Volume 21 – Number 4 October 2008
Synopsis: Dynamic Performance Measurement and Evaluation: Will Bridging Paradigms Lead to Improved System Design, by Kostas Triantis, Warren Vaneman, and Kalian Pasupathy
Innovation Diffusion in the Building Construction Industry: Empirically Based Theory Generation, by Stefan Groesser & Silvia Ulli-Beer
Citizens’ Choice: Modelling Long Term Technology Transition in the Automobile Industry, by Silvia Ulli-Beer, Mathias Bosshardt, Fritz Gassmann, and Alexander Wokaun
Change happens over time: how do we cope? Kostas helps us define, measure and understand dynamic productive performance. Stefan shows us how innovation diffusion theory can be applied to the uptake of energy efficient building products. Silvia models the long term technology transition in the auto industry to map a way to low CO2 emissions. Dolores moderated.
(Full Report )
Synopsis: The session “Pedagogy Research, Interactive Learning Environments” was chaired by James Lyneis and included three papers on the use of system dynamics for learning.
Mert Nuhoglu and Hasret Nuhoglu performed an experiment with Turkish middle school students in their science and technology course. The experiment involved both a system dynamics and a standard syllabus approach. The experimental findings are mixed, with system dynamics improving only some of the analyzed skills.
Agata Sawicka and Birgit Kopainsky explored the effectiveness of simulation-enhanced descriptions of dynamic problems. In their paper they demonstrate that misperceptions of dynamics can be reduced significantly when textual task descriptions are complemented with elements facilitating an interactive exploration of dynamic features of a problem.
Diana Fisher analyzed how second year algebra students in the United States performed in an algebra task of building and analyzing growth relationships. She found that students using STELLA outperformed students using a graphing calculator. This emphasizes the need for students to have access to system dynamics simulation software and for teachers to have access to computer labs.
Altogether the papers suggest that system dynamics can effectively facilitate learning about dynamic problems. They also emphasize that learning about dynamic problems takes a long time.
Synopsis: The paper A New System Dynamics Model for the Analysis of the Paper Digitization Process in the Italian Public Administration described mainly the characteristics of the transition period from paper to an all-digital society with its areas of interest (cost, documents and the users) and the factors that can forestall public policy. The analysis’s main points, which are also the dynamic hypothesis of the paper, are the spread of the “new technology” and its imminent problem, the archives’ dimensions. The paper in A Feedback Theory of Trust and Confidence in Government showed that there is a close interaction between trust and confidence, although the distinction between them is very clear. In addition, the public’s trust and confidence in the government’s body are used for the greater understanding of the perception-formation process, the cause-and-effect illustration (feedback loops) on public policy issues, and their influence at conditions of uncertainty. The paper in The Field for Interactive Learning on the Climate-Energy Transition (FILCET), supported by a systemic model, focuses on the dynamic complexity of CO2 emissions. FILCET aims to give knowledge, interaction, and awareness in energy issues to energy users, educators, policy makers, and energy innovation networks. Overall, all three presentations revealed how the public policy process dynamically interrelated with diverse factors and issues despite the fact that it itself has a dynamic modus operandi.
In this session of methods and modeling, presenters showed that system dynamics is a good methodology to analyze problems in different fields of knowledge. The development of system dynamics has resulted in basic theories and models that can adapt perfectly to the analysis of other fields, thus facilitating the understanding and validation of models in many disciplines.
Three papers were presented, the first showing a comparison between system dynamics and modeling by discrete events, based on an experiment by expert modelers in each of these modalities. The other two papers presented the analysis of different frames but were based in existing models of dynamic systems, the first for the allocation of the budget in different products in a company, and the second in the implementation of ICT within a company. Following are the main aspects of each presentation.
Model Building in System Dynamics and Discrete-event Simulation: A Quantitative Comparison, by Antuela A. Tako and Stewart Robinson, was presented by Antuela Tako. During the presentation, the researchers showed the main conclusions from observations in behavior of the process followed by five expert modelers in system dynamics and five expert modelers in discrete-event simulation. The main conclusion was that system dynamics has a process based more in conceptual modeling and less in model coding, while discrete-event simulation has a process centered in model coding more than in conceptual modeling. See figure 1 below.
All modelers had the same data and simulated the same problem. The method for collecting the opinions of modelers was oral. These opinions were the basis for the results presented in the paper.
FIGURE 1. Average percentage of attention paid to the seven modeling topics by discrete-event simulation and system dynamics modelers and mean +/-2 SE.
An attendee made an important comment on the research - that there is no adequate comparison between system dynamics and discrete events; in fact, when system dynamics simulations of discrete events can be carried out.
The second paper was A Multi-methodology Approach to Addressing ICT Skill Shortages in a Government Organization: Integration of System Dynamics Models, by Alan McLucas. Ed Lewis presented this paper and discussed the difficulties of some people in business in adapting to changes in information and communication technologies, especially because they need to develop skills to use these technologies. Thus an analysis of feedbacks in ICT implementation and use is important in order to succeed in these processes and reduce the impact of resistance to change and associated costs. System dynamics thus becomes a great tool that gives clarity and permits the adoption of best strategies.
A third paper that was presented in the session, Reducing Income Volatility in Multi-product Companies through Better Resource Sharing Policies, by Marcel Dick and Jürgen Strohhecker, shows an interesting analysis that compares the dynamics of cyclical income present in the traditional model of the bathtub in a metaphorical way with demand for resources in a multi-product company. The analysis uses a second-order model as a simulation that shows the most effective way to allocate those resources so that the return or profit compared with the allocation of resources is best. The figure illustrates reducing the gap between results for allocating resources adequately for two different products.
FIGURE 2. Actual income in an asymmetric situation
Synopsis: The session “Miscellaneous Applications of System Dynamics” covered three diverse topics. First, Mosekilde presented Biomedical Applications of System Dynamics, in which he described a model first built in the mid-eighties and since expanded upon that explains the nonlinearities associated with soluble insulin absorption in the blood. He further described how his model was initially met with disbelief, but how systems biology is now a rapidly growing field. Next, Stave discussed her presentation, Zero Waste by 2030: A System Dynamics Simulation Tool for Stakeholder Involvement in Los Angeles’ Solid Waste Planning. Here, she described the model she created for a one-day workshop of L.A. citizens. Similar to the beer game, Stave’s model invited the users to understand key variables, challenges, and outcomes surrounding the city’s goal of diverting 100% of its waste from landfills by 2030. Finally, Maani’s presentation, Resolving Performance Measure Conflicts in a Supply Chain using Systems Thinking Methodology, explained the process of evoking nonlinear thinking amongst manufacturers and managers at a multinational company. Though seemingly unrelated in subject matter, all three presentations demonstrated how system dynamics can be utilized to simultaneously educate while investigating and, thereby, broadening horizons.
The Military Roundtable consisted of a small but select group of highly motivated participants. Each individual spent five to ten minutes describing the work he or she has been doing in the military/defense area. The following is a synopsis of their presentations, in alphabetical order.
Bent Erik Bakken, of the Norwegian Military Academy, shown in the photograph, chaired the roundtable. He hastwenty-five years’ experience in defense-related activities. He worked previously in system dynamics at MIT for six years. The crux of his present effort in the defense area is in understanding “intuition.” The military is not doing it quite right. There is too much technical training, and not enough emphasis on human factors - for example, the factors driving conflict. Bent also supervises students’ master's theses.
Alan K. Graham, of PA Consulting Group, Cambridge, Massachusetts, conducts policy studies of various kinds, centered on counter-insurgency strategies. His firm has built system dynamics models for applications in Iraq, Indonesia and Africa. In relation to their work, Alan noted the connection between kinetic and non-kinetic activities. Winning hearts and minds is key to counter-insurgency. The US military knows well how to deal successfully with insurgencies. However, we don’t know much yet about the knowledge-diffusion problem, and it could use more government-sponsored research.
Eva Jenson, of the National Defense College, Stockholm, Norway, conducts research on how to use system dynamics, combining her background in engineering and psychology. Her research “is not very military yet,” as “there is not very much to build upon” as of yet. Her research was described in more detail in the plenary session on the subject “Accumulation and Control in Systems”, in her talk on Does System Dynamics or Control Theory Help you to Strike a Balance?
Keith Linard, of Ankie Consulting Pty Ltd., Victoria, Australia, has lectured on system dynamics and built interactive models of force element groups (including submarines and aircraft) and war games. The model was very topical, as it helped to elucidate the causes of a tragic accident that resulted in multiple serviceman casualties. Their modeling was kinetic and had Monte Carlo simulation capabilities. Keith left the university four years ago, and is now “amusing [himself] with consulting.” His experience has been that model-building leads a client to a “a-ha moment.”
Alexander N. Rossolimo, of the Center for Security and Social Progress, Newton, Massachusetts, described his organization’s pioneering work in global security, including a proposal for a partnership of high tech and defense firms to build a management and control system for Russia’s “loose nukes” following the collapse of the Soviet Union; a warning of nuclear blackmail by a bankrupt North Korea during the Clinton administration; a proposal for a “new Manhattan Project” against nuclear proliferation and terrorism; and a prediction of a “new Pearl Harbor” by terrorists three years before 9-11.
Synopsis: The papers presented in this session gave a number of examples of how system dynamics was being applied to help transform mental health services, making them more responsive to patient needs as well as achieving better performance overall. A key theme of all three papers was developing and using a ‘whole system’ view of the mental health services under consideration, as well as the transformational task for improvement. This is particularly challenging in mental health services, where, taken as a whole, such services can be both organisationally complex and geographically dispersed; developing appropriate mental models for clinicians, managers and others was a key goal. Moreover, given that often long-term care was needed, matching provision with need over long periods of time was an important dimension, as was the need to engage a wide range of stakeholders: service users and their families, the workforce, the public sector, the private sector and not-for-profit organisations at national, regional, and local levels. There was strong resonance in the views among those involved in the session,who identified similar themes, issues, problems, and lessons, though inevitably the amount of discussion following each paper was constrained by time.
The first paper by Eric Wolstenholme, Douglas McKelvie, and colleagues was Emerging Opportunities for System Dynamics in UK Health and Social Care . The authors presented two issues which promise to be fruitful areas of work for system dynamics modeling in health care: service-line reporting and health needs analysis.
Peter Hovmand, from Washington University in St. Louis, presented a paper which highlighted the interchange between science and policy practice made possible in a number of related projects focusing on the mental health service. These projects included both a scientific and a practical focus which together allowed the researchers to create considerable interest for use of system dynamics in the mental health community.
Hyunjung Kim, from the University at Albany, gave a presentation reporting on a project studying a community mental health care programme aimed at individuals with difficulties living unsupervised in the community. She found that there were important differences in the perceived system boundary on the state and the local implementation level, which can lead to a fundamentally different assessment of the performance of the programme.
This presentation focuses on one of the most important issues of supply chain management, the Bullwhip Effect. Unlike other research in the literature, the authors attempt to discuss in this work the interaction between causes of the Bullwhip Effect by using qualitative system dynamics. Their purpose is to explore how qualitative system dynamics can help managers’ understandings of the Bullwhip Effect in inventory management. To achieve this objective, they build a generic or archetypal map showing some of the most important factors that influence the variance of orders, a critical element in any Bullwhip Effect model. In this map, they highlight two distinct behavioural factors: judgmental changes to the forecast and judgmental changes to the order that have never been shown in much of the academic forecasting literature but are important in practice. Their further issue that requires resolution is how the maps related to judgment should be constructed. That is why then they present some current avenues of research and the findings from which including refinement of the generic model, development of archetype models, a case-study on the development of cognitive maps, etc.
John Boylan starts the presentation by talking about the model of their paper and pays much attention to explaining the structure of the archetypal map. He mostly focuses on the important role of the forecasting and the two distinct behavioural factors: judgmental changes to the forecast and judgmental changes to the orders. According to him, it is important to distinguish these two factors in order to study the interaction between them in inventory management. Then, he presents some factors taken into account to develop the archetype model, such as type of operations, stages of product life cycle, product strategy, integration, and a case-study on the development of cognitive maps to customize an archetypal model to the requirement of a specific supply chain.
In discussion time, Aris Syntetos, John Boylan, and the participants discussed mainly the causes of the Bullwhip Effect, the role of the forecasting factor, the structure of their model, and some suggestions for their further research.
Thi Le Hoa Vo
Synopsis: The Tuesday afternoon plenary session provided an in-depth view on current issues of understanding and controlling complex systems. It was chaired by Peter Milling and consisted of three excellent papers: Why Don’t Well-Educated Adults Understand Accumulation?, by Cronin, Gonzalez, and Sterman (presenter); Does System Dynamics or Control Theory Help You to Strike a Balance? by Jensen; and Regulatory Impact Assessment for the Transportation Sector, by Walther (presenter), Meyer, Spengler, and Wansart. The first presentation demonstrated that even well-educated and intelligent individuals make systematic errors when it comes to understanding the effects of stock and flow structures (“stock-flow failure”). The second presentation described an experiment in which participants had to control a simple predator/prey model and two groups of subjects were differentiated: some with system dynamics background and some with a typical social sciences background. In contrast to the other two papers, which are more academic from the outset, the third presentation was about an application of system dynamics in a business setting, namely the evaluation of different legal measures on CO2 reduction and the related economic consequences in the automotive industry.
This session consisted of a set of three related papers regarding the dynamics of changes in energy use. Unfortunately only the first paper in this session was presented because the authors of the others were not able to attend the conference.
Margarita Mediavilla presented From Fossil Fuels to Renewable Rnergies. The paper described work done at the University of Valladolid, Spain. The authors created a simple model of an ideal society to examine questions of making a transition from fossil fuels to renewable energy. The model includes basic dynamics of material capital, material growth, energy demand, energy investment, and growth in renewable energy. The results of tests with multiple parameters showed that the rate of investment in renewable energy is key in determining the success of the outcome. Slow investment in renewable energy leads to collapse, while a faster response leads to stability. In addition, the model showed that renewable technologies must have high returns on investment to produce stable scenarios. As the author explained, this model is a starting point for developing more complex models.
The audience had a number of suggestions for expanding the model, such as considering energy efficiency or conservation, steep learning curves for new technologies, and considering the difference in investment ratios in different technologies. Some suggested that the authors should examine literature on work that was done on energy transitions thirty years ago by the World Energy Forum. In addition, some felt that, while simple models can be very useful, it is important to be clear about the audience for the models.
Synopsis: The session included 3 papers, which provided useful insights about different methodological aspects of system dynamics modelling: Modeling as Theory Building, presented by Stefan Groesser; Explaining women’s careers at a Dutch university: Model Building as a Method for Knowledge Elicitation in Gender Analysis, presented by Inge Bleijenbergh; andVery Large System Dynamics Models – Lessons Learned, presented by Jacob J. Jacobson and Leonard Mayczynski.
The first paper discussed how system dynamics can be used for theory building. Stefan Groesser presented a specific case study, where a system dynamics model of the management of product launches was developed. Simultaneously, Stefan evaluated the theory developed from the system dynamics model and concluded that in the specific case a middle-range theory was developed. The goal was to promote the use of system dynamics in theory building.
The second paper presented a practical study on the careers of women academics in Netherlands. Inge Bleijenbergh presented a qualitative system dynamics model on the role of organizational culture and gender stereotyping. The model was developed in three modelling sessions involving the five researchers/authors and provided useful insights in understanding the lower numbers of women in higher academic positions.
The third paper was presented by Jacob J. Jacobson and Leonard Mayczynski. The presenters shared useful lessons learned from developing large system dynamics models. The lessons conveyed were presented under the headings project management, modelling process, managing complexities, validation, and results. The presenters called modellers to be aware of two main questions that determine the success of a simulation study. These are, "Does the model generate insights?" and "Is the application used after the model is developed?"
The session was attended by approximately twenty to thirty delegates.
Antuela A. Tako
Synopsis: The session addressed issues of social welfare on different levels and in different contexts. Two presentations were focused on developing countries. The first addressed problems related to micro-credits asking for successful strategies for micro-finance institutions, the second focused on problems of armed conflicts in resource-poor countries (Colombia), and the third addressed a problem observed in the social welfare system of a large city (New York). The session demonstrated the potential of system dynamics to conceptualize problems of social welfare, to suggest operational conclusions, and to test the influence of different factors and strands of arguments. However, it also showed the difficulty of capturing complex social phenomena in a precise system dynamics language.
Synopsis: A diverse range of military application papers were presented. The first was on the development of military software and the effect of reworking the project timeline, an important conclusion of this research being that resources for the project should be front loaded as opposed to the less effective strategy of adding additional resources at the end of the project to meet deadlines. The second paper discussed an analysis of crowd control with the use of non-lethal weapons. Aggressiveness levels in the crowd were considered to be driven by a minority of instigators and the effectiveness of a combination of tactics was assessed as an integer optimisation problem within the Phoenix Integration suite, the method being based upon a Darwin genetic algorithm. The parameters in the model were determined from actual data using the Vensim calibration tool. The third paper looked at combating atrophy rates of personnel within the Canadian Air Force, the model including such factors as work overload, imbalance between work and family life, and delays in training and promotions. Discussion of the utility of the model centred on its adoption by senior management and has been detailed in this report.
James Rhys Kearney
Paper Title: Modelling the Demand for Renal Replacement Therapies: Challenging Assumptions and Influencing Policy
Synopsis: The paper describes two case studies which used dynamic modeling to challenge assumptions about the implications of rising demand of renal replacement therapy and to influence policies designed to respond to it. The key impact of this work was to show that the future demand is as much determined by provider polices as they are by population and disease characteristics. Not all the problems are caused by rising demand and shortage of resources. In these two cases historical investment patterns and clinical practices are key drivers of current problems.
Paper Title: Modeling the Dynamics of Immunization Healthcare Systems: The Ugandan Case Study
Synopsis: The paper applies system dynamics modeling to better understand immunization health care problems and to generate insights that may increase the immunization coverage effectiveness. A causal loop diagram representing the immunization system is presented out of which a model is designed with the intent to show how particular variables influence immunization demand and coverage. The paper builds on earlier papers by the same authors. Model analysis demonstrates the need to upgrade the health system in proportion to the growing population, and how this can lead to improved immunization coverage rates. ed from the field studies were presented to various stakeholders for their comments and feedback from which a final causal loop diagram was developed.
Paper Title: Women with HIV/AIDS in Malawi: The Impact of Anti-retroviral Therapy on Economic Welfare.
Synopsis: The paper provides a preliminary, in-depth qualitative analysis of the plausible feedback mechanisms contributing to the high HIV/AIDS rate amongst young Malawian women by examining the relationship between HIV/AIDS infections, HIV risk categories, economic welfare (and productivity), and the potential impact of increased access to antiretroviral therapy (ART). For each model structure, the formulation processes involved were reviewed. The authors hypothesize that ART is fundamental to increasing economic welfare of young, HIV-infected women in Malawi and show that the models do provide useful information and feedback for future discussion on social policy and problem-solving.
Ahmad T Azar
Synopsis: The first presentation was Modeling Access to Information and Communication Technology (ICT) for Assessing a Penetration Policy, by Sandra Lopez, Ana María Cardenas, Isaac Dyner, and Erik Larsen, and was presented by Sandra Lopez. The second presentation was Assessing The Level Of Unity And Integration In Malaysia Using The System Dynamics Simulation Model, presented by Yin Yap.
Synopsis: The session was attended by approximately twenty-five participants and chaired by George Papachristos. The main theme of the session was diffusion dynamics. In the first presentation, the diffusion was related to the diffusion of products, in the second presentation to organisational change, and in the third presentation to the adoption of smart electricity meters. The first paper discussed a generic model for studying development of network marketing organizations, such as Amway. The presentation was delivered by Joan Cruz. The authors of the second paper developed a simulator for an oil company in which different stages of organisational change were modelled. The paper was presented by Felicjan Rydzak. The final paper, which was presented by Lianjun An, used a combination of methods in order to assist a utility company in developing a plan for the deployment of smart electricity meters. The full session report includes a summary of the presentations and the discussions and photographs of the presenters.
Els van Daalen
Synopsis: The first presentation focused on applying two methods of formal output analysis, fractional factorial design and Latin hypercube sampling, to a previously developed model. The purpose of the analysis was to compare the two designs and determine which offered the more complete/productive parameter sensitivity analysis so that better policy recommendations could be made.
The second presentation involved the development of a scuba diving simulator to test the effect of time pressure (game speed), material and/or information delays, and prior subject experience on performance. The task was to keep a simulated diver at a pre-specified 10-meter depth. The results of the experiment were analyzed using both a Latin Square analysis and a Repeated Measures analysis.
The third paper addressed the difficulty encountered by the excessive number of runs needed to analyze the output of medium size system dynamics models, due to the uncertainty of the parameter influence in producing model behavior. The paper explained an attempt to explore the use of MATLAB and Simulink to try to provide an automated method of identifying which part of the model (World 3) produced which part of the output of the model.
The System Dynamics Newsletteris published four times a year by the System Dynamics Society.