A simulation study to assess the impact of Internet in the supply chain management

The Internet offers a set of interesting opportunities which go far beyond simple communication aspects, and may have an important impact on the way companies design, manufacture, distribute and service their products in the future. In order to improve customer service and cost of operations, nowadays Supply Chain (SC) experiment an increasing need of a better coordination among its members. This coordination is now, with the Internet, more feasible, and can be translated into process and functions integration within these organizations and along the entire SC. This paper assesses the possible impact of the new communication technologies on the performance of a generic SC. A simulation study has been accomplished in order to conceptualize the integration process that could take place in the SC, and to measure improvements in SC flexibility as a consequence of a faster and shared information flow. The paper presents results for a sample model built for a particular supply chain in the electronic components business. These results show orders of magnitude of the improvements in terms of operational and financial metrics.