Optimizing Supply Chains Through System Dynamics Modelling and Simulation

In critical activities and organizations, decision making in the face of complexity has been a growing normal. Complexity troubles humans due to cognitive limitations. Moreover, humans are merely able to understand cause-and-effect relationships that are close in time and space, not the paradigm of many complex socio-technical systems. Decision-making processes shall rely on models that help harness a problem´s associated complexity – among them the dynamics of supply chains. Models typically fall into two broad categories: mental and formal models. Supply chains are complex systems, which may exhibit complex behaviour patterns. Decisions and policies within organizational systems are the causes of many problems, among them undesirable oscillations and other problematic patterns of the parameters of interest. A system is a grouping of parts that work together for a purpose. Hence, the systems dynamics methodology is an adequate approach to deal with fuel supply chain management. A model was developed that helps manage marine gasoil supply chains in the context of the navy.