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which is expecting to increase performance through service effectiveness and cost efficiency can do it in two ways, namely 1 Reducing the barrier of supply chain integration, and 2 Increasing
facilitation of supply chain integration Richey et. al, 2010. The objective of supply chain integration of key business processes among a network of interdependent suppliers, plantation,
processor , and marketers in order to improve the flow of goods, services, and information from original suppliers to final customers, is reducing system-wide costs while maintaining the
required service levels. The supply chain systems in this research focus on 3 sub-model. Production Sub-model Plantation and Mill. Demand and Supply Sub-model Domestic and
Export Market and Revenue and Cost Sub-Model Sales Revenue, Production Cost, Logistics Cost. By understanding the supply chain system in CPO Agro-industry we can analyze the
system by using Causal Loop Diagram CLD and Stock Flow Diagram SFD.
Figure 5 : Palm Oil Supply Chain
Source : RSPO
2.2. Analyzing with CLD and SFD
There are two structural ways to analyze any system dynamics: CLD and stock and flow diagram SFD. CLD diagrams can be used to show the governing inter-relations among a number
of different variables using feedback loops. A positive feedback loop means the dependent variable moves in the same direction as that of the independent variable; as such, the polarities
are assigned as a plus + sign on the arrowhead of feedback loops. In the case of negative feedback loops, if the independent variable increases, the dependent variable decreases and vice
versa. Thus a minus – sign is assigned to the arrowhead of the feedback loop.
The other structure of system dynamics is a SFD which is used to explain both variables, i.e. the stocks and flows. Stocks refer to the status of variables at a pointmoment
of time while flows exist during a period of time. Stocks are accumulated over time through inflows and outflows. Apart from stock and flow variables, another kind of variable called an
‘auxiliary variable’ has been used here. Auxiliary variables are used to connect between stocks and flows as well as among themselves. By using all these three kinds of variables, we can
explain dynamic systems more appropriately. Many researchers and authors have used stock and flow diagrams to model and describe supply chain performance variables Agarwal and
Shankar 2005, Campuzano and Mula 2011.
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Figure 6 : Causal Loop Diagram
Source : Lembito, 2013
Figure 7 :
Stock Flow Diagram
Source : Lembito, 2013
2.3. Developing Computer Simulation Model
System dynamics software is useful to model and simulate dynamic behaviors of a wide variety of systems such as business, economic market, team dynamics, electrical engineering, natural
Pr ofit
Logist ics Cost
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Ex por t Sa le s
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FFB T o ta l St o ck To t al T r an spo r t
Cost Exp or t Dem an d
Ex port Tra nsport Cost
St ora ge Cost Ex port
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Co st Dom est ic T ot al
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