A system dynamics model for sustainable corporate strategic planning

Becerra-Fernandez, Mauricio; Ruiz-Acosta, Liliana Elizabeth; Camargo-Mayorga, David Andres; Muñoz, Mario Andrés

doi:10.1590/0103-6513.20220011

Mauricio Becerra-Fernandez ^* * mauriciobecerrafernandez@gmail.com

Universidad Militar Nueva Granada, Facultad de Ciencias Económicas, Bogotá, Colombia

http://orcid.org/0000-0003-1060-2198

Liliana Elizabeth Ruiz-Acosta

Universidad Militar Nueva Granada, Facultad de Ciencias Económicas, Bogotá, Colombia

http://orcid.org/0000-0003-3323-8480

David Andres Camargo-Mayorga

Universidad Militar Nueva Granada, Facultad de Ciencias Económicas, Bogotá, Colombia

http://orcid.org/0000-0002-5290-8251

Mario Andrés Muñoz

The University of Melbourne, School of Mathematics and Statistics, Parkville, Victoria, Australia

http://orcid.org/0000-0002-7254-2808

* mauriciobecerrafernandez@gmail.com

Figures (11)
Tables (5)

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Figure 2
Causal loop diagram.

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Figure 3
Stock and flow diagram of the corporate social responsibility model.

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Figure 1
Relations between the sectors of the model.

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Figure 4
Variables modified by strategy in the Business as Investment scenario.

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Figure 5
Strategies combination in the Business as Vision scenario.

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Figure 6
Behavior of (a) EnvI; (b) SocI; (c) EcoI: and (d) CPI under BAU scenario.

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Figure 7
Behavior of (a) EnvI; (b) SocI; (c) EcoI; and (d) CPI indicators under PM strategies implementation.

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Figure 8
Behavior of (a) EnvI; (b) SocI; (c) EcoI; and (d) CPI indicators under IMM strategies implementation.

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Figure 9
Behavior of (a) EnvI; (b) SocI; (c) EcoI; and (d) CPI indicators under BAV scenario and an optimistic demand increase.

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Figure 10
Behavior of (a) EnvI; (b) SocI; (c) EcoI; and (d) CPI under BAV scenario and pessimistic demand decrease.

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Figure 11
Consolidated results for (a) EnvI; (b) SocI; (c) EcoI; and (d) CPI indicators.

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Table 1
Key performance indicators equations.

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Table 2
CPI equations.

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Table 3
Scenarios combination for the system dynamics corporate social responsibility model.

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Table 4
Consolidated results by strategy and indicator.

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ID Name Value, function or graph Description PIRM Percentage of Indirect Recycled Materials 0.0975 Percentage of recycled indirect materials used in manufacturing IMCT Indirect Material Coverage Time 1 Coverage time of the indirect materials safety stock TCIM Time to Correct Indirect Materials 0.15 Delivery time of the indirect materials supplier IM Indirect Materials 200 Initial stock of these materials DMC Direct Materials Coverage Time 1 Coverage time of the direct materials safety stock DM Direct Materials 100 Initial stock of these materials PM Production Materials 100 Initial stock of these materials PCU Production Cost per Unit 518.97 Cost per unit manufactured St Stock 1,000 Initial inventory of the finished goods TCS Time to Correct Stock 0.05 Manufacturing time DI Demand Increase 1 Percentage increase in demand for the final good DSC Desired Stock Coverage Time 1 Coverage time of the desired stock SVU Sales Value per Unit $ 653.90 Sales price per manufactured unit NOr New Orders 0.003448813 Demand growth (applies to scenario analysis) AOT Average Order Time 12 Time considered for the calculation of the average of the orders W Workers 50 Number of initial workers WRT Workers Rotation Time RANDOM(48, 60) Permanence time of the workers in the company HT Hiring Time 1 Time required to hire a worker PWCA Percentage of Workers in Collective Agreements 0.0916 Percentage of workers in collective agreements UW Units per Worker 20 Number of units a worker can manufacture per month PWD Probability of Worker Disease RANDOM(0, 0.015) Probability of a worker suffering from an occupational disease APDP Affectation of Professional Diseases to Productivity Impact on productivity due to worker diseases PFCE Probability of Faults to the Code of Ethics RANDOM(0, 0.03) Probability of a worker committing a fault to the code of ethics AFCE Affectation of the Faults to the Code of Ethics Effect on productivity due to faults to the code of ethics MS Men Salary $ 298 Salary of male workers per month WS Women Salary $ 243 Salary of female workers per month PMW Percentage of Male Workers 0.59 Percentage of male workers M Machines 5 Number of initial machines MW Machines per Worker Workers_W/10 Number of machines required per worker (corresponds to the number of initial workers) TBM Time to Buy Machines 1.5 Time required for machine purchase MOT Machine Obsolescence Time 120 Machines obsolescence time MC Machine Cost 20,000 Unit cost per machine IID Incentives for Innovation and Development 0.1244 Incentives percentage of innovation and development IIT Incentives Implementation Time 8 Time required for the implementation of incentives in innovation and development ID Innovation and Development ID 0.294 Initial innovation degree of the company PPISS Percentage of Products that Impact S&S Percentage of goods that impact customer health and safety EID Effect Innovation on Demand Percentage increase in demand as an effect of increased innovation MI Marketing Investment 0.0544 Percentage of marketing incentives MIT Marketing Implementation Time 4 Time required for the implementation of incentives Mk Marketing 0.0153 Initial degree of marketing of the company EMD Effect of Marketing on Demand Effect on demand of marketing investment ECU Energy Consumption per Unit $ 17.21 Energy cost in dollars per unit manufactured WUP Waste per Unit Produced 0.017 Percentage of waste generated per unit produced WTC Waste Treatment Cost $ 0.031 Treatment costs per unit of waste generated

Sector	KPI	Equation		Variables or parameters used
Environmental	Consumption of recycled materials and raw materials	$e n v K P I 1 = [\frac{(I R M + D M)}{(I M + D M)}] \times 100$	(1)	• IRM: Indirect Recycled Materials • DM: Direct Materials • IM: Indirect Materials
	Fuel consumption	$e n v K P I 2 = [\frac{T E C}{T P C}] \times 100$	(2)	• TEC: Total Energy Consumption • TPC: Total Production Costs
	Waste production	$e n v K P I 3 = [\frac{T W}{P r}] \times 100$	(3)	• TW: Total Waste • Pr: Production
	Environmental costs	$e n v K P I 4 = [\frac{T C W D}{S R}] \times 100$	(4)	• TCWD: Total Cost of Waste Disposal • SR: Sales Revenue
Social	Percentage of employees covered by a collective agreement	$s o c K P I 1 = [\frac{W C A}{W}] \times 100$	(5)	• WCA: Workers in Collective Agreements • W: Workers
	Occupational diseases	$s o c K P I 2 = [\frac{O D}{W}] \times 100$	(6)	• OD: Occupational Diseases
	Products which impact on the health and safety of customers	$s o c K P I 3 = [\frac{P R I S S}{P r}] \times 100$	(7)	• PRISS: Products that Impact the Health and Safety • Pr: Production
	Expenditures on identifying and ensuring customer satisfaction	$s o c K P I 4 = [\frac{M k}{S R}] \times 100$	(8)	• Mk: Marketing • SR: Sales Revenue
	Wage discrimination	$s o c K P I 5 = [\frac{M S C}{W S C}] \times 100$	(9)	• MSC: Men’s Salary Cost • WSC: Women’s Salary Cost
	Violations of the Code of Ethics	$s o c K P I 6 = [\frac{F C E}{W}] \times 100$	(10)	• FCE: Faults to the Code of Ethic
Economic	Cash Flow	$e c o K P I 1 = [\frac{P T C}{S R}] \times 100$	(11)	• PTC: Production Total Cost • SR: Sales Revenue
	Return on Assets	$e c o K P I 2 = [\frac{EBIT}{M T C}] \times 100$	(12)	• EBIT: Earnings Before Interest and Taxes • MTC: Machines Total Cost

KPI	Equation
Environmental performance indicator	EnvI = (0.186 × envKPI1) – (0.265×envKPI2) – (0.279 × envKPI3) – (0.27 × envKPI1)	(13)
Social performance indicator	SocI = (0.095 × socKPI1) – (0.245 × socKPI2) + (0.109 × socKPI3) – (0.169 × \| benchmark socKPI4 – socKPI4 \|) – (0.157 × \| benchmark socKPI5 – socKPI5 \|) – (0.225 × socKPI6)	(14)
Economic performance indicator	EcoI = (0.708 × ecoKPI1) + (0.292 × ecoKPI2)	(15)
Complex Performance Indicator	CPI = (0.062 × envKPI1) – (0.09 × envKPI2) – (0.094 × envKPI3) – (0.091 × envKPI4) + (0.048 × socKPI1) – (0.123 × socKPI2) + (0.056 × socKPI3) – (0.084 × \| benchmark socKPI4 – socKPI4 \|) – (0.079 × \| benchmark socKPI5 – socKPI5 \|) – (0.114 × socKPI6) + (0.112 × ecoKPI1) + (0.047 × ecoKPI2)	(16)

Strategy	Model Sector	Variable Modified ID	BAU	BAI-P	BAI-W	BAI-PM	BAI-I	BAI-M	BAI-IMM	BAV-OP-PM	BAV-OP-IMM	BAV-OP-AS	BAV-PE-PM	BAV-PE-IMM	BAV-PE-AS
No Strategy Implementation	All	-	•
Production Management (PM)	Production (P)	PIRM		•		•				•		•	•		•
		PCU		•		•				•		•	•		•
	Workers (W)	UW			•	•				•		•	•		•
		PMW			•	•				•		•	•		•
Innovation and Marketing Management (IMM)	Innovation (I)	IID					•		•		•	•		•	•
		IIT					•		•		•	•		•	•
	Marketing (M)	MI						•	•		•	•		•	•
		MIT						•	•		•	•		•	•
Optimistic (OP)	Production (P)	NOr								•	•	•
Pessimistic (PE)	Production (P)	NOr											•	•	•

Scenary	Sector or strategy	EnvI	SocI	EcoI	CPI
BAU	-	5.51	-4.34	73.06	11.31
BAI	P	5.65	-4.34	74.44	11.59
	W	5.79	1.65	74.99	14.73
	PM	5.66	1.65	77.27	15.07
	I	5.89	-3.80	72.97	11.70
	M	5.50	-4.34	73.26	11.36
	IMM	5.60	-3.80	73.19	11.64
BAV-OP	PM	6.00	1.65	77.47	15.21
	IMM	6.12	-3.99	73.48	11.76
	AS	5.87	2.20	77.72	15.49
BAV-PE	PM	5.57	1.65	76.12	14.86
	IMM	5.52	-3.80	72.76	11.55
	AS	5.86	2.20	75.44	15.12

[1] * mauriciobecerrafernandez@gmail.com

Brasil

Brasil

A system dynamics model for sustainable corporate strategic planning

Abstract

Paper aims

Originality

Research method

Main findings

Implications for theory and practice