Dynamic compaction is a ground improvement technique by densifying loose soil using a heavy drop weight to increase the bearing capacity of the ground. The numerical simulation of the dynamic compaction process is challenging as it involves large displacements, plastic deformations, impact compaction and dynamic soil exchange. The present paper presents a numerical simulation of the dynamic compaction process on dry soil by using the granular material point method. As the dynamic compaction process involves soil transitioning into the disconnected state during the rapid impact of the tamper into the ground, the Generalized Interpolation Material Point Method will not be able to successfully model the compaction process. Therefore, the present analysis uses the recently developed Granular algorithm combined with the Generalized Interpolation Material Point Method to simulate the dynamic compaction process. The simulations replicate qualitatively the results observed in the field and show that with further refinements Granular MPM can be well used to replicate and predict the effect of dynamic compaction.