Proceedings of the 2002 Winter Simulation Conference E. Yücesan, C.-H. Chen, J. L. Snowdon, and J. M. Charnes, eds. ABSTRACT Factory operations have been modeled for years to under- stand the relationship between the different design and pol- icy factors and the performance measures of interest. The increasing awareness of the need to manage factories as a link in the supply chain places a corresponding require- ment for an enhanced approach for factory modeling. This paper describes the modeling of a computer assembly fac- tory for supply chain integration by including aspects of inbound and outbound logistics and relevant business processes. Lessons are drawn based on the experience. 1 INTRODUCTION In the current world of global manufacturing, it is no longer a manufacturer competing against other manufac- turers. A manufacturer can become highly efficient within its own four walls of manufacturing, but that does not guarantee a good performance in the market or even its survival. It has to ensure that its suppliers are efficient, both in cost and in the delivery of components to its logis- tics providers. It has to ensure that its logistics providers are able to sustain the right level of responsiveness at a competitive cost. It has to ensure that its products are effi- ciently carried on to its direct customers and then on through the successive stages until it reaches the end user customers. Indeed the manufacturer, the suppliers, the logistics providers have to jointly work together to get the products to the end-user customer efficiently and cost ef- fectively. They have to integrate together as a supply chain and compete against the other supply chains provid- ing competitive products. Progressive manufacturers have been using discrete event simulation modeling for supporting the design, analysis and operation of factory operations for a long time. Simulation modeling has proved valuable as a test bed for evaluating alternate designs and policies under widely different environments. To compete effectively, companies had realized several years ago that the use of simulation modeling was required for supporting any large new development or enhancement of the manufacturing facilities. They utilized simulation to iteratively develop and verify that proposed systems and policies will help them achieve their business objectives. It was used to de- termine that their manufacturing systems can deliver the responsiveness at the costs that they need to compete. With the competitive frontier now moving to supply chain integration, the manufacturers need to ensure that their operations integrate well into the supply chains. Simulation can be effectively used to model supply chains. Jain et al (1999) report on use of simulation for studying semiconductor manufacturing supply chains. Some indus- try applications of supply chain simulation have been re- ported (see for examples, Chatfield, Harrison and Haya 2001, and Parsons and Siprelle 2000). It is noted that most of the current applications are at a high level, intended to determine parameters that help achieve the overall supply chain performance goals. These could include the deter- mination of the inventory levels at various stages in the supply chain to meet a desired service level, or the verifi- cation of the design of new business processes and systems for the supply chain and their ability to help achieve the targets of key performance measures (Jain et al 2001b). The high level supply chain simulations have benefited the users significantly. The benefits can be appreciably in- MODELING COMPUTER ASSEMBLY OPERATIONS FOR SUPPLY CHAIN INTEGRATION Sanjay Jain Center for High Performance Manufacturing Virginia Polytechnic Institute and State University 206 N. Washington Street, Suite 400 Alexandria, VA 22314, U.S.A. Ngai Fong Choong Suite 301, Block 5, Windsor Court 2290, Hong Qiao Road Shanghai 200336 PEOPLE’S REPUBLIC OF CHINA William Lee Singapore Institute of Manufacturing Technology 71 Nanyang Drive Singapore 638075, SINGAPORE 1165