A System Dynamics Modeling Approach for the Strategic Management of TFT-LCD Supply Chains

The outbreak of SARS, mad cow disease, Tsunami in Southern Asia, 921 Earthquake in Taiwan, and the hurricane recently in Bangladesh have significant impacts on supply and demand. These disruptions might cause tremendous loss to the supply chain system due to delivery delay or using alternative sources to eliminate capacity deficiency. While there has been a significant amount of research conducted in the area of supply chain systems, there has been relatively little reported in this important area of understanding the system-wide or global impact of supply chain disruptions. Therefore, the importance of effectively managing supply chain disruptions has drawn more attention in both academia and industry. In this study the analysis through system dynamics approach on the disruption in the supply chain system can be demonstrated as useful methods for investigating the strategic management problem. The results of this study will assist the high or middle-level management to cope with the supply chain disruption by providing systematic procedures for strategic analysis. We also conducted an empirical study by using the data collected from TFT LCD industry. The simulated results suggest guidelines and decision rules for improving the performance of the entire system with the disruption.