31 A Scenario Simulation Methodology for Re-engineering Potential Assessment J-M Lehtonen, K. Marttila Helsinki University ofTechnology, TAl Research Centre Po. Box 9555, 02015 Espoo, Finland Tel: + 358 9 451 1,fax: + 358 9 451 3665 email: jmlehto@tuta. hut.fi, kmartti@tuta. hut.fi Abstract The research objective of this paper is to experiment the applicability of scenario simulation methodology in a paper industry distribution problem. The methodology proved to be able to assess the re-engineering potential by producing quantifiable results for the performance measures. The methodology itself does not provide optimal re-engineering actions. Its function is to assess the improvement potential of re-engineering actions derived elsewhere. Keywords Simulation, modeling, logistics 1 SIMULATION AS A RESEARCH METHOD IN LOGISTICS Today, the use of discrete event simulation as a research method is commonplace in logistics research. In fact, the importance of simulation can be described by the viewpoint that there are three pillars in scientific and technology research; analytic methods. experimental methods and numerical simulation (Strandhagen, 1994). According to Bowersox (1986), the main advantage of discrete event simulation in logistics is that it incorporates the impact of time into performance evaluation. Hoover and Peny 0989) view simulation as a powerful problem solving method. According to Mott and Tumay ( 1992), simulation is a thorough and economic way Computer Applicati0111 in Production and Engineering. F. Plonka and G. Oiling (Eds.) C 1997IFIP. Published by Olapman & Hall