Value chain modelling: Systems Dynamics Approach

System Dynamics is a modelling approach that examines the dynamic interactions and feedback effects among different components and sub-components of a system, using integral calculus and differential equations represented through a graphical representation. In a value chain context, System Dynamics provides an analytical tool to analyses a problem from a whole chain perspective (producers, intermediaries, consumers) to facilitate understanding of trade-offs (winners/losers – based on value chain actor profit) under different intervention scenarios  such as new/improved production technologies and market diversification such as new trade channels. It captures value creation from products and by-products such as leather; environmental footprint through inclusion of GHG emissions and resource use along the chain (economic, consumer, ecological values); broader understanding of value beyond value chain actor profit (jobs creation, multiplier effect). See Dizyee et al. (2017) for more details of System Dynamics application in value chain analysis.