Research on value-added service strategy of the third-party platform based on system dynamics

Abstract

As a service-oriented manufacturing platform, the third-party platform has become an important channel to support multi-value chain collaboration. The purpose of this paper is to explore the value-added service (VAS) strategy of the third-party platform for manufacturing. A multi-value chain system consisted of manufacturers, suppliers, and a third-party platform are considered in this paper. Based on determining the main variables’ causal relationships and building the corresponding quantitative formulations, this paper proposes a system dynamics model to simulate and analyze the third-party platform’s VAS strategy. The simulation results show that the platform should adopt a low VAS level in the early stage of development. In the middle stage of development, the platform should first increase the VAS level to attract manufacturers to access, and then reduce the VAS level to attract more suppliers to access. After entering the later stage of development, the platform should improve the VAS level. We also find the platform should adopt a low VAS level when the difference between two types of suppliers’ parts quality is small but high level of VAS when the quality of two types of suppliers’ parts differs obviously.