Proposing a Model for Risk Management of Raw Material Supply Chain under Uncertainty with Systems Dynamics Approach (Case Study: Refractory Industries)

Abstract

In recent years, supply chain management has become increasingly important due to the globalization of businesses markets. Supply chain is a set of facilities, suppliers, customers, products and methods of inventory control, supply and distribution, and supply chain management is the process of effective planning, implementation and control of supply chain operations and an effective way to maintain competitive advantage and improve organizational performance. The shorter cycle of the product life, the emergence of new technologies, the increase in the relationships between suppliers and product development move the supply chain into more complexities. As the complexity increases, the level of uncertainty and risk in the chain also increases. Risk in the supply chain is a potential event that impedes the natural flow of materials and information in the chain and therefore leads to a disruption in the chain.

A wide range of risks in the supply chain may have negative effects on supply chain performance. Due to the close relationship between supply chain members, the occurrence of disruption or risk affects each part of the entire supply chain and disrupts its performance. Therefore, in order to overcome supply chain risks, organizations must use appropriate strategies to manage and control them.

Most of the researchers believe that the concept of risk is heavily dependent on the study context, and since other studies have performed in countries that are in quite different political, regional, economic, and etc. than our country, their results are not precisely generalizable to our country and this fact marks the necessity of conducting research in this area. Hence, in this study, we present a model for supply chain risk management in uncertainty conditions with system dynamics approach.