Dynamic Evaluation of Production Policies: Improving the Coordination of an Ethanol Supply Chain

 

M.A. Rendón-Sagardi¹, C. Sánchez-Ramírez*¹, G. Cortés-Robles¹, G. Alor-Hernández¹ and L.A. Moncayo-Martínez²

 

¹ Division of Research and Postgraduate Studies, Instituto Tecnológico de Orizaba, Av. Oriente 9, 852. Col Emiliano Zapata, C.P. 94320. Orizaba, Veracruz, Mexico.

² Department of Industrial and Operations Engineering, Instituto Tecnológico Autónomo de México (ITAM), Río Hondo No. 1, Col. Progreso Tizapán, C.P. 01080 Mexico City, Mexico. *csanchez@itorizaba.edu.mx

 

ABSTRACT

This paper uses System Dynamics modeling and process simulation to explore coordination in two logistic processes (procurement and production) of the supply chain of an ethanol plant. In that sense, three production scenarios are evaluated to identify: a) stock movement according to current inventory policies, and b) the critical variables affecting the coordination for these two processes. Since the main goal in the company is to meet customer demand, this research incorporates sales forecasting, and four performance indicators to evaluate the state of the processes: 1) average percentage of demand satisfaction, 2) maximum amount of ethanol in excess, 3) available ethanol at the end of the year, and 4) inventory costs. To model the case study, the change in production yield and specific constraints for the chain are considered. The simulation results show that System Dynamics modeling can be used to observe the effects of policies on inventory, and meeting the demand in a real system. It also can define the coordination for a supply chain and give information to improve it. The developed model uses STELLA® software to simulate the logistic processes and execute the evaluation employing the performance indicators.

Keywords: supply chain, system dynamics, procurement, production, ethanol plant.

 

RESUMEN

Haciendo uso del modelado en Dinámica de Sistemas y simulación, se explora la coordinación de dos procesos logísticos (aprovisionamiento y producción) de la cadena de suministro de una alcoholera. En este sentido, la evaluación de tres escenarios de producción permite identificar: a) el movimiento del inventario de acuerdo a las políticas actuales de inventario, y b) las variables críticas que afectan la coordinación de estos dos procesos. Dado que el objetivo principal de la empresa es satisfacer la demanda del cliente, se incorpora un pronóstico de ventas, y cuatro indicadores de desempeño para evaluar el estado de los procesos: 1) el porcentaje promedio de la satisfacción de la demanda, 2) la cantidad máxima de etanol en exceso, 3) el etanol a disponer al finalizar el año, y 4) los costos de inventario. Para modelar el caso de estudio, se considera el cambio en el rendimiento de producción y las restricciones particulares de la cadena. Los resultados de la simulación muestran que la Dinámica de Sistemas puede utilizarse para observar los efectos de las políticas sobre el inventario, y la satisfacción de la demanda en un sistema real, igualmente, permite definir la coordinación para una cadena de suministro y proporcionar información para mejorarla. El modelo creado utiliza el software STELLA® para simular los procesos logísticos y para realizar la evaluación utilizando los indicadores de desempeño.

 

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Acknowledgment

The authors wish to thank the National Council for Science and Technology in Mexico (CONACYT) and the Asociación Mexicana de Cultura, A.C, This work was additionally supported by the General Department of Technological Higher Education (DGEST) and the Secretariat of Public Education in Mexico (SEP) through PROMEP.

 

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