Application of simulation and machine learning in supply chain management: A synthesis of the literature using the Sim-ML literature classification framework

Abstract

Stochastic modeling techniques, such as discrete-event and agent-based simulation, are widely used in supply chain management (SCM) for capturing real-world uncertainties. Over the last decade, data-driven approaches like machine learning (ML) have also gained prominence in SCM, employing methods such as supervised learning (SL), unsupervised learning (UL), and reinforcement learning (RL). As supply chains grow in complexity, hybrid models combining simulation (Sim) and ML are becoming increasingly common, and the field stands to gain from a structured review of this literature. Towards this, we developed the Sim-ML Literature Classification Framework, which includes a hierarchical taxonomy comprising five SC criteria, 22 Sim-ML classes and over 75 Sim-ML subclasses. We applied this framework to synthesize 99 papers, revealing significant diversity in how Sim-ML models are used to address supply chain challenges. Key findings include the recognition of the breadth of study objectives, identifying various forms of model hybridization achieved by combining discrete/continuous simulation techniques with SL, UL, and RL approaches, and the data flow mechanisms such as sequential and feedback methods employed by the simulation and ML elements of the hybrid model. Our findings also identify some gaps in the literature; for example, optimization is rarely incorporated into Sim-ML models. Also, most studies present Sim-ML models for addressing problems in general supply chains, likely due to the lack of access to industrial data. The review also highlights that Industry 4.0 technologies, such as digital twins and blockchain, are underrepresented in current research, as are topics like sustainability and transportation. These gaps suggest significant opportunities for future research. We provide guidelines for practitioners on applying Sim-ML models to manage supply chain drivers, mitigate the impact of disruptions, and integrate emerging technologies. Our review serves as a valuable resource for researchers, practitioners, and students interested in leveraging Sim-ML.