A System Dynamics Approach to Sustainable Business Model Transformation: A Manufacturing Case
Journal of Systems Thinking in Practice, 2022
Ali Hosseini, S. Hossein Hosseini
DOI: 10.22067/jstinp.2022.76303.1010
About the Project: From late 2019 to 2021, I collaborated with Dr. Hossein Hosseini at the Model-based Management Systems Institute (SAMAM) as a visiting researcher. During this time, we undertook several research projects, with Dr. Hosseini often leading our initiatives. However, in the case of our recent publication, “A System Dynamics Approach to Sustainable Business Model Transformation: A Manufacturing Case,” I took on a lead role, driving both the research direction and strategic insights. This project provided a unique opportunity to design a dynamic model that would allow manufacturing companies to test and analyze the impact of sustainable business practices before implementation.
The project began with an extensive review of current business models focused on sustainability. We examined how leading companies worldwide were incorporating strategies like recycling and reuse into their business frameworks. The goal was to create a model that would give decision-makers, particularly in manufacturing, a way to simulate sustainability shifts and evaluate their impact. By understanding these dynamics in advance, companies could reduce risks and optimize their transition to more sustainable practices.
Methodology and the Role of System Dynamics: A pivotal aspect of our approach was the use of system dynamics—a methodology especially suited for complex, interconnected systems. I led the development and strategic structuring of the project, while Dr. Hosseini’s expertise in modeling and simulation was instrumental in building our system dynamics framework. Using Vensim, we constructed a dynamic model that incorporated feedback loops and system interactions, allowing companies to experiment with different sustainability scenarios.
The model empowers decision-makers to adjust parameters such as recycling capacity, investment costs, and quality targets, effectively simulating outcomes under various assumptions. This systems approach gave us the flexibility to understand how policy adjustments and external factors impact a company’s transition to sustainable practices, making it a valuable tool for strategic planning.
Key Findings and Real-World Implications: Applying the model to a case study with a plastics manufacturer, we found that increasing recycling and reuse capacity by 32 percent could yield significant returns: enhancing the company’s green image, achieving over 85 percent quality control, and breaking even on the investment within 55 months. Additionally, the study underscored the importance of government incentives, like loans and ecotaxes, in accelerating sustainability transformation. These insights provide valuable guidance for manufacturing firms aiming to adopt environmentally responsible practices without sacrificing financial performance.
Reflections on My Role and Collaboration: As the project lead, I took responsibility for transforming our model’s findings into actionable insights, structuring the results into a form that would be accessible to industry leaders and policymakers. My collaboration with Dr. Hosseini was invaluable, as his system modeling expertise brought depth and precision to the project. Together, our efforts created a powerful tool for sustainability assessment, showcasing the transformative potential of system dynamics in guiding responsible business decisions.
Looking Forward: This research represents a foundational step in integrating system dynamics with sustainable business strategies. Future research could expand on our findings by incorporating external variables like material price fluctuations or regulatory changes, making the model even more adaptable. As for me, this project has strengthened my commitment to sustainability, and I look forward to continuing this work, supporting businesses in their journey towards a more sustainable future.
