A SIMULATION STUDY OF LOGISTICS AND MANUFACTURING ACTIVITIES IN AN AUTOMOBILE SUPPLY CHAIN Maziar Gholamian Moghadam a Behrooz Karimi b Mohamad Darayi c a Amirkabir University of Technology, Tehran, Iran, +989121712485, maziar.moghadam@yahoo.com b Amirkabir University of Technology, Tehran, Iran, +982166413034, B.Karimi@aut.ac.ir c Tarbiat Modares University, Tehran, Iran, +989131047152, mohamad.darayi84@gmail.com Abstract This article studies an application of discrete-event simulation (DES) combined with multi-criteria decision analysis (MCDA) to study manufacturing procedure integrated with logistics activities in an automotive supply chain. Automotive Industries Development Pressed Components Company (AIDCO PRESS) as an important supplier is linked to IRANKHODRO CO, a distinguished automobile company at Iran, by a web based inventory management system implementing Kanban philosophy. AIDCO PRESS’s inefficiencies in responsiveness to the received Kanabns from IRANKHODRO CO endanger the automotive supply chain’s agility, and also threaten its future role as a reliable supplier. DES modeling approach is used to analyze such a complex system in order to determine the causes of lateness in receiving the requested parts by IRANKHODRO CO. Consulting with the executive and plant managers, improvement scenarios are defined in order to obviate the inefficiencies’ origins, and then MCDA methodology considering responsiveness, cost and utility criterions is pursued to find the best scenario. Collectivity of the studied problem together with the reality nature of the case distinguishes this paper from the decision analysis studies in the automotive supply chain literature. Keywords Automobile supply chain, Discrete-event simulation, Multi-criteria decision analysis, IRANKHODRO CO, AIDCO PRESS 1. INTRODUCTION In the automobile industry, the competitiveness of manufacturers depends on the responsiveness of their supply chains. Inefficiencies such as long cycle times, shortages and logistical deficiencies across chains threatened the competitiveness of the whole automobile supply chain. Implementing lean philosophy is pursued by the managers of some automobile supply chains in order to improve and sustain the stability of their systems in the changing business world (Ambe and Badenhorst-Weiss, 2010). Kanban cards are popular inventory management tools in lean supply chains which help manufacturers to control their suppliers. Studying and analyzing suppliers’ inefficiencies in response to the manufacturers is a complex problem, since production related activities and logistical procurements must be considered concurrently. Simulation modeling as a what-if analysis tool can handle the complexities and randomness in such a problem (Gunal, 1998; Terzi and Cavalieri, 2004). IRANKHODRO CO as a manufacturer in an automobile supply chain controls suppliers by a web based inventory management system using Kanban cards. AIDCO PRESS as a supplier of press products has unacceptable tardiness in response to the manufacturer’s released Kanbans. In this study, modeling 175