Supply Chain Studies Simulation
Supply Chain Studies Simulation
Case Study:
Client Challenge
A leader in the lithium and lithium derivatives industry, which is experiencing high growth due to the demand for electric car batteries and renewable energies.
To capitalise on the rapid growth of this industry, they are in the process of expanding their logistics and warehousing footprint which extends from Australia to China.
In an effort to capitalise on the rapid growth of this industry, the client was in the initial stages of planning the expansion of its supply chain. With lithium demand expected to increase drastically in the coming years, the operation is looking to expand its production capability and associated supply-chain.
To do so efficiently, it is important to:
- understand working capital requirements,
- validate the inventory capacities and locations throughout the entire value-chain,
- confirm logistics fleet sizing and operational procedures,
- identify potential bottlenecks,
- and test different 'What-If' scenarios designed to ensure the supply meets demand.
Ultimately, they wanted to know what opportunities for improvement exist for material movement across the supply chain?
The Solution
BSC successfully addressed the client’s challenges by developing a dynamic simulation model that replicated the concentrate value chain, including loading, offloading, transit, system inventories, operating strategies and production / consumption profiles.
This simulation was then used to measure key performance drivers such as working capital and stock-out risk. The simulation was also used to assess the capability of the supply chain and to test specific scenarios of interest.
Solution Value
The insights derived from the simulation confirmed the ability of the expanded lithium concentrate supply chain to meet consumption demands. For the first time, the simulation quantified the duration of working capital and established the ideal storage capacity for the key warehouse in the system.