Applicability of simulation analysis for planning agri-food supply chains : A case study at a Swedish farmer-owned cooperative

Abstract: Agri-food supply chains (ASCs) are becoming increasingly complex, and its actors are in need of sophisticated planning tools to remain competitive in an industry that have been moving away from small individual actors towards large multi-national, highly vertically integrated cooperatives. This case study views reality from an objectivist point of view and utilises a positivist approach to study this reality. It combines qualitative and quantitative methods to study an ASC operating in the Kingdom of Sweden. This ASC’s planning processes are investigated in order to identify processes that are applicable to simulation by considering model verification, validation, and credibility.    The simulation model allowed for system analyses from a strategic perspective and, hence, simplified the planning process of evaluating different scenarios. The model was intrinsically verified and validated in consultation with the supervisor and subject reader and was thus able to accurately imitate the real-world system. The simulated scenarios comprised changes to the ASC’s infrastructure or design. The changes, in turn, comprised decommissions of one or more port-site storage facilities (HPs). Questions that were asked during the evaluation of the experiment results included what happens to the inventory levels of the non-decommissioned HPs when certain ones close? will the demand still be met? and if, then where, will queues arise in the system? It is shown that the non-decommissioned HPs will manage the closed HP’s volumes, but only to a certain extent. One closed HP does not cause severe problems, while two closed ones can create queues, which, in turn, will result in lower than desired inventory levels at the end of the harvesting period. Queues will arise from the closing of just one HP, although this queue is practically negligible, but as two are closed, the queues will create problems. The demand was able to be met even though an HP was closed, but to meet it while two HPs are closed, one of the non-decommissioned ones’ capacity must be increased. This, ultimately, generated or achieved for the host organisation a so called proof of concept (this is argued to generate credibility in the model). Some of the identified characteristics of their ASC are considered generic, while others can only be claimed to be specific the studied ASC. The study thus claims to have initiated a framework for the differentiation of strategic, tactical, and operational planning levels in an ASC.