Conference Proceedings
This paper describes the use of System Dynamics (SD) for making a claim for Disruption and Delay. The case concerns design management of a large development project. Extensive group workshops (GDSS) with the managers, based on the cognitive mapping technique and association software tope COPE, showed that the client-contractor interaction process had set up dynamic feedback loops creating Disruption and Delay to the project. In order to qualify the extent of the Disruption and Delay, the cognitive map was transformed into an "influence diagram" and thence through the acquisition of numeric data into a large SD model. The development of the two continued in parallel, informing and checking one another. As well as simply providing explanations of trends and behavior, the SD model had to reproduce the planned and actual out-turns explicitly for it to be a creditable explanatory tool. The paper will draw lessons from the case study on the process of moving from cognitive map to a SD model, and the mutual benefits of joint development, as well as more general lessons about combining soft and hard methods.
This paper describes the evaluations results from an unsuccessful case study. In this case study, system dynamics modeling was used to support the development of an implementation plan for a corporate strategy. Three modeling sessions were conducted with senior management, which were unsuccessful. A detailed analysis of the evaluations interviews with several of the participants had identified the main cause for this failure. These causes turn out to be threefold: Firstly, most of the participants were unwilling to discuss openly this politically sensitive issue, secondly several errors were made in project design and thirdly the scope of the strategic issue is at stake was too broad to tackle effectively within the time frame allotted to the project.
Several important lessons are drawn from this project. These lessons are formulated as designs guidelines for future system dynamics modeling as such, but rather to underlying management consulting skills required to conduct any strategy support project with senior managers.
An optimal control-based decisions support model is developed which allows managers and future managers to gain hand-on experience with product portfolio management in a dynamic micro-world. In this micro-world, they study one of the several scenarios, set objects and importance hierarchies, create action plans and control the system over time en route to their objectives. The system is demonstrated with data from an actual product portfolio management case.
Using the system, a manager or player can gain sophistication with decision-making as well as assess the capabilities of dynamic models for decisions support. Working with the models gives players a feel for such important insights, as the lag effects of response, the differential impact of various marketing tools, cross-elasticities, and the potential for cannibalization. A manager can devise promotional strategies to achieve specific sales results for a particular brand or product line, test those strategies, and learn as the system evolves. Backing up the micro-environment is a discrete-time optimal control model which allows the system to be optimized from the perspective of a decision-maker. Players can test their own strategies against those of the optimal control "Shadow Player".
Used as an optimization-based simulations tool, the model allows flexibility in the testing of alternative strategies and scenarios which affect achievement of product portfolio objects. The model focuses on the overall objectives of the portfolio while recognizing the objectives and dynamics of the products within it.
A social system is unlike a natural system, because its behavior is determined by ethics, values and purposes. Yet it can be compared to a natural system in terms of self-maintenance. To maintain itself, a social system reproduces roles, functions and authorities, not it's basic components, individuals. This is because, social system are purposely designed by human begins for human purposes. The ethics which guides management of social system is a kind of rule ethics relying on rules of behavior, laws, and taboos. The rule ethics and its basic value, rational calculation, disables the possibility of social system to cope with rapid or serve environmental changes. It also creates managerial conflicts which are difficult to solve within the frame of reference of the rule ethics and its association values. These conflicts are results of the tension between: control and semiotic freedom, shared culture and diversity, and command hierarchy and self-organization. To diminish these tensions, we need another kind of ethics, an increased development of human consciousness.
For the past seven years, the modeling group at the
University at
Our purpose is to initiate a larger discussion of shared scripts and techniques for group model building. The discussions is divided into planning for a group model building conference, scheduling the day, particular scripts and techniques for various group model building tasks, and closing a group modeling conference.
This paper is the second in a pair presented in this volume. The first paper presents a theoretical view of mental models appropriate for carrying out empirically-based research on system dynamics modeling interventions. Mental models consist of three types of measurable sub-models – end models, means models, and means-ends models. The means-ends models may be thought as containing either detailed “design” logic or much more simple “operator” logic. This paper presents an empirical test of the impact of interventions intended to improve design versus operator logic for 53 participants in a dynamic learning laboratory with a task centering on implementing welfare reform over a simulated twenty year period. Results suggest that providing managers with high level heuristic results from modeling interventions is necessary condition for achieving improvement in system performance. Focusing on operator logic is key to improving managerial performance of dynamic tasks.
The problem to be addressed is the dynamics of the chain growth polymerizations process via free radicals. The process consists in a series of chemical reactions by which a macromolecule is formed by the addition of many structural unites called mers. The reactions taking place are initiation, propagation and terminations of the growing macromolecule or molecular chain.
The problem was focused under the General Theory of Systems and the methodology of System Dynamics. This work is an example of interdisciplinary interaction between Chemical Engineering and Systems Engineering through System Dynamics methodology.
The modeling of polimerization processes is an up to date topic of both scientific and industrial practice importance. The developed model is based on the especies balance equations and also on an isomorphism with population models.
The model is composed of a set of only sixteen, but very complex non-liner differential equations, whose solution is very restrictive with respect to the simulation time interval used, due to the great differences in order of magnitude of the characteristics time of occurrence of the various events taking place in the process. In this particular, the authors consider to have made a contribution to establish criteria to quantity what is called in the literature as the appropriate simulation time interval.
The proposed model is ahead of the traditional models of polimerization, in as much as the second ones predict only the behavior of the stable species and the chain lengths average, whereas the proposed model includes besides the dynamics of the unstable species. On the other hand, the proposed model excludes the seudo-stationary assumption, on which, according to our results, is not a completely valid. As a general conclusion, the Dynamics System methodology appears to be an effective problem-solving tool in interdisciplinary environments.
Environmental management is a complex dynamic process, which involves taking decisions regarding different environmental components and socio-economic agents. Within in the contexts, simulations games are extremely powerful learning tool, allowing the decision maker (player) to formulate and test the results obtained with the implementation of alternative environmental managements strategies, which is often impossible to perform in real situations.
ECOMAN is a simulation game, where the players are
environmental managers who are responsible for a region, trying to cope with
the different agents, media and uses in order to achieve environmental quality,
and social welfare objectives.
The player has a limited budget to allocate to several environmental management
tasks, which is dependent on the health of the economy of the region. Each year
a score is computed taking into account environmental quality, service levels
and economic activity.
The game is based on a system dynamics model developed in STELLA II, simulating
the major interactions between the socio-economic and the environmental
system. The model was implemented with a
multimedia interface integrating numerical, graphical and qualitative
information using Supercard and Quicktime for the display of video images.
The Importance of quality cost benefits is sometimes not
fully recognised by industrial managers.
Quality cost money. Industrial
managers recognize this and tend to be afraid of spending on quality. But quality also earns money. Industrial managers do not seem to be fully
convinced of this fact. Unfortunately,
even existing literature on the subject does not encourage investing for higher
quality. Most of the cost models about
quality deal with the quality improvement and the costs associated in achieving
the desired level of quality, but fail to incorporate the benefits of improved
quality.
In this work, an attempt has been made to develop a quality costs model which
incorporates the benefits. The quality
cost elements have been drawn from various standards sources such as British
Standards and American Society for Quality Control publications on quality
cost. The benefits from investing for
quality are taken from recently published case studies and reports as well as
from our own experiences. The elements
of quality related activities of design department, such as design standards,
training design staff and test equipment are identified. The contribution of
each individual element, starting from estimation of looses due to poor design
to preventions of poor design is isolated and linked dynamically so that costs
and benefits are demonstrated through time.
The quality costs and benefits model was developed using the System Dynamics
Modelling approach and simulated using the computer software package
“Professional DYNAMO Plus”. The simulated results demonstrate the extent to
which prevention investment is justified by future earning.
It is felt that the model can be a significant addition to course material for training programmes of industrial managers. It allows the user to explore the consequences of different quality management policies such as the amount of investment and the nature of investment on the profit performance and delay before profits are increased in and organization. It is hoped that the model will serve as a useful tool in the hand of decisions-makers, encouraging them to invest more in prevention activates.
This is the second paper in a series that aims to start a debate on issues involved in university-level system dynamics education. The first paper argues that the field has not experienced growth that one would expect from its potential and identifies several issues that need to be addressed by the system dynamic community, before the field can proliferate in universities. The second paper tackles some of those problems. More specifically, the paper discusses the academic definition of system dynamics: What is the academic core of system dynamics? What other objects are immediate relevance and importance with respect to this core. The paper offers answers to those questions. The second issue that the paper deals with is the problem of terminology. I discuss different types of terminology problems, the most significant being system dynamic, the very name of the field. System dynamics having an established meaning in mathematical and engineering sciences, does not convey the specific meaning that we wish to attach it. I discuss various potential problems caused by this situation. I then offer a short list of alternative, more specific names for the field. I conclude that, once the academic issues are rigorously tackled, the university-level system dynamics education should experience growth, which would be a major step toward activation an exponential growth process in the field in general.
Model validation constitutes an important step in system
dynamics methodology. Validation is a prolonged and complicated process,
involving both formal/quantitative tools and informal/qualitative ones. This paper first provides a summary of the
philosophical issues involved in model validation. We then focus on the formal model validation.
We offer a flowchart that describes the logical sequence in which various
validations activities must be carried out.
We give examples of specific validity tests used in the three major
categories of model validations:
Structural tests, structure-oriented behavior tests and behavior pattern
tests. Finally, we focus specifically on
the logic of the behavior pattern validation and illustrate it on a mutli-step
validation procedure. Currently, we are in the process of implementing this multi-step
procedure on micro-computers, embedded in a friendly user-interface.
Despite the importance of computerized information system,
many MISs are left idle or used only partially, having exceeded their budgets
or time allocations. The basic problem
is that critical interactions between software engineers, users, and the
organization have been neglected. The
reason for this neglect is the inter-disciplinary nature of the problem. There is a basic conflict of interest between
managers’ need for efficiency, users’ desire for quality of working life, and
software engineers' quest for sophisticated technical solutions.
We have developed an integrated theory of the detailed processes and
transformed it into System Dynamics model.
Running the model against three time series of data from one
organization that has introduced an MIS, we reproduced an average of 84% of the
variances in the data. Our tentative
conclusion is that introducing MIS is a special case of directed organizational
change that requires cooperation between software engineers and
It is widely believed that the world is entering the
Information Age, and telecommunication companies must make critical investments
decisions based on how much information customers will want to move in the
future, Understanding and preparing for the range of possible customers demand
scenarios is vital for long-term success in an increasingly competitive
market. However, detailed forecasts are
impossible to make since the market is as yet undefined. Scenario modelling is useful in developing
the understanding telcos need to achieve success.
We have developed a system dynamics model to investigate the effects of
different business and technological drivers on the demand for future
telecommunications services, using the software tool iThink. Drivers include the number of people
teleworking and increasing computing powers.
These interact to produce usage dynamics for generic services covering
conversation, messaging and data transfer, which are then used to calculate
resulting network traffic.
Our results suggest that the key uncertainties are the rate of improvement in
general IT sophistications, and the extent of teleworking. High growth in both of these produces rapid
growth in peak traffic, whilst low teleworking delays that growth. Slower improvement in IT sophistication
severely limits growth, since increasing computing power could stimulate large
volumes of traffic. Small increases in
the use of video applications also produce significant traffic growth, and
these factors combine to give large uncertainties. The behavior of this system is discussed with
reference to individual business sectors, demonstrating system dynamics as a
useful approach for investigating telecoms supply-demand systems.
We describe the development of a meta-level framework to be
used as a structuring and controlling mechanism during management development
workshops.
The framework is constructed around the use of system metaphors and methodologies
within a microworld workshop environment.
Relevant elements from system methodologies are employed as transitional
objects within these microworld environments, in order to provide a creative
stimulus and reduce participant anxiety.
The paper uses systems thinking to interpret the dynamic interplay between social, political, and institutional forces that have influenced the management of a large urban water authority. This interpretation is used as a framework for assessing recent government initiatives to introduce competition into the water industry. The study is based on 100 years of history of the operation of Melbourne Water and current proposal to vertically disaggregate the business and to use a combination of industry regulation and yardstick competition to manage the industry. The paper attempts to demonstrate the importance of adopting a systemic approach to understanding the complex array of issues involved and to record some of the practical difficulties encountered in using this approach within a highly turbulent environment.
This paper examines the introduction of information system into the new environment of the National Health Service since restructuring in 1989. Taking its approach from Soft Systems Methodology, it looks at cultural analysis in the context of the development of decision support systems for hospital managers and medical staff. Drawing on the deeper cultural analysis developed by Schein, it examined the problems which face systems developers when attempting to seek an accommodation of views between groups which not only have different requirements but significantly different outlooks predicated by their roles in the hospital environment. Particular attention is focused on the survival instincts of these two groups when faced with an environment which is changing rapidly. The medical profession is seen as one which sees its former pre-eminence within the hospital threatened. This may have adverse effects on the development of system for doctors and managers alike but, unless the cultural dimension is addressed, solutions to hospital information problems will, at best, be partial.
The use of system dynamics (SD) is proposed to assist
project managers in examining the consequences of their resources distribution
plans. Justification of the selection of
this technique is given, in particular why it is purposed as an alternative to
statistical forecasting techniques. The
focus of the research is to provide insights into how to reduce schedule
slippages, which is thought to be a common dynamic behavioral problem. One objective in reaching this goal is to
identify common SD structures.
An overview of the original SD research contribution to the software
engineering discipline is given. A brief
description of the problem tackled and the model findings are outlined. Criticisms of the research process are developed
to justify parts of our approach. To
ensure that this practical research investigations is both relevant to managers
and scientifically rigorous, a selection of both qualitative and quantitative
methods are suggested to assist with the first objective. These are briefly justified and discussed in
this paper.
This paper reviews a recent period of change in traditional manufacturing environment of a large oil refinery, and the role of systems thinking techniques in this development process. The focus in on how the gradual adoption of these methods as part of normal working practices has contributed to changes in attitudes, behavior and performance. Attention is directed to the way the methods are themselves proving to be a vehicle for cultural development, as well as being of the toolkit used to analyse specific issues.
The paper describes the way several techniques have been
introduced, applied and combined. There
is a commentary on how these approaches have helped to induce a shift from a rather
intimidating fire-fighting mentality to a widespread embrace of the quest for
structural improvements. This shift and
the adoptions of the techniques are, of course, mutually reinforcing. What is of particular significance is the way
the virtuous circle was initiated. It is
concluded that the approach was successful largely because it was consistent
with the broader requirement of change-management and compatible with
fundamental aspects of the predominant organizational culture.
While this is an ongoing process of transformation, the paper introduces a
framework to conceptualize the insights which have emerged so far. It is intended that this will facilitate
their further application and hence support the broader learning process.
For policy makers in
The importance of this topic lies in the resistance of the criminal justice
system to change and the high total cost of the system. Recent policy goals of
The global climate is a large complicated system with many
feedback loops connecting the different sub-systems. In recent years there has been an increase in
the public's awareness of global warming and the greenhouse effect. The public understands that there is some
connection between the human emission of greenhouse gases and global climate
change. Experts in this field have been
analyzing these connections for years and are still unable to give definitive
answers to questions concerning the direct link between emissions and
temperature change. Policy makers have a
desire to intervene in order to limit the amount of emissions. At this point in time available answers are under
debate and are unclear, or the model used by the scientific community are too
complicated for policy makers to understand.
The purpose of this global warming model is to be small, conceptually clear,
and accessible to nonscientists. The
model contains all of the feedback loops hypothesized in the scientific
literature. However, due to its small
size it is aggregated to a global level.
This level of aggregation will help to make the model more
understandable for policy makers. The
global aggregation will allow policy makers to focus upon the global effects
rather than the details of the climate system.
An effort has been made to develop a system dynamics simulation
model for soybean production in
Privatization of most enterprises in
This paper explores the dynamics of management development to meet the needs as
markets are freed and companies are privatized. Particular attention is directed at the fact
that many needed skills essential to success may not be taught in the normal
management school programs. From this
observation emerges the need for a program of management development uniquely
designed for recently privatized companies and for those soon to go through the
process. In addition the conclusions
contribute insights to the current debate whether to privatize all corporations
within a very short period or whether to proceed more gradually.
This paper contemplates the prospect of the complementary use of hard, soft, and critical systems methodologies, becoming a more established practice among the diverse company of operational researchers and management scientists in academic, commerce and government, who have been trained in systems thinking and apply its language and concepts in dealing with organizational problems.
The paper takes the line that because matters concerning methodology always embody deeper structures of meaning, and meanings are largely culturally determined, it is worthwhile drawing upon ideas from the literature on organizational culture to illustrate some of the key factors that are likely to obstruct this and other similar initiatives. From a culture prospective, transitioning from the existing specializations of systems science towards methodological complementarism is conceptualised as requiring a form of organizational learning. Learning is contingent upon the existence of a broad set of propitious circumstances; a scenario, it is argued, that is not met in this particular case. Although the idea of complementarism is the principal focus of the paper, much of the argument applies equally to other attempts to deliberately intervene in the culture of systems science.
We investigate parts supply from one supplier to a
manufacturer who operates a very variable final assembly schedule with kanbans
for parts supply to the production line from suppliers.
The information flow includes kanbans for resupplying the line from the factory
store and restocking the factory store from the supplier, one week ahead
forecasts of parts requirements, 8-week ahead requirements and updates orders
supplied weekly, and a six month MRP schedule supplied fortnightly. The supplier uses these to schedule raw
material preparation, initial assembly on a bottleneck machine, and
finishing. This is challenging given the
conflicts between the pieces of information.
We investigate ways to improve total system performance, particularly inventory
levels and easier production scheduling of critical machines, given the delays
and structure of the system, using system dynamics models built in ithink!
Kanban numbers can be reduced without risking production interruptions. The one week ahead forecasts offer little
useful information to the supplier.
Shifting to a simpler scheduling mechanism for the initial assembly is
helpful.
We have investigated two processes in the manufacturing logistics system, parts
flow internal to the manufacturer and to the supplier, and the linkage between
parts usage by the manufacturer and parts production by supplier. They can be simplified and improved, reducing
inventory holding and hence cost, without compromising the overall
responsiveness of the manufacturer which is a distinctive competitive
characteristic. Simplified information
flow processes allow for easier, better operation of total system.
The study analyzes the impact information network within the waste recycling market on the performance of public policies designed to develop the recycling market. Two typical policies are reviewed with an experimental procedure of partial and whole model tests. A system Dynamics model of waste recycling market is used as a laboratory setting for this study. The research findings suggests that well-intentioned policies can inadvertently lead to dysfunctional performance within a localized information environment. Delayed and distorted information feedback in the multi-stage structure of the recycling market further complicates problematic policy outcome, or market instability. This study proposes an information policy of integrating vertically the information network in the recycling market in order to improve the performance of market development policies
This paper discusses the dynamic simulation model of the
Model conceptualisation is the most difficult system
dynamics skill to acquire, practice and teach.
The advent of user friendly simulation tools; STELLA and ithink, have
made the task of model constructions and use much easier. Model conceptualizations by contrast remains
as difficult server as ever.
Experiences in training managers in system dynamics show that it is a
relatively simple task to turn complete beginners into competent and confident
simulators. The capability to recreate a
model from ithink map and in a written description of operating policies is
quickly acquired, as is the ability of modifying that model set to test out
possible solution to problematic behavior.
The problem arises when these proficient simulators are asked to conceptualize
a simple two loop model from a problem descriptions, presented in the form of a
newspaper article. This task is found
very difficult by most course members.
The paper describes the development of a new technique to assist with the model
conceptualisation process. The method
integrates archetypes and their corresponding generic Models into a framework
that helps modellers move from a problem descriptions to a first past ithink
model and/or casual map.
An application of the method, to aid conceptualisation of a model of Government
funding of housing association is described.
A Continuous Improvement Process
Maintenance management has become a field of important
development according to the operating needs of production planning systems and
the impact of new technologies in the industry.
The processes of production flow creation and inventory control in the
modern factories lead to a more sophisticated maintenance system to ensure low
failure rates and reduce accordingly failures consequences, which is a must in
these kinds of environments to meet the production schedules.
In this paper a maintenance system is modelled to study the effects of
different policies that can be applied to reach above mentioned targets. Moreover the conditions required to create a continuous
improvement mechanism for the system are analyzed. Model validation and simulation results are
obtained and presented for a real problem in the Spanish industry.
Projecting Model Behavior in the Absence of a Model: Results of a survey
One of the advantages commonly put forward in support of the system dynamics methods is that managers find it difficult to trace dynamic consequences of cause and effect relationships even in simple systems. While this may be intuitively appealing as one of the justifications for existence of system dynamics, there is a need to accumulate a body of evidence which results from putting this assertion to the test. The paper reports the findings from a questionnaire which has been administered to over one hundred undergraduates and postgraduates covering a range of business management specialisms. Respondent were asked to decide between two manufacturing technologies, exhibiting quite dissimilar cost structures, with a view as to their future profitability under four different demand scenarios. The questionnaires were administered twice with a three month gap between during which the answers to the first one were revealed, and on the second occasion the rubric was altered to incorporate feedback into the situation described. The competing technologies and their associated cost structures reflect very real policy choices and so the outcome of the exercise has a message for manufacturing industry as well as the system dynamics community.
In system dynamics we seek to understand the relationship
between the structure and the behavior of dynamic systems. In problem solving, for instance, we must
identify the structure underlying problem behavior and find how the structure
can be modified to create a more desirable systems behaviour. To enhance such an understanding, we utilize
the graphical techniques. Whether in
print or in software, however, there has been a significant gap between our
representation of structure and behaviour.
In this paper, we first present a series of ways to link structure and
behaviour such that behaviour can be more easily understood on the basis of the
underlying structure. These techniques
are computerized using PowerSimTM.
Within the framework of an EEC research project on distance education for
professionals, JITOL (Just In Time Open Learning), we have investigated how to
facilitate System Dynamics distance education on electronic networks. One of the main challenges consists of
finding an effective way to present the results of a simulation. Such an
interpretation of simulation results is normally partitioned in accordance with
the various phases of the system development, portrayed by the simulation, and
requires that references be made to the assumptions embodied in the underlying
simulation model.
Consequently, the author or any other user of a model must be allowed to
comment on the various phases of a specific dynamics development. Moreover, these comments must be made
available to any reader of the model, ie anyone who runs the model under the
conditions specified by the author or user.
And these readers must be allowed to respond by adding their own
comments to the same fragments of the model development.
This paper outlines a technique developed to, at runtime (ie as the model is
running), link such annotations to graphs that represent simulation results,
and to make such annotations available to readers at runtime when they inspect
that specific simulations.
A new management institute, Der Rutli Fuhrungskrafteseminar,
was established in
The properties of the simulator originate from the characteristics of the
underlying software. Consequently they
can be applied generally to any system dynamics based management
simulator. In particular, the simulator;
(1) the simulator is a multi-group simulator utilizing any personal computer
network that supports MS windows;
(2) The simulator allows the user not only to submit decisions to the server
that calculates and returns a new state, but also to formulate and try out, on
their local computer, their own strategies over any strategic horizon;
(3) the simulator gives the user access to;
-the underlying simulation model (to an extent determined by the
administrator);
-The tool by which the simulation model was built, allowing the users to
formulate and test their own dynamic hypotheses.
In this paper, we describe these characteristics of a new generation of
simulators for management training, illustrated by Der Rutli Management
Simulator, and we discuss the potential implications of taking advantage of
these characteristic.
In October 1993, a group of 7 academic institutions
submitted to the ERASMUS Office of the European Union (EU) in
When the ICP is established, it will receive a grant to support a number of students visiting host institutions abroad in order to receive a formal training in the theory and practice of system dynamics. The program will also support the exchange of faculty and system dynamics curriculum development.
The system dynamics method has proven particularly useful in
social sciences and in public and private management. A large number of
enterprises currently apply system dynamics in their design of policies and in
management training. The system dynamics method is taught and applied in
prominent management schools, schools of social science and technological
institutes in Europe,
This paper describes some possibilities and challenges that
arise from this program. It also indicates how we could initiate a research
program in
This paper demonstrates the use of system dynamics in the
examination, evaluation and reformulation of business policy. It describes the consultancy and modeling
process used to examine the recruitment and promotion system of a large
company.
The management felt that the short-term decisions they were making,
particularly about how many graduates to recruit, were endangering their
ability to manage the system in the longer term. They were finding the there were too many
staff at middle management grades, whilst they were doubtful that they were
developing the senior management of the future. They further believed that the system, as
currently operated, gave them little ability to control the long-term
availability of staff. It was decided to
initiate a study, using system dynamics, to understand the dynamics of the
manpower system and study the policy options available for controlling the
system. The model enabled management to
increase their understanding of the system and evaluate their current method of
decision making.
The model demonstrated that the problems were indeed caused by the system, and
that managers had adapted their decision making process close to the optimal,
given the constraints in which they were operating. A new system of recruitment and promotions
was defined, tested and implemented, which overcomes many of the problems
identified in this study,
This paper describes the results to date of an investigation
into the role of a system dynamics “microworld” model in helping a
not-for-profit organization (charity) become more “business-like” in its strategic
management, and more able to evaluate impacts and opportunities in its ever
more competitive environment. The
organization- the local division of a relationship advisory service in the U.K.
- in common with most other charities is facing a more turbulent environment
with major uncertainties in government grants, greater competition for
voluntary donations, and changes in its perceived role. This requires the organization to put much
greater emphasis on effective management, but this may be regarded as
diverting, and even in conflict with deeply held beliefs, by Board members,
paid managers, and counselors and volunteers.
This experience to date suggests that the development and utilization of a
microworld model of the organization and its environment help its member to
envision the full implications of possible strategic developments. These developments include the impact and
timing of direct advertising and the offering of contract advisory services to
firms concerned that redundancies and other situations may put their employees
under the sort of stress that could seriously effect their domestic
relationships. This approach clarifies
and aids the reconciliation of "business" performance measures like
client contributions, cash flow management and training investment with such
core concerns as counselor moral and the service provided to it's
"clients".
This paper presents a critique of the atomistic ontology and empiricist epistemology which inform most current definitions of the concepts information, systems and, hence, information systems in the Information System (IS) literature. The notion of information as an objectively given quantifiable 'force' emanating from the real world and endowed with the essential property of dissolving uncertainty; or as possessing the same essential property but as consisting of structured or processed data, i.e. atomistic ‘facts’, about the real world are argued to be unsustainable, on both philosophical and practical grounds. It is argued, furthermore, that the notion of systems as an ontology in respect of goal seeking cybernetic machines unproblematically specifiable in terms of their boundaries, of their input and output, and of their objectives is not inappropriate to the socially-based systems in terms of which an IS must be defined, but also fails to consider the ontological, and consequently epistemological, depth implied by this concept. In view of these arguments, an alternative conceptual practice is explored by suggesting that the concept system be taken as an epistemological tool to be deployed in respect of complex coherent 'whole-entities' characterized by their emergent properties and, in the case of socially-based systems, by the essential autopoietic nature of their modes of regulation and self-representation including, above all, language. It is also suggested that information should be considered as a set of fundamentally, arbitrary signs whose 'emergent' properties i.e. syntactic, semantic and pragmatic, are intersubjectively negotiated between international organizational agents and, as such, inseparable from the forms of social life which they sustain and in which they are generated. This alternative conceptualization, proceeds from an ontology which acknowledges the essential 'depth' of its key thought objects, by virtue of the emergent properties attributions to these objects, in contrast to the flat atomistic ontology currently dominant in the IS field. Such an alternative conceptual practice, we argue, provides an initial theoretical framework in which to ground the currently ill-defined, “emergent perspective”, on the relationship between ICT and organizational change, identifiable in the IS literature. While as regarded IS practice, this re-conceptualization is found to be congruent with the object oriented approach to IS development which is currently attracting increasing practical attention and which appears to provide the basis for a common and intuitively meaningful language with which to bridge the gap between IS end-users and developers.
Management practitioners have always felt the need to understand organizational contexts and processes. Consequently many different theoretical bases have been used to facilitate the evaluation. However the focus on existing approaches has primarily been on the ‘formal’ aspects of the organization. This has often resulted in inadequate and poor analysis of various complex managerial situations. In viewing organizations as communications systems, this paper introduces the responsibility analysis approach which helps in presenting a comprehensive picture of an organization environment. At a very generic level, organizations are viewed in terms of three sub-systems; technical, formal and informal. When conducting a responsibility analysis, the endeavor is to identify the responsible agents and capture the norms associated with each action. In doing so, we seek to understand the underlying repertories of behavior. This produces a high level specification of the organization and its attendant responsibilities, thus allowing a comparison to be made with the implicit and explicit structures of responsibility. The paper demonstrates these concepts with examples drawn from a National Health Service case study.
This paper shows that viewing dyadic communication from the
perspective of servomechanisms and system dynamics rather than the cybernetics
perspective (see
This paper reports the finding of an internal McKinsey
research and development project designed to test the value of applying System
Dynamics thinking to the life insurance industry. The aim was to understand better how
management decisions and actions can affect the success or failure of a typical
direct sales life company. The study
compared the evaluation over 20 yeas of two companies, Equitable Life and
London Life. Starting out in 1975 from
virtually identical competitive positions, Equitable has become the
We found System Dynamics a powerful means of identifying which managerial
actions had accounted for the extraordinary divergence of the two
companies. The lessons learned include
many counter-intuitive insights that have relevance for any life company
manager. Through simulation we were able
to isolate which management actions made the difference to long term
performance. In particular, we show how
attempts exceed the maximum sustainable growth rate specific to any individual
company can lock it into a slow but relentless spiral of decline, from which
there is little hope of escape. This
growth ceiling can be quantified and we also identify a number of a long range
early warnings signs. Consequently, we
believe that our conclusions are likely to change the way life companies are
managed in the future.
This paper wants to report about an approach to make German
pupils familiar with the problem of system dynamics, to promote the
comprehension of complex system, to teach them something like "thinking in
networks".
To reach this aim we employed a tool for modeling and simulating, comparable
with well-known systems as Ithink or POWERSIM, but able to run on simple PCs
under MS-DOS.
Using this tool we have developed the following four units (the subject in
parentheses):
-Ecosystem forest (ecological balance, biology)
-Flows of carbon dioxide (chemistry)
-Growth (mathematics)
-"Tycoon" (economy)
Two of these units, "forest" and "economy" are the basis of
our research. In 11 groups with 238
pupils we made pre-tests, video recording and final tests,
The results in the field "model thinking" were remarkably better then
in a polite study, initiated two years ago, the semantic and the syntactic
correctness of the models have increased as well.
This will be evaluation of several items, regarding the aspects
-prediction of behavior
-forms of presentation, and
-level of net structure.
Infrastructure induced development is a process dominated by feedback in that it features the synthesis of demand and supply functions. For the demand function, we are seeking the infrastructure improvement requirement to accommodate a certain socioeconomic need; for the supply function we want to know the level of service obtained for a certain infrastructure improvement. The objectives of the project from which the paper is derived is to develop a methodology for generating models that can be used to by planners and decision makers as instrumentalities for making reliable estimates of the economic health and productivity benefits and of potential infrastructure investment, and for linking infrastructure investment, users benefits, and succeeding economics development to provide a basis for rational policy formation. The results is a methodology that permits one to answer the question: What would be the economic impact A, the social impact B, the demographic impact C, and the land-use impact D, the environmental impact E, and the users benefits F over geographic scale G for an infrastructure investment H at time T? The approach is illustrated at both the regional and national levels.
The new Colombian construction makes heavy emphasis on
issues related to decentralization and community participations. It intends to incorporate in Government the
appropriate social actors to accomplish more effective administration.
In this sense, definitions have to be made in relation to regional
responsibilities in the area of Health, Education, Housing, Public Services,
and Employment, in order to obtain the appropriate transferences of resources
from the central Government to the communities.
Laws on these issues are now being discussed in Congress.
Preliminary results show how System Dynamics proves to be an appropriate
methodology to evaluate resources needed, community participation and
institutional performance.
The model developed may be used as a training tool to help community leaders to
understand the complexities involved in the decentralization process. The model incorporates behavioral patterns
and at the same time provides system performance and effectiveness indications
(Community participation and accomplishments).
The analysis of capacity levels and there location is of
vital importance in the design and management of supply chains as it is
commonly believed that capacity constraints exacerbate poor customer service
levels. The inventory and order Based
Production Control System (IOBPCS), often associated with "real life"
production control system, is used as "company" building blocks for
the dynamic simulation of a supply chain.
Various combinations of capacity levels through the supply chain are
implemented at each echelon in the form of a maximum order rate that can be
placed on the production facilities.
A strategy of maintaining a record of unfilled orders (backlog) at the
production facility highlights a number of notable dynamic characteristics over
and above normal dynamics of an unconstrained IOBPCS. There is an excess inventory build up even as
production order backlog is being depleted.
This is simply dealt with by effectively re-engineering the total
business via integrating the company's overall inventory control policy with
production. The new system is used to
analyze the effect of capacity constraints within a three echelon one player
supply chain. The inclusion of a
non-linearity into the system leads to improved dynamic performance in some
designs for the step change in sales and capacity constraint levels tested, but
this does not mean improved consumer levels.
The strategy examined to improve dynamic performance is the holistic setting of
system parameters to improve the non-linear systems. The future direction for research and ideas
for further improvement are also presented, where the simulation results
indicate the need to closely monitor appropriate system variables such as
inventory levels, and to incorporate them within more robust decision rules.
System Dynamics at the pre-college level, its time has
come. English teachers have sufficient
comfort with technology. Tools such as
STELLA II and PowerSim have provided the broad-based language for communication
and understanding.
A recently awarded 3 year National Science Foundation grant, CC-STADUS
(Cross-Curricular System Thinking and Dynamics Using STELL), is training 165
high school math, science, and social studies teachers in system modeling using
STELLA II. Teachers develop some models
within their curricular areas. Then
Cross-curricular teacher teams are formed to design at least one large model
and develop curricular materials around the model so it can be used immediately
in their classes. The training is done
by high school teachers and by speakers from industry who use modeling in their
work. The teacher participants are
responsible for sharing their knowledge and expertise with other faculty and
with students in their classes.
High school students are using systems concepts at various levels. At lower levels (especially with
"at-risk" students) the teacher demonstrates how a model is designed
and students manipulate the model and predict new behavior. At the middle level, students develop a model
as a class activity under the direct guidance of the teacher. At the highest level, students select a topic
of interest, formulate boundaries, work with an information resource person,
and work with a modeling resource person to develop a model and present it to a
class.
System Dynamics wee used for the first time to improve
planning and budgeting in American higher education with a pioneering project
launched in 1990 by staff of the Arizona Board of Regents to help the state of
Arizona anticipate and prepare to meet rapidly growing enrollment demand over a
twenty-years planning horizon. Then, the
Though system dynamics was developed close to forty years ago at MIT and has
widely used industry, it is new to the higher education. This paper first briefly describes the actual
experiences of
This paper discusses the nature of generalized problems
solving and its algorithmic-like properties.
In the systems literature problem solving is usually discussed in
relation to its methodological setting - for example, SSM may legitimately be
regarded as a problem solving scheme.
This paper explores what we believe to be the five basic cognitive
elements or strategies involved in problem solving. An examination of these five strategies then
suggests a way of understanding why particular methodologies have powerful
problem solving power, and why explicit use of these five strategies within a
methodology will result in an increased problem solving potential.
Some of the ideas discussed here arose from studies into how knowledge
engineers solved the problem of knowledge elicitation and representation. These studies were illuminating since the
most common situation seemed to be that no real underlying strategy was
employed and that the activity in essence was based on the chance plus
experience. In other words when
practitioners were asked what strategy they were using the most common answer
was that they did not know but they could do it anyway. This form of knowledge is often called Tacit
Knowledge - that is the sort of knowledge where we know what to do, but
have no clear idea as to explaining how we do it.
This article presents a model in System Dynamics, for the control of the Leishmaniasis. This proposal presents the interactions among the five subsystems that intervene in the transmission dynamics of the Leishmaniasis: insect population, human population, animal population, the environment and the control strategies. The parasite, the transmission personage, is defined as the element that determines the relationship among the subsystems that determines the epidemiological cycle. The indicated subsystems are separated at different levels and its dynamics is modeled through a set of 120 different equations involving the different reported parameters in the scientific literature. The resulting model permits to simulate the transmission with and without controls and to observe the efficiency by applying of those control policies. The simulation is performed using a home made software called EVOLUTION, in two different conditions: natural conditions or without controls and with controls, obtaining quantitative and qualitative results which were considered plausible by the experts. The set conformed by the software and then model could be considered a valuable tool for epidemiology research.
This paper describes the work and experience gained by a
team of senior managers using a systems thinking approach, to develop their own
set of future scenarios, to support a realignment of strategy and the redesign
of a worldwide exploration group of a major integrated oil company. The opportunity for this experience arose
from a need to assess the diminishing returns produced during several years of
overseas exploration activity. According
to a recent article in the Wall Street Journal, the entire petroleum industry
has increased its search for reserves overseas.
“...between 1988 and 1992, the world’s 234 largest publicly traded oil
companies spent $157 billion on exploration and development overseas, 49% more
than in the U.S.”, but diminishing results.
In 1990, the industry discovered 148 barrels of oil outside the
Against this backdrop, the senior manager used a systems thinking approach to
brainstorm the factors influencing the dynamics of the world oil and gas
industry. From this process the group
was able to develop a set of five distinctly different plausible futures that
might develop. To test their group
mental model for consistency, they develop a causal model of the industry and
discovered that their five different futures all could be explained by a common
model.
To maintain the standards set forth by the American Association of Collegiate Schools of Business (AACSB), one thing a business school (B-school) must do is to maintain a certain proportion of tenured faculty members to students. The AACSB standards also affect the process of reviewing tenure track faculty members for promotion and tenure (P&T). Typically, tenure faculty members are considered more committed to enhancing the reputation of a B-school and of the AACSB through research and publications.
This paper presents a system dynamics simulation model of
the interrelationships among variables pertinent to hiring adjunct and tenure
track B-school faculty. An ad-hoc
committee of administrators, faculty and students of a relatively small
prestigious B-school met to evaluate the implication of AACSB standards and to
consider the possible implications the school’s recent expansion history might
have on these standards five years into the future.
An important concern underlying the modelling process is that having less than
fifteen students in classes is preferable to students. Smaller classes allow for more instructor-student
interaction, so the student better understands what the instructor require and
the instructor knows the student interaction, so the needs and skills. Estimates of the growth and attrition rates
of both students and faculty members affect administrative decisions on the
number of adjunct and tenure track faculty to hire. Although the time a student
spends in the B-school program varies depending on whether enrolled full-time
or part-time, the student growth history, the student growth fraction and the
student growth forecast are the variables that determine future student
enrolment.
The model confirms that the inexorable nature of P&T evaluation process
makes the often desired balanced growth in B-school faculty a physical
impossibility. Yet, the model’s computed
scenarios, which corresponding to alternative future student enrollment and
faculty growth rates, show how the proportion of tenured faculty to students
may respond differentially to alternative growth strategies. An important implication of the simulation
results would require the B-school administration to consider both ratios in
making hiring and firing decisions for the B-school to maintain the current
AACSB accreditation status.
This paper describes a system dynamics simulation model of
the interrelationship among firms competing in the entertainment industry. The model integrates ideas from strategy
design, organization design and new technology adoption to describe exactly how
the diffusion process of new hardware and software technologies into the
entertainment industry is changing the power and stability of syndication
firms, the dynamic changes in the extant production capacity of TV networks,
and the investment opportunity in basic cable network system operators.
The economic organization and regulation of TV networks broadcasting vary
substantially from country to country, but having a mixture of public private
enterprise placed under the supervision of a government agency is a common
arrangement. TV networks and affiliates
in the
A team of managers and planners from a group of syndicators met to discuss
current events and the changing structure of the entertainment industry. Changes stem from the moves of major pay
cable channels, TV networks, basic cable networks and system operators, each
responding differentially to the diffusion of new signal-transmission technologies
into their industry. A broad discussion
culminated into a system dynamics simulation model of the interrelationships
among firms competing in the entertainment market. The model produced new insights into the
power and stability of syndication firms, the dynamic changes in the extant
production capacity of TV networks, and the investment opportunities in basic
cable and networks and cable system operators.
This successful, large-scale introduction of system dynamics
into education requires many supporting elements. One important element is an institutional
structure that supports school change. A
major part of such a structure needs to be the availability of expert system dynamics
mentors to provide on-going training and support for teachers.
This support occurs on three tracks. One
track is relatively formal workshops and meetings spent cooperatively
developing projects. Another track is
classroom observation and documentation.
The third track consists of encounters by the coffee machine, and
consists of informal, brief conversations where the mentor and teachers can
brainstorm ideas or confer on a current project. These methods of on-going support are
preferable to the more conventional format of short-term intense workshops,
which research shows has little long-term effectiveness.
In this paper, the author discusses his experience a part of the System
Dynamics Project in the Catalina Foothills School District (CFSD), located in
There has recently been a revival of interest in the dynamics of the oil market, not least because its key determinants are still a matter of intense debate even though the turbulence experienced in the 1970s and the early 1980s has largely dissipated. One aspect of the discussion is how to appropriately model the market given that dominant paradigm of the 1970s - that of exhaustion of a finite resource - is no longer seen to be valid for the short time scales involved. Models that are based on the behavioral simulation approach typically use the target-capacity utilization (TCU) supply-side model in their description of events, but doubts remain as to the validity of the TCU hypothesis. In this paper we adopt a bottom up approach by modelling as closely as possible, from first principles, the strategies adopted by OPEC in their attempt to manage the world oil market. We also look afresh at the demand side of the oil market to capture the completed lag structures that characterized the response to price volatility. The complete model, constructed in Stella, is shown to reproduce accurately the hysteresis effect exhibited by the oil market in the period of interest.
Scholarly research has long identified innovations as one
important reason for internationalizing corporate business. This statement is represented analytically by
cause and effect relations at the beginning of the project. Innovations, i.e.
the underlying technologies have a crucial impact on industries and their
development over time. The dynamic
relationship between technologies and their industries will be explained on the
basis of technology and industry life cycles.
Subsequently, it is pointed out that one important precondition for generating
innovations successfully is the organizational structure by which research and
development (R&D) units are linked together. Basically, three organizational models which
are examined can be distinguished: an international network models, the process
of organizational learning on knowledge, relevant for innovations, takes place
in different ways. To generate
successful innovations, R&D personnel has to learn diligently and quickly
from both: the new technological developments and from new or diligently and
quickly from both: the new technological developments and from new or changing
market needs. Proposals could be made to
facilitate organizational learning in the field of R&D. Then, the organizational models are allocated
to the quadrants of a technology portfolio.
One axis symbolizes the attractiveness of the technology which basically
illustrates the technology life cycle.
This may offer a theoretical explanation of the need for adjusting
organizational R&D models and the organizational learning process according
to the dynamics of technologies.
Functional economic analysis is a modeling approach that provides a uniform basis for analysis and comparison of alternative investment and management practices. The approach takes into account the costs, benefits, and risks associated with new ways of doing business and managing organizations. The entire purchasing process from initial request to final delivery, payment and accounting is being re engineered at MITRE. A complete resourced process flow chart was developed for both the present and proposed systems. An "i think" system dynamics model of both the present and proposed process was developed. The model projects the seasonal workload over the proposed system lifetime. Dynamic normal, overtime, and temporary staffing requirements were calculated. The new system reduced total requisition delay by a factor of ten. This will greatly reduced expediting actions and costs. Multiple data bases and computer systems along the process were combined into a single system. This greatly reduces data entry and reconciliation effort. The new process groups purchase requisitions by type that provides the opportunity for bulk discounts. All these will result in 37 million dollars of saving over a ten year system life.
The counterintuitive associations, known as Bowman's Paradox, found between measures of financial risk and return for a large sample of companies across many industries have previously been explained in terms of the attitudes of managers to risk using prospect Theory. Similar results were obtained by the author from teams playing a system Dynamics based business game to stimulate a magazine publishing industry. Experimental results of the dynamics movements of the team companies within the financial measures of risk and return space are presented. Explanations based on organizational learning and adapting group decision making behavior provide an alternative account of the archetypal team transitions observed.
This paper deals with System Dynamics as an alternative to
methods of problem-solving that are traditionally taught in colleges. It is based on my experience of teaching the
use of the methodology for analyzing small system of finance, hydrography,
demography etc.
Testing out any hypothesis where System Dynamics is compared to another
methodology is complicated, and I do not present any conclusions. I argue further that this has to be done by a
qualitative approach.
In the field of finance quite a lot can be gained by using System
Dynamics. The given example of
calculating the net present value of a cash flow illuminates my point. In traditional textbooks this value is given
by a formula based on the assumptions that interest remains constant over a
long period of time, and that there is no or constant depletion of money value
due to inflation. In view of economic
reality this description is very native.
On the other hand, it is rather cumbersome to develop and use a formula
that takes in account variation of annual earnings, varying interest and
varying inflation. Similar observations
have been my incentive for applying System Dynamics to various sciences. Quite a lot of traditional calculations can
be greatly simplified by resorting to the methodology of system dynamics;
especially when it comes to integrating complex, realistic assumptions into the
models.
My preliminary conclusion is that System Dynamics enhance the understanding and
enables the students to go well beyond the oversimplifications of traditional
textbooks, and that the use of the methodology in various disciplines should be
advocated. It is further my belief that
teaching the subjects in undergraduate classes creates an underwood of users; a
basis from which further system analysts can be recruited.
System Dynamicists usually view simulation as a means to help them understand the counter-intuitive behaviors commonly exhibited by complex systems and to facilitate others’ learning about these behaviors. However, a second and closely-related application is typically overlooked: the elicitation of barriers to organizational learning in a non-threatening environment. In our experience, when clients are placed on teams and presented with a simulated future, the organizational defensive routines which prevent effective decision-making in the real world soon arise in the simulation setting. A skilled facilitator can then begin to address these behavior patterns in the (relatively) safe context of the simulation.
Thus, we see tremendous power in the integration of the applications of simulation technology. First, the dynamic model used to build a simulation helps both the modeler and the client understand systemic behavior – which leads to better strategic choices. Second, the addressing of organizational defensive routines promotes learning and the conversion of such choices into timely action.
DIAGNOST is a policy exercise based on a gaming/simulation
in which managers and directors of institutions for the care of the elderly in
a region of the
It is increasingly common for companies to undertake a system dynamics study with the aid of outside consultants. However, it is still uncommon for even large companies to successfully bring system dynamics into the organization as an internal competency. This paper reports on the efforts at Eastman Chemical Company to create an internal capacity in system dynamics. At this point, Eastman has successfully launched system dynamics as an organizational approach to decisions making, and the effort continues to develop rapidly. Eastman managers must yet address issues of sustainability, however the process that resulted in a successful organizational start is of interest in itself and may help other companies seeking competency in system dynamics. This paper describes the launch of system dynamics at Eastman.
Advances in all fields of medical technology have driven rapidly growing expectations of medical care over the last half century. The rate of growth of this demand for health-care had consistently exceeded GDP growth and, in many countries, the health-care bill had been absorbing an ever greater proportion of government spending. Governments throughout the world are increasing concerned that this growth is unsustainable. The pharmaceutical industry, whose products account for about 5 to 10% of the health-care spend, has based on a cycle of growing sales from ever more effective new products, fuelling a substantial re-investment in high-risk, long-term research and development, leading to further advances and new product introductions. Historically the overall sales growth has been founded on both price-related factors.
The purpose of this study was to explore the relevance of a System Dyna