A System Dynamics Approach to Improve Visibility and Performance in a Supply Chain System

This research takes an in-depth look into the supply chain system of a semiconductor company. It utilizes a system dynamics tool to detect demand indications and simulate the pipeline inventory. The semiconductor company has been practicing a lot of management principles especially postponement strategies and supply chain management (SCM). The overall performance of the supply chain system has never
been measured thoroughly, thus the company is not sure about the effectiveness of its decisions. It is also concerned about the effective implementation of some of the
company's policies. Using a system dynamics approach to simulation modeling, this research aims to build a complete system dynamics model for internal supply chain events (from order to ship-out). The simulation model allows for the investigation and identification of discrepancies between the business policy and actual practice of key events in order to achieve supply chain optimization. The simulation model also allows for comparison and measurement of the effectiveness of various supply chain strategies implemented by the semiconductor company. This research provides a platform into studies of supply chain systems of
semiconductor industry. Its success adds a unique case study on assessing the dynamic relationships of supply chain events in the semiconductor industry using system
dynamics technique. The simulation model provides empirical evidence on the effective implementation of various supply chain strategies. System dynamics approach to modeling a supply chain system is shown to be able to try out alternative practices that have high level of complexity.