An Analysis of Influential Factors on Procurement Cycle Time Using a System Dynamics Approach

Journal of Systems Thinking in Practice

دوره 1، شماره 3، اسفند 2022، صفحه 72-91   

نوع مقاله: Research Article

شناسه دیجیتال (DOI): 10.22067/jstinp.2022.78761.1023

نویسندگان

Mohammad Asghari^{* 1}؛ Fatemeh Rostambeygi²؛ Seyed Hossein Hosseini³؛ Mohammad Motamedi²

¹Department of Logistics and Supply Chain, Faculty of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran.

²Department of Industrial Engineering, Faculty of Engineering, University of Tehran, Tehran, Iran.

³Model-based Management Systems Institute (SAMAM), Tehran, Iran.

چکیده

Organizational agility is one approach that allows organizations to rapidly adapt to these conditions, which can be extended to the agility of individual business processes within the organization. Procurement cycle time is one of the most critical performance indicators that measure procurement process agility. This study will study the factors impacting procurement cycle time using a system dynamics modelling approach. To achieve this, the subsystems are defined and modelled, including internal subsystems like production and sales processes and external ones like market and suppliers. Next, the interactions of these subsystems are analysed, and the casual loops and stock-flow model of the problem are analysed and developed. The model has been implemented and validated in a production organization under the seasonal demand factor. Finally, three policies were proposed to reduce the procurement cycle time, and the simulation results of the policies were analysed numerically. According to the obtained results, combining the presented policies will lead to a 22% reduction in the procurement cycle time.

کلیدواژه‌ها

Business Process Management؛ Supply Chain Management؛ System dynamics؛ Procurement cycle time؛ Organizational agility

مراجع

Abolbashari, M.H., Zakeri, A. and Chang, E. 2018. Using system dynamics for predicting an organization’s procurement performance, in IFIP, Advances in Information and Communication Technology. Springer New York LLC,538, pp.294–299. Available at: https://doi.org/10.1007/978-3-030-00828-4_29.

Almahamid, S., Awwad, A. and McAdams, A.C. 2010. Effects of organizational agility and knowledge sharing on competitive advantage: an empirical study in Jordan, International Journal of Management, 27(3).

Barrad, S., Valverde, R. and Gagnon, S. 2018. The application of system dynamics for a sustainable procurement operation, in Innovative Solutions for Sustainable Supply Chains. Springer Verlag, pp.179–196. Available at: https://doi.org/10.1007/978-3-319-94322-0_7.

Cedillo-Campos, M. and Sánchez-Ramírez, C. 2013. Dynamic self-assessment of supply chains performance: An emerging market approach, Journal of Applied Research and Technology, 11(3), pp.338–347.

Chen, T. and Tan, B. 2020. Research on Project Resource Allocation and Lean Procurement Strategy Based on System Dynamics’, Academic Journal of Business & Management, 2(5), pp.25–36.

Chiang, C.Y., Kocabasoglu-Hillmer, C. and Suresh, N. 2012. An empirical investigation of the impact of strategic sourcing and flexibility on firm’s supply chain agility, International Journal of Operations and Production Management, 32(1), pp.49–78.

Van Hoek, R.I., Harrison, A. and Christopher, M. 2001. Measuring agile capabilities in the supply chain’, International Journal of Operations and Production Management, 21(1–2), pp.126–147.

Hosseini, A. and Hosseini, S.H.. 2022. A System Dynamics Approach to Sustainable Business Model Transformation: A Manufacturing Case, Journal of Systems Thinking in Practice, 1(1), pp.24–48.

Kiani, B. et al., 2009. Using Causal Loop Diagram to Achieve a Better Understanding of e-Business Models.’, International Journal of Electronic Business Management, 7(3), pp.159–167.

Laradi, M., Olomolaiye, A. and Douraid, A. 2015. Modeling trading & procurement cycle based on insourcing and outsourcing strategy, in Proceedings of the 2015 International Conference on Operations Excellence and Service Engineering, Orlando: USA.

Leybourn, E., 2013. Directing The Agile Organisation: A lean approach to business management. IT Governance Ltd. Available at: https://www.jstor.org/stable/j.ctt5hh6fh.

Luna-Reyes, L.F. and Andersen, D.L. 2003. Collecting and analyzing qualitative data for system dynamics: methods and models, System Dynamics Review: The Journal of the System Dynamics Society, 19(4), pp.271–296.

Ng, B., Ferrin, B.G. and Pearson, J.N. 1997. The role of purchasing/transportation in cycle time reduction’, International Journal of Operations and Production Management, 17(6), pp.574–591.

Nicoletti, B. 2018. Agile Procurement, in Agile Procurement. Palgrave Macmillan, Cham.  Available at: https://doi.org/10.1007/978-3-319-61082-5_3.

Pereira, C.R., Christopher, M. and Lago Da Silva, A. 2014. Achieving supply chain resilience: the role of procurement, Supply Chain Management: An International Journal, 19(5/6) pp.626–642.

Poles, R. 2013. System Dynamics modelling of a production and inventory system for remanufacturing to evaluate system improvement strategies’, International Journal of Production Economics, 144(1), pp.189–199.

Rafiei, H., Rabbani, M. and Hosseini, S.H. 2014. Capacity Coordination under Demand Uncertainty in a Hybrid Make-‎ To-Stock/Make-To-Order Environment: A System Dynamics‎ Approach’, Scientia Iranica, 21(6), pp.2315–2325.

Riley, S. and Brooks, D. 2012. Follow the Path to Agility, Supply and Demand Chain Executive. Available at: https://www.sdcexec.com/sourcing-procurement/article/10784962/follow-the-path-to-agility.

Sawan, R., Low, J.F. and Schiffauerova, A. 2018. Quality cost of material procurement in construction projects’, Engineering, Construction and Architectural Management, 25(8), pp.974–988.

Sterman, J. 2002. System Dynamics: systems thinking and modeling for a complex world. Available at: http://hdl.handle.net/1721.1/102741.

Swafford, P.M., Ghosh, S. and Murthy, N. (2006) ‘The antecedents of supply chain agility of a firm: Scale development and model testing’, Journal of Operations Management, 24(2), pp.170–188.

Terjesen, S., Patel, P.C. and Covin, J.G. 2011. Alliance diversity, environmental context and the value of manufacturing capabilities among new high technology ventures, Journal of Operations Management, 29(1–2), pp.105–115.

Zhang, Z. and Sharifi, H. 2000. A methodology for achieving agility in manufacturing organisations, International Journal of Operations and Production Management, 20(4), pp.496–513.