Using system dynamics to support strategic decision-making: the case of digitalization in modular construction company

Kaya, Hazal Deniz
Digital technologies have become a part of the transformative change of industries for more efficient production, business models, and value chains with the onset of Industry 4.0. The AEC business had to follow this trend due to globalization and the increasing complexity of projects, and the use of digital technologies for innovation has become increasingly common. However, it is common knowledge that the construction industry takes a long time to incorporate new technology and adapt business models to digital environments. In this regard, this research proposed that the digitalization of the construction companies and the effects of different technology integration should be analysed as a holistic approach by approaching it as an objective to create a digital ecosystem, integrating the strategic goals for both the processes and people. Hence this research proposed to utilize business process engineering and simulation with system dynamics modelling to investigate the impacts of digital technologies on project objectives and its existing management dynamics. The system dynamics model is created with the contribution of an experienced Turkish modular construction company. According to the strategic position of the company in terms of digitalization, different strategies are considered for maturity levels of BIM, Enterprise Resource Planning systems and RFID technologies. The simulation tests conducted with the company indicated that the model enhances strategic decision-making by depicting the causalities, and feedback between the decisions and their consequences for technology integration.


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Citation Formats
H. D. Kaya, “Using system dynamics to support strategic decision-making: the case of digitalization in modular construction company,” M.S. - Master of Science, Middle East Technical University, 2022.