eThesis - School of Business electronic theses

The objective of supply chain management is to optimize the performance of the whole supply chain. It means that every company should seek improvements to optimize the entire supply chain rather than sub-optimize their own performance. This trend has led to a new kind of competition scheme on the global level; the competition is no longer company versus company but rather supply chain versus supply chain. Due to complexity of decision making in supply chain network, there is a definite need for IT-enabled modelling tools that can help to identify and innovate strategies for designing high performance supply chain networks.

The target of the modelling is to gain a better understanding of the system complexity and to predict system performance in the future. In the field of supply chain management, many of the modelling tools could be used. However, there are also several obstacles hindering the implementation of the IT-enabled supply chain modelling tools. These obstacles include issues like: high integration costs, risk of lost investments, need for long-term commitments, trust, and confidentiality of the data and information. Therefore many of the supply chain modelling studies are usually carried out with limited scope by one company only. One way of coping with these issues is to use external companies like logistics service providers to model the supply chain networks and execute supply chain modelling systems.

The aim of this thesis is to study how IT-enabled modelling tools could be exploited when modelling different supply chain scenarios without implementing too sophisticated, expensive and integrated systems. And, as a secondary target, how a 3PL / 4PL operator could be utilized in designing a new or redesigning the existing supply chain network structure. The contribution of the study lies in two points; 1) supply chain network modelling without expensive integrations, and 2) wide perspective that is not limited in one company only, but takes the whole supply chain network into account. The methodology applied for this thesis is the case study methodology.

Theory part of the thesis establishes a firm base for the empirical part of the thesis. An empirical case study was constructed to answer the research problem. In the case study, the supply chain between two collaborating companies was modelled by using the simulation software. Also different scenarios for supply chain design were simulated. Data gathered for this purpose was mainly quantitative. The secondary objective was fulfilled by analyzing supplementary qualitative data from the case study, e.g. interviews, observations, and everyday discussions.

It can be concluded that the IT-enabled modelling tools can be very easily and efficiently exploited when modelling different supply chain scenarios. The most important issues in modelling are the confidence towards the model in question and the quality of data used. Using a 3PL / 4PL operator in designing a new or redesigned supply chain network is not only possible but also a very good solution for companies that do not want to implement sophisticated, expensive, and integrated modelling tools - at least without first gaining the experience from modelling.