Supply Chain Simulation to Test Theory of Constraints Implementation for Macmillan Publishing

Development of continent-wide books supply chain simulation model for MacMillan Publishing House. The objective of the project was to investigate the extent, consequences and causes of surpluses and shortages of their titles within retailers and their own DCs. The model was also used to quantify the potential impact of moving to a Theory of Constraints (TOC) best practice for managing inventory and determining print quantities.
Period: June 2018 – November 2018
Industry sector: Wholesale and Retail
Client / Partner: MacMillan Publishing / Goldratt Research Labs

Project objective
  • Investigate the extent, consequences and causes of surplus and shortage of inventory in the publisher’s own warehouses, as well as in the warehouses of retail stores

Our scope of work

  • Taking part in setting up the modeling problem
  • Development and verification of a simulation model using our supply chain simulation platform
  • Technical and methodological support of scenario analysis using the model

Simulation model inputs

  • Geographical location and capacity of retailers’ and own DCs
  • Forecast of demand for finished products
  • Historical data about stock, demand and costs in supply chain

Simulation model structure elements

  • Input data file of scenario in MS Excel format
  • Simulation model with interactive presentation
  • Data aggregation module that allows to generate MS Excel files with the simulation results

Simulation model outputs

  • Service level of supply in percentage terms
  • Stock movement in own, distributors’ and retailers’ DCs
  • Materials turnover in all links of supply chain

Project result

  • Simulation model of book output supply chain that allows to determine the extent, consequences and causes of surpluses and shortages of stocks
  • The model was also used to quantify the potential impact of moving to a Theory of Constraints (TOC) best practice for managing inventory and determining print quantities

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