Goldratt Mining Supply Chain Simulation

This simulation model was constructed as a generic Mining Supply Chain for a fictuous company called NewCo, representative of a general mining supply chain. The simulation is not a direct replica of any of the real world supply chain configurations, but a generic model that aims to balance ‘simplicity’ and ‘reality’ to emphasize specific learning points. In addition, the simulation does not intend to suggest a specific formula for the success for managing a mining supply chain, but instead, aims to be a catalyst for NewCo management teams to explore the sometimes hidden dynamics and interdependencies of a full mining
supply chain, to test the impact of different strategies and tactics on supply chain profitability and productivity, to better understand the challenges and trade-offs at various links to ensure global rather than local optima and (as importantly) to provide a fun experience to discover such learning outcomes.

The NewCo strategy is to focus on value versus volume, with the goal to generate free cash flow. Traditionally resourcing companies have been focussing on 100% asset utilization - using essentially a PUSH tactic – Mines producing as much as they can and Marketing selling whatever the mines have produced at market prices. This tactic, together with constant debottlenecking efforts, have resulted in a relatively balanced mining supply chain that can result in moving bottlenecks and difficult to predict performance. NewCo Management not only has to contribute to “low-cost” by optimizing costs under their control, but also ensure that NewCo lives up to its promise to be reliable in meeting all commitments to both contract and spot sales customers. Your challenge is to see if you can accurately predict, from the capacity information provided for each link, what commitments can be made to contract vs spot sales customers, and if there are other ways to further improve productivity, reliability and profitability performance while still meeting a 20% ROI for those changes that require investment.