Summary of – A system dynamics-based approach towards sustainability of a rural milk dairy venture

Document Type

Article

Abstract

Study Background: The research presented titled “A System-Dynamics based approach towards sustainability of a rural milk dairy venture’” by Dr. Vasanth Kamath and Dr. Seena Biju is centered around the unprecedented shutdowns amongst small-scale dairies due to business sustainability challenges. Through this article, an attempt to present a real-life case of a rural dairy highlighting an entrepreneurial dilemma and subsequent demonstration of the usage of Group Model Building (GMB) techniques for conducting System Dynamics (SD) simulation using Vensim® is presented.

Research Goals and Hypotheses: The primary goal is to develop a simulation model using System Dynamics approach in general, and Group model building in particular to demonstrate the possibility of using simulation as a powerful tool in identifying policy levers towards making complex business decisions.

Methodological Approach:

  1. The methodology involves building a model in the lines of GMB (Richardson and Andersen, 1995; Richmond, 1997; Vennix, 1996).
  2. It involves three stages of activities with participants that leveraged the diagramming conventions of SD: pre-meeting activities, activities during the modelling sessions, and after-care or follow-up activities (Andersen, Richardson and Vennix, 1997).
  3. Stakeholders were consulted and based on their directions; a causal loop diagram was formulated. Upon agreement, the causal loop diagram was converted into a stock and flow diagram and the model was simulated between 2015-2025.
  4. Four scenarios were simulated: a) Increased frequency of concentrated feed for the cattle, b) Produce compost manure and sell, c) Start rearing Holstein Friesian (HF) cows, d) Combination of Scenarios a, b &c.

Results and Discoveries:

  1. The simulation results reveal that, under the current situation, it is infeasible to invest in capacity expansion projects. The entrepreneur should focus largely on vermicomposting as a byproduct as it fetches a higher premium than the current method of manure disposal. The encouraging factor is that the infrastructure and the labor requirements are very negligible in comparison to the other options.
  2. The model enables the researcher to see the impacts of the feedforward, and the feedback loops which are present in the system.
  3. It contradicts the conventional belief that rearing HF cows will lead to high milk production. Rather, the simulation demonstrates that, a much organic approach of working on vermicomposting is the policy lever that fetch the profit with least capital infusion and early breakeven.

Citation to the base paper: Kamath, V., and Biju, S. (2022) ‘A System-Dynamics based approach towards sustainability of a rural milk dairy venture’, Int. J. Enterprise Network Management, Vol 13, No. 2, pp. 140-154

Publication Date

2022

Recommended Citation

Kamath, V., and Biju, S. (2022) ‘A System-Dynamics based approach towards sustainability of a rural milk dairy venture’, Int. J. Enterprise Network Management, Vol 13, No. 2, pp. 140-154

Publication Date

2022

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