Authors: Ingrid Levana Gunawan; Togar M. Simatupang
Addresses: School of Business and Management, Bandung Institute of Technology, 10 Ganesha St., Bandung 40132, Indonesia ' School of Business and Management, Bandung Institute of Technology, 10 Ganesha St., Bandung 40132, Indonesia
Abstract: This research aims to develop a process simulation model for determining the best possible business solutions to improve order fulfilment in manufacturing products and in reducing stock-out in a regional distribution centre. The common practice in the pharmaceutical industry often overlooks the importance of demand information sharing that enables the integration of distribution planning and control. On the basis of a case study in a national pharmaceutical company, it was found that a number of regional distribution centres failed to achieve the target of order fulfilment due to stock-out. The stock-outs were caused by the insufficient capacity, improper forecasting method, and incompliance between the sales forecast and information sharing. Monte Carlo simulation was adopted to assess the optimal operational performance for the company under different scenarios. An appropriate option was selected based on better order fulfilment and the lowest reduction in both the stock-out and relevant cost.
Keywords: supply chain management; SCM; pharmaceuticals; pharmaceutical products; product distribution; order fulfilment; information sharing; Monte Carlo simulation; stock-out reduction; regional distribution centres; case study; capacity; sales forecasting.
International Journal of Integrated Supply Management, 2014 Vol.9 No.1/2, pp.74 - 93
Available online: 14 Aug 2014 *Full-text access for editors Access for subscribers Purchase this article Comment on this article