Developing the LARG-Effective Supply Chain Model Using a System Dynamics Approach

Abstract

Nowdays, supply chain specialists are looking for the integrated development of the supply chain model in order to increase the competitiveness, effectiveness and reduce the problems in the supply chain. They always seek to identify and develop this process so that they can cover more aspects of the chain. Adding effectiveness indicators along with LARG indicators and using the basics of the dynamic system to improve the efficiency of the supply chain is one of the innovations of this study. At first, by using research literature and studies, 12 headings of indicators were selected as LARG-E indicators. Then, with the Fuzzy Delphi method, the relationships and importance of each of these components were determined, and more important variables were modeled for further investigation. With using the concepts of dynamic systems, causal loops were drawn. Then, to check the function of the model, dynamic hypotheses were developed with the opinion of experts. In the next step, the flow diagram of the model and also the validation tests of the proposed model were done. Finally, by examining the outputs obtained from the proposed scenarios, it was found that most of variables have better behavior in LARG-E approach.IntroductionIn recent years, with the addition of various competitions in the world markets, many researches have been conducted to use new technologies and researches in order to improve the production process and increase the effectiveness of these competitions as much as possible (Mohghar et al., 2017). All the goals that work in this field increase the competitiveness of the organization. This competition is by reducing costs, being present in the market and satisfying the customer. To increase profits, protect the environment, keep the markets stable and meet the expectations of customers, organizations should be provided using the existing environments in a set of customers (Pisha et al., 2016). Use chain management requires the use of new facilities and improvements to previous findings such as lean, agile, resilience and green to increase speed and competitiveness, selection and decision-making to achieve the organization and maximum effectiveness.Today, supply chain specialists are looking for the integrated development of the supply chain model to increase the effectiveness and efficiency of the supply chain in order to increase competitiveness and reduce supply chain problems. In this case, there is a consensus among experts that there is no comprehensive model. All the mentioned cases make it inevitable to design a comprehensive and effective model for the supply chain. The verifiable issue is the conflicts and the non-alignment of all the indicators of the paradigms with each other. LARG paradigms, without considering the spirit of effectiveness in each supply chain, cannot fully protect it against continuous changes in the competitive market arena. A comprehensive model that pays particular attention to effectiveness while implementing LARG paradigms has not been examined in the literature review and the consensus of experts. Therefore, in this research, we are looking to design a comprehensive model in a LARG-effective manner so that the effect of various LARG-effective indicators on the performance of the supply chain can be investigated. The integration of LARG paradigms has been studied a lot so far, but its development is based on the concepts of innovation effectiveness of this research, and in this way, the dynamic system approach was used.Materials and MethodsTo formulate a LARG supply chain, first the framework, indicators and variables of each LARG paradigm were extracted from the research literature, then in order to develop them with effective concepts, the effective supply chain was studied. In order to implement the fuzzy Delphi approach, based on the effectiveness indicators extracted from the subject literature and LARG supply chain approaches, operational indicators were provided to the experts participating in the research in the form of a questionnaire via email and after initial coordination. After collecting the completed questionnaires, fuzzification operations, fuzzy averaging and then de-fuzzification were performed. The results were brought to the attention of the participants and they were asked to apply their desired changes according to the obtained results. This approach reached the saturation stage in the third round and there was no change in the opinions of the participants and the consensus of the panel experts was the final and trusted output of the Delphi method. Finally, according to these weights, 9 quantitative variables had the highest importance and were used for dynamic modeling. The simulation stage is done with the help of software and Nasim. According to the features of modeling based on system dynamics, this approach was chosen as the main research tool in this study because there are linear relationships between the variables and there are nested feedbacks between the variables of the subsystems, the importance of simultaneously improving the performance in different layers of the producer, supplier and distributor. Which is one of the goals of this research, with this approach, it can be a very suitable tool for decision-making by the senior managers of the organization.Discussion and ResultsOrganizations are trying to improve their competitiveness by adopting Lean, Resilient, Green and Agile strategies; But as it was said, the implementation of these paradigms, which sometimes have conflicting results, requires a new integration and index to align the goals. So far, many researches have been done by merging two or more paradigms, the combination of all 4 paradigms called LARG has greatly helped to improve the performance of supply chains, but in this research, in order to improve the conflicts between paradigms, a new concept of spiritual effectiveness was given to the supply chain. Understanding the dynamics of applying the above four strategies and their effectiveness was done using the dynamic systems approach. In this research, the indicators of the LARG supply chain were defined based on theoretical foundations and interviews with experts; then the effectiveness indicators were placed next to them. These indicators were implemented in the printing and ink industry. In this way, an effective LARG integrated system was defined; then, using a dynamic model, dynamic hypotheses were first defined and state and flow diagrams were drawn. After correctness of the model and validation of the model, two scenarios were examined for 8 important variables. After applying the scenarios, the performance of LARG and effective LARG was compared. By applying each scenario in the designed model, it was possible to check the effect of new indicators on the variables and their behavior.ConclusionsAs a result, if the components of the effective supply chain are properly integrated with the LARG concepts, they integrate the conflict that may exist between the LARG paradigms and play the role of synchronization and improvement as a ruler and standard. The effective management of the LARG supply chain may not be defined as an independent variable, but it is a result of variables and indicators that improved performance in most cases.

Keywords

• key words: larg supply chain management
• simulation
• optimization
• system dynamics