Analysis of lean manufacturing strategy using system dynamics modelling of a business model

Abstract

Purpose -A system dynamics-based methodology is described for analysing the impact of lean manufacturing strategies on a company's business performance, using Business Model Canvas perspective. Design/methodology/approach -A case study approach is used to describe the methodology which consists of conceptualizing a system dynamics model on the basis of Business Model Canvas. The base system dynamics model is elaborated to include variables and concepts that consider the effects of lean manufacturing metrics on business performance. In the modelling experimentation, the lean manufacturing metrics are made to take on likely values one would expect if certain lean practices are initiated or improved. The experimental results provide one with the likely impact on business performance, if one were to improve lean manufacturing practices. Findings -The simulation results for the case study show that lean improvements, on the short-run, have a significant impact on business performance, but on the long-run, the impact is only marginal.Research implications/limitations -The described methodology provides one with a structured format for investigating the impact of lean practices on business performance. Although the developed system dynamics model was built with generality in mind, it remains to be reproduced in other settings to test its replicability Practical implications -The methodology enables an organization target which lean improvements to initiate based on their strategic impact on the business. Originality/value -Limited studies exist where system dynamics and business models are combined to test the strategic impact of lean manufacturing.

Enablers of Lean for Manufacturing Excellence: An Interpretive Structural Modelling and Analysis

“…Literature review (Ali & Deif, 2014; Gomez et al, 2019; Haddad & Otayek, 2018; Ho et al, 2018) has also highlighted the growing application of systems dynamics methodology in assessing the impact of implementing lean strategies on manufacturing organization’s business performance trends.…”

Designing of Service Dominant Logic and Business Model Canvas: Narrative Study of Village Tourism

“…Building blocks provide a way to set the framework of a business model and define logic to generate profits for the company, as well as develop and deliver value to customers. Canvas models are widely used in many types of organizations due to their ease of application and management (Drejerska, et al, 2019;Franzidis, 2019;Kadir, 2018), canvas is a way to visually set business logic to guide the prototype generation phase (Ladd, 2018), gather feedback, and review iterations about innovations in business models (Segura, et al, 2020). The success factor of business development model includes well maintained building facades, uninterrupted sidewalks, trees that contribute to a pleasing microenvironment and the creation of well-maintained, signed and signaled open areas.…”

“…The canvas business model was adopted from the activity system to discuss the management business model of the management organization as the ideal type. Canvas definition (Segura, et al, 2020) is another conceptualization of the business model that offers an alternative approach to understanding how organizations work (Ladd, 2018). One of the challenges of using a business model canvas for academic purposes relates to how it relates to theory.…”

A System Dynamics Model of Employees’ Performance

“…In a number of cases, they have used system dynamics in parallel with discrete event simulation, focusing on the former in the organizational aspects of manufacturing companies and the latter for the operations of the processes and systems in the organization [102][103][104]. In a recent study, they focused on the use system dynamics modelling approach as a strategic planning tool for analyzing business models [105].…”