Diagnose of heavy leather industry supply chain using a system dynamics approach

Abstract

Supply chain management is an efficient approach for reducing production costs and shortening waiting time. Field method and interview tools were used to identify variables and reference patterns, and the history and background of the issue were examined with the documentary method. This study aimed to present a model of problem-solving in the supply chain of the heavy leather industry with a system dynamics approach. The documentary method examined the reference patterns and the history and background of the problem. This study was conducted on 302 active and semi-active productions, including 162 heavy leather industry managers and business owners in Charmshahr Tabriz (Split) and 140 in cow leather. The analysis method was the simulation of system dynamics by VENSIM software. The decrease in the supply of cow rawhide increased the bargaining power of intermediaries and brokers in selling rawhide. It reduced the bargaining power of leather trimmers for the supply and purchase of rawhide. The supplier forces the buyer to sell the rawhide at any price and quality by reducing the bargaining power of supplying the rawhide. Therefore, the price of each kilo of rawhide increased thrice in the last two years due to the decrease in the supply of rawhide.