A system dynamics approach for strategic partnering in supply networks

Abstract

Individual businesses no longer compete as autonomous entities but rather by joining a supply chain alliance due to the highly competitive business situation. Supply chain coordination is truly a transformational business strategy that has a profound effect on competitive success and strategic partnering. This paper conceptually integrates supply chain coordination and strategic partnering. In this paper, we describe a generic system dynamics simulation model for strategic partnering in supply networks. Our model addresses the whole supply chain starting from the suppliers to the final customers and including production and distribution actors. It is generic and can adapt to various network structures. Finally, some scenarios based on cost and benefits are designed and the results are analysed which can assist the decision makers in a supply network.

Keywords:

• strategic partnering
• supply chain coordination
• information sharing
• system dynamics