A System Dynamics Model of the LARG Supply Chain Diffusion in the Steel Industry of Yazd

Abstract

The supply chain is currently threatened by technological advancements, market fluctuations, environmental concerns, government regulations, and unanticipated events. In this context, the LARG paradigm makes the supply chain resistant to disruptions, reduces adverse environmental effects, responds to market, customer, and technological changes, and minimizes waste. Efficient supply chain management in the steel industry is crucial due to its fundamental role in the national economy and societal well-being. LARG supply chain simulations in the steel industry using system dynamics can identify input-output relationships, specify internal feedback levels, and model system behavior at different time intervals based on available information. Despite the significance of this issue, previous research has paid limited attention to this topic. This study aims to present a system dynamics model of the LARG supply chain in the steel industry of Yazd in light of the prevailing production strategies in the steel industry and the impact of regional GDP changes on steel production. The results indicate that the proposed model has the capacity to predict and interpret real-world conditions and reasonably describe the trends of supply chain changes. Additionally, it provides an effective tool for steel industry managers to enhance and optimize the supply chain in the face of challenges and environmental changes. The variables in the model in optimistic and pessimistic scenarios show that changes in the ratio of iron waste production, iron ore production ratio, production waste percentage, and iron ore reserves have a direct and noticeable impact on the resilience, flexibility, agility, and sustainability of the supply chain.