The impact of capacity constraints on supply chain dynamics

Supply chains face varied disturbances which affect their efficiency and customer service provision. An endemic disturbance which has a significant impact on both upstream as well as downstream supply chain operations arises from capacity constraints in one or more echelons. This study uses a dynamic simulation model of the Beer game (four echelon production distribution system) to investigate the impact of these constraints on the dynamics of supply chain variables. Shipping constraints on the distribution echelons (retailer, wholesaler and distributor) and production constraints on the factory are individually applied on the supply chain and the order, shipment and net inventory profiles obtained are explained. Profiles are subsequently clustered to identify cluster membership patterns associated with the location of a constrained echelon in the chain for which a related look up table has been suggested.