Adoption of Sustainable Supply Chain Management for Performance Improvement in the Construction Industry: A System Dynamics Approach

Abstract

Sustainable supply chain management (SSCM) involves the managing of information, materials, cash flows, and collaboration among enterprises along the supply chain, integrating sustainable development goals. This research paper aims to determine challenges in SSCM adoption and to address related complexity using the system dynamics (SD) approach utilizing modeling and simulation techniques. This research identified challenges from the literature using content analysis. Causality among these identified challenges was determined using interviews and questionnaire surveys that led to the development of a causal loop diagram (CLD), which was used in the development of the SD model. Among the 19 shortlisted variables, CLD had IV reinforcing and II balancing loops. Moreover, CLD was used to build an SD model with two stocks, and a new stock named ‘project performance’ was added to envisage the cumulative impact of all stocks. The model was simulated for five years, and the results predict that the lack of top management commitment and corporate social responsibility adversely affects project performance. This implies that there is a need to improve numerous factors, in particular corporate social responsibility and top management commitment, which would lead to the adoption of SSCM, thus leading to a performance improvement for the construction industry (CI). The model was validated using boundary adequacy, structure, and parametric verification tests, which showed that the developed model is logical and approximately replicates the industry’s actual system. The research findings will help the CI practitioners to adopt sustainability principles in terms of the supply chain and will not only enhance productivity and performance but will also help in the minimization of delays, promote long-term relations, and reduce communication gaps and project complexities.