.
The model concept was implemented in AnyLogic software version 8.7.10, using Rstudio 2021.09.1 for the data analysis. Figure 1 presents the adaptation to the case study of the semiconductor firm, where the Supply Chain Planner (SCP) determined the production quantities (po) and the Customer Logistics Manager (CLM) was involved in the replenishment quantities (re). Due to the implementation of VMI, the customer just pulled material from its warehouse without placing any orders.
Model concept representation of the case study at the semiconductor company
This study contributed to the field of supply chain disruptions by first using empirical research methodologies based on a case study and experts’ interviews, which always measure causal relationships in the system.
Through simulation modeling, this research highlighted the interactions of key system parameters in a disruption phase under different scenarios. The results highlighted the importance of clear communication between the VMI partners when facing limited supply.
Likewise, replenishment processes based on reach have proven to be a bullwhip effect generator factor when an unforeseen event completely stopped the demand pull at the VMI warehouse, leading to inventories building up for the upstream member.