This paper discusses the process improvement of a satellite system integration based on the dummy panel method. The system integration procedures using a traditional sequential flight model (FM) panel and the proposed dummy panel are modeled using a design structure matrix (DSM). A discrete event simulation using the DSM is developed to assess the two different integration and test strategies. The proposed DSM-based modeling and simulation enable clear work policies, effective input data gathering, and probabilistic results. The approach also offers decision-making and risk management guidelines, including a cost–duration trade-off study that considers real-world scenarios and their potential impact on the schedule and cost. The effectiveness of the proposed approach is demonstrated through a case study on an actual space system project.