Dynamic Simulation Model of Beef Supply Chain to Fulfill National Demand

Abstract

Sustainable food supply chain is required to mitigate supply chain risks, reinforce long-term supplier relationships and build stakeholder and customer trusts. It has a significant role in social welfare, political stability, and economic growth. In this research, we treated beef as a commodity, based on consideration that the demand of this commodity continues to increase in line with population growth and the needs of processed food industries. On the other hand, the supply of this commodity tends to decline. Currently beef production in Indonesia covers only about 60% of the need, i.e. the rest is imported. The beef supply chain is too long, and the demand surges during Eid festivities causing shortages of beef in the market. There is a need to design a program that is strategic and systematic to anticipate shortages of beef production as importing beef product is unable to resolve the issue. One of the problem-solving efforts that can be done is to improve supply chain management. There is a need to plan, build, and integrate aspects of "production-distribution-consumption” at the national level by identifying the stakeholders including regions and distribution channels. By considering the aforementioned problems, the beef supply chain can be improved with the support of simulation model to assess the existing system and to develop some scenarios to improve the system performance. We utilized system dynamics model to accommodate several key variables or parameters that have significant contribution to strategic sustainable development of food supply chain, such as changes and uncertainties in supply (caused by climate change), demand, distribution, as well as internal and external business factors. The research results show that national demand can be fulfilled through several strategic initiatives.

Application of System Thinking Approach in Identifying the Challenges of Beef Value Chain

“…However, retail beef price continued to rise. This result is consistent with that of Suryani et al (2016) stated that beef import is unable to resolve the problems of shortage of beef production and higher prices. In this case, Source: own processing Figure 7: Consumer beef demanded quantity and cattle production capacity (shifting the burden archetype).…”

Supply and demand of beef in Indonesia: a system dynamics approach

“…The act of performing cow cuts will result in a reduction in beef production and a corresponding escalation in the price of meat. Hence, it is imperative to allocate resources toward the establishment of new agricultural facilities to enhance the overall capacity of cattle production [30]. Odoemena et al conducted a study wherein they developed a system dynamics model to assess the efficacy of exploratory techniques in mitigating the declining trend of per capita beef consumption in Nigeria.…”

“…According to a study, the demand for beef is contingent upon factors such as population size and per capita consumption. According to another scholarly investigation, the level of livestock output is influenced by various factors, including the number of livestock animals, their productivity, the proportion of beef produced, and carcass quality [30]. Previous research on beef production has focused on the availability of beef, using two sub-models: the beef production sub-model and the beef demand sub-model [31][32][33].…”