System dynamics analysis for RFID-enabled milk-run logistics system in industrial park

Abstract

Milk-run logistics (MRL) allows the multiple enterprises in an industrial park to integrate their small-batch materials handling tasks into a highly shared logistics process to avoid redundant logistics consumption. Yet the performances of such collaborated process are often affected by the unexpected operational dynamics factors of MRL process, e.g. suppliers' unstable production rates. This paper, firstly, discusses how to apply system dynamics (SD) approach to design the structure and parameters of the MRL system so as to achieve a statistical optimization with operational dynamics. Then, the MRL system is further simulated by SD in RFID-based information sharing environment, to investigate the comparative advantages of typical RFID application schemes. RFID benefits and the corresponding RoI-based economic analysis are both conducted to provide a comprehensive instruction for those MRL managers.