System Dynamics and Sustainable Solution: The Case in a Large-Scale Pallet Manufacturing Company

Abstract

The proposal in the present research study is the result of a more than two-year process developed in a pallet manufacturing company for anchor enterprises in Southern Sonora, Mexico dedicated to beer production and export to the United States of America. Considering the high pallet demand for this supplier, a strategic plan was created in 2021, establishing an important project for developing technological solutions to improve decision making supported by graphical user interface and focused on sustainability. This study shows the application of system dynamics in all the wood and pallet manufacturing processes with a strategic sourcing supply chain. The method used for its development had the following stages: (1) developing the mapping process; (2) creating the causal loop diagram; (3) developing a flow and stock model with the representing mathematical equations; (4) simulating and validating current scenarios; (5) evaluating normal, optimistic, and pessimistic scenarios with multicriteria decision making using Technique to Order Preferences by Similarity and the Ideal Solution (TOPSIS) and Faire Un Choix Adéquat (FUCA); (6) building the graphical interface. The most relevant results for the company were having quantitative information regarding the pallet demand required by the main client for wood availability, which was the main restriction in the supply chain. The solution was based on four validation tests that allowed decision makers to support the production proposals considering the assistance of the dynamic models. The main conclusion demonstrated that using well-defined operation rules and policies—considering the installed capacity and pallet demand through the model solution—allows anticipating decisions on pallet quantity and reducing the risk of out-of-time deliveries.