Applying Goldratt's Theory of Constraints to reduce the Bullwhip Effect through agent-based modeling
Authored by Jose Costas, Borja Ponte, la Fuente David de, Raul Pino, Julio Puche
Date Published: 2015
DOI: 10.1016/j.eswa.2014.10.022
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Abstract
In the current environment, Supply Chain Management (SCM) is a major
concern for businesses. The Bullwhip Effect is a proven cause of
significant inefficiencies in SCM. This paper applies Goldratt's Theory
of Constraints (TOC) to reduce it. KAOS methodology has been used to
devise the conceptual model for a multi-agent system, which is used to
experiment with the well known `Beer Game' supply chain exercise. Our
work brings evidence that TOC, with its bottleneck management strategy
through the Drum-Buffer-Rope (DBR) methodology, induces significant
improvements. Opposed to traditional management policies, linked to the
mass production paradigm, TOC systemic approach generates large
operational and financial advantages for each node in the supply chain, without any undesirable collateral effect. (C) 2014 Elsevier Ltd. All
rights reserved.
Tags
Management
Supply chain
systems
information