Modeling the Relationship Between Green Supply Chain Management (GSCM) Elements and Operational Cost Efficiency Improvement in Pharmaceutical Companies Based on Systems Dynamics: A Case Study of PT. XYZ

Abstract

PT. XYZ is a company operating in the pharmaceutical and biotechnology industries, with a focus on vaccine production and other biological products. In the current era of global competition, operational cost efficiency is a key factor in maintaining competitiveness through the implementation of Green Supply Chain Management (GSCM), as exemplified by PT. XYZ is expected to reduce operational costs through more efficient resource management, waste reduction, and improvements in process effectiveness. However, the relationship between GSCM elements and operational cost efficiency requires an in-depth and comprehensive understanding. This study aims to model the relationship between Green Supply Chain Management (GSCM) elements and operational cost efficiency improvement at PT. XYZ is using a systems dynamics approach. The GSCM elements analyzed include green product design, green innovation, green procurement, clean production, and green logistics. Through the design of a Causal Loop Diagram (CLD) and Stock Flow Diagram (SFD), 15 sub-variables that influence operational cost efficiency were identified. The simulation results indicate that the positive impact of GSCM elements on operational cost efficiency increases from the second year to the tenth year. This predictive model has an accuracy rate of 80.63%, which is considered a good prediction. Additionally, two alternative scenarios were developed to enhance efficiency further: a parameter scenario and a structural scenario. Clean production emerged as the most significant factor, with efficiency improvements reaching 110.05% and 110.94% in the 7th year.