Optimizing Supply Chain Performance: A System Dynamics Approach Emphasizing Agility and Flexibility

Abstract

This research aims to enhance supply chain performance by developing a system dynamics model, emphasizing agility and flexibility indicators. The increasing complexity of goods and services has presented individual companies with survival challenges in the absence of support and collaboration from other organizations. Recognizing the potential benefits of cooperation, organizations have acknowledged that collective efforts yield superior outcomes compared to isolated activities. The modeling approach seeks to reduce costs, lead times, and enhance customer satisfaction while considering agility and flexibility factors. Through literature reviews and expert interviews, essential concepts and indicators were evaluated, leading to the determination of cause and effect relationships between variables and the construction of the model. The results revealed that neither agility nor flexibility alone can ensure profitability; instead, an optimal balance of both is crucial to maximize profitability. Consequently, an optimal level of agility and flexibility has been estimated to guide effective decision-making and improve overall supply chain performance.