Development of manufacturing collaborative model for developing countries: a hybrid simulation analysis (a case study of Indonesian manufacturing SMEs collaboration)

To improve the performance of manufacturing collaborative system especially for SME clusters in developing countries, System Dynamics (SD) and Discrete Event Simulation (DES) can be used as tools to model the macro level (e.g. policies, strategies) and micro level (e.g. production capacity, processing time, production flow) variables of a manufacturing system. These simulation tools are commonly used separately. However, as a separate system, the model lacks in explaining the interactive effect between the two variable levels. When combined, although has not been used extensively, the simulation tools as a single model may fill in the gap. The research objective is to develop a combined simulation model that is capable of integrating variables in both levels which shows their interaction and effect on the collaboration network performance. It also aims at improving the performance of the collaborative model by proposing a more suitable collaborative model of SMEs.The research was carried out in three stages, they include identifying, modelling and developing a strategy of collaboration between SMEs. A survey was conducted to identify the collaboration strategies that currently exist. The next step was to develop a simulation model, which is capable of accommodating both macro and micro level variables, using SD and DES simulation as single model. A validation and verification process was conducted to ensure the validity of the model. SWOT (Strength, Weakness, Opportunity and Threat) analysis was also carried out to analyse and determine the characteristics of each model and develop strategies. A sensitivity analysis was also performed to predict the SME collaboration performance.The study found that the performance of a collaborative system is mainly affected by innovative product development, financial support, and broker role. This research successfully combined the advantage of SD and DES model to interrelate various variables, which affect the productivity of a collaborative network. The result showed that both simulation models could be used simultaneously for improving SMEs performance. Hence, for the manufacturing system, this technique offers an alternative to combine SD and DES simulation, and suggest better collaborative model for SMEs