What Is Supply Chain Simulation?  

Supply chain simulation is a modeling technique that evaluates the performance of an existing or proposed supply chain design. This method captures the detailed business rules and interactions within your supply chain and how it operates at a granular level. 

Designers and organizations use simulation to describe or predict how KPIs including (but not limited to) cost, service, and risk would respond to changes in the supply chain’s design. Unlike other methods, simulation provides detailed, time-phased insights about supply chain performance and allows for incorporating variability and uncertainty.   

Simulation doesn’t tell supply chain designers what to do. It doesn’t make abstractions like traditional optimization. Instead, it predicts performance in response to changes in supply chain design. Simulation is the closest digital model to your actual supply chain.  

What Solutions Does Supply Chain Simulation Provide for Supply Chain Design? 

The practice of supply chain design involves proactively designing and testing potential changes to supply chain structure and policies. Supply chain simulation helps you answer your “what if” design questions, test new design ideas, and empowers you to make data-driven design decisions. 

Supply chain simulation provides the foundation for generating insights and executing studies like the following:  

1. Inventory Analysis

Understanding your inventory’s volume, storage, and flow is central to an effective supply chain design. Simulation allows you to complete an inventory analysis that helps you evaluate your current policies and make changes for a more balanced approach.  

Within your inventory analysis, simulation helps answer the following:  

How much inventory is held in the network over time? At each facility? 

Other supply chain design modeling methods don’t capture daily or sub-daily inventory levels, but simulation can. Take advantage of detailed simulation results to identify inventory trends at varying levels in your supply chain. 

Which facilities and products tend to stock out? How often? 

Maybe you’re accumulating excess inventory in one location and lacking inventory in another. Supply chain simulation enables you to identify when and where stockouts are likely to occur, empowering you to take proactive measures to avoid them and test contingency plans. 

How should you set inventory targets to maintain sufficient stock while balancing cost and service?  

Effective supply chains balance cost, service, and risk. Cosmic Frog’s simulation technology can be used identify improved inventory targets, guided by your unique goals and priorities.

2. Service Analysis

Unlike some modeling methods, simulation does not require abstraction and aggregation to maintain computational tractability. Supply chain simulation models are driven in large part by customer orders placed (and due) at specific times in the model horizon rather than aggregated demand; in turn, simulation provides detailed time-phased outputs that enable you to analyze service all the way from the network level to the customer, product, and order level.  

Simulation answers the following questions during a service analysis:  

• At the network level, what percentage of customer orders are filled on time and in full? Late? Lost? 

• Do any customers have poor service despite satisfactory network-level service?  

• What are the service implications of introducing or adjusting customer prioritization?  

• How does a temporary facility shutdown impact service? How effective are associated contingency plans? 

3. Model Operational Detail

Simulation allows you to identify inefficiencies and proactively build resiliency into your supply chains. It gives analysts the information needed to answer capacity and operational process questions like these:    

• Where do bottlenecks occur within the supply chain? How are KPIs (cost and service) impacted if daily capacities of key operations are increased?  

• If operations within a facility are redesigned, how is the facility’s performance impacted? Are there implications for inventory levels? Will it impact service and cost?  

4. Supply Chain Resilience

Resiliency is an often-overlooked aspect of supply chain design. Cost and service are typically prioritized, with resilience a non-priority until disruptions bring supply chains to a halt.   

Simulation is unique among supply chain design methods because it allows you to inject uncertainty into your model via input data variability. This empowers you to explore disruptive scenarios and understand the impact of variability in customer order behavior, transit times, processing times, supply, etc., on performance.  

You can run many replications of a simulation model, observe as the variability plays out differently each time, then evaluate performance across the resulting range of outcomes to identify weak points in the supply chain. How might the supply chain perform on average? In the worst case?

5. Detailed Cost Metrics 

Because simulation operates at the order and shipment levels, designers can perform detailed cost analyses. Thanks to its ability to handle detailed model inputs and track transactional activity, simulation enables more accurate cost accounting than some modeling methods. 

Simulation allows you to explore how changing business rules and policies and fluctuations in demand will affect your costs (and service). Sim provides a digital modeling environment where users can answer those questions and understand the impact on their supply chains.  

Cosmic Frog Simulation Key Features and Benefits 

The right simulation technology can make or break your supply chain design. Cosmic Frog brings the brightest minds in the industry together to build our simulation platform, a tool that outperforms every other software on the market.  

Below, we explore Cosmic Frog’s simulation key features and benefits. Read on to learn what makes us different and how our sim tool is the design solution you’ve been looking for.  

1. Push System Modeling 

Typical supply chain simulation revolves around pull-based systems wherein you pull inventory forward, neglecting push-based systems. Cosmic Frog excels in both pull- and push-based systems. 

2. Fully Pythonic 

While Cosmic Frog has everything you need to build complete, balanced simulation models, the underlying engine is fully Pythonic. Users can extend our models by writing their own custom Python code to add logic, rules, or policies to meet unique needs or requirements.  

3. Cloud-Native Platform 

Cosmic Frog’s entire platform is cloud-native, meaning there are no extra steps required to run your models on our computing resources. 

Some competitors have a cloud version of their solution, but it’s not cloud-native or user-friendly. Optilogic offers a seamless process for supply chain simulation, from building models to running scenarios and replications simultaneously. Cosmic Frog models are run in the cloud, leaving you free to dedicate your local computing power to other tasks or shut your laptop until your model runs complete. 

4. Modeling Engines Built Using the Same Data Schema 

Cosmic Frog hosts different modeling engines built on the same data schema which are runnable from the same location, allowing you to use different methods in a complementary way.  

For example, you can use optimization to design your supply chain, then combine the resulting recommendations with supplemental data to simulate and test your new design. Cosmic Frog offers both optimization and simulation (along with other engines) to deliver a complete supply chain design solution to meet your organization’s supply chain needs.  

How to Run a Simulation in Cosmic Frog 

The steps are simple, and you can start right now with the data you already have.  

1. Create a Free Account

First, create your free Cosmic Frog account. Unlike other platforms, you can try Cosmic Frog before you commit. You’ll have access to hundreds of resources to help you get started.  

2. Explore the Cosmic Frog Resource Library 

Our expansive resource library has everything you need to understand our platform, the ins and outs of supply chain simulation, and its place in supply chain design.  

3. Copy a Simulation Template 

You can build a model from scratch or easily copy a simulation model template from our resource library. Once the model is copied to your account, open it and explore various inputs.  

4. Input Known Data 

Data for simulation includes facility locations, transport modes, customer location, order frequency, etc. Once you’ve input your base data into your model, build and run scenarios to see how different factors and variables affect your supply chain. Remember: you don’t need a perfect or complex model to get started gaining valuable insights; you can edit a simulation model template in the Optilogic Resource Library to fit the needs and use case of your business and give the model a run to test. 

5. Engage and Learn on Frogger Pond Community 

Smart supply chain design is a continuous process that functions best with the help of collective expertise. Cosmic Frog’s online Frogger Pond Community allows you to engage with the supply chain experts at Cosmic Frog and other users on the platform. The community provides a space for you to ask questions and receive valuable feedback that helps you make effective supply chain design decisions for your organization.

Take the Leap with Cosmic Frog  

Supply chain design simulation opens a world of opportunity for designers and their organizations. You can get started with a simple simulation model today! Starting from one of our example models, you can identify gaps in your current design and build a supply chain that is ready for whatever disruptions might occur.