A plastics producer had experienced rapid growth in production
volume and product slate. Concurrently, the percentage of
non-prime quality product was increasing. The revenue loss
amounted to several million dollars per year. Manufacturing
Management wanted to understand this trend and determine how
it could be reversed. A systems thinking modeling effort was
launched, involving all functions involved in production and
product development. Inexpensive remedies were uncovered,
involving mostly changes in internal policies. Within 6 months,
the non-prime product percentage had been reduced dramatically.
It stayed low for the subsequent years.
A polyethylene producer wanted to understand cyclical nature
of polyethylene prices, and how it could best manage its responses.
A computer simulation model showed how cycles depended on
a few key variables: feedstock costs, manufacturing capacity
utilization, and inventory building behaviour. As a result,
the client was able to plan and budget expenditures more effectively.
A pipeline company was experiencing escalating capital project
cost due to ever more onerous environmental rules and regulations
(e.g. for managing the impact of river crossings on fish habitat).
The project group wanted to understand what policies led to
the cost escalation and what mitigation practices might be
appropriate. Our model showed that the internal practices
of the company were unwittingly fueling an “environmental
technology arms race” dynamic. These insights allowed
the client to alter policies leading to a moderation of environmental
approval costs.
A consortium of pipeline companies were concerned with the
unpredictable nature of demand for expansion by their customers.
They constantly ran the risk of over expanding (causing under
utilized assets and customer dissatisfaction due to high costs)
and under expanding (causing customer dissatisfaction with
inability to get their gas to markets). A computer simulation
model and “management flight simulator” demonstrated
the highly interdependent nature of gas supply and pipeline
capacity. This was used in multi-party workshops with pipeliners
and their customers to improve mutual understanding and expansion
policies.
An energy company with a traditionally homogenous (white male)
workforce wanted to understand how to be more successful at
attracting and retaining a diverse workforce. A series of
workshops were used to map the forces that help or hinder
the increases in diversity. The factors considered were financial,
emotional and political (internal to the company). The model
became a powerful communication tool for internal change management.
In a related effort, a small computer simulation model was
created to develop more effective policies for increasing
female representation in senior technical and management roles.
The model and analysis showed that the company should shift
its efforts from hiring new female employees to retention
of existing female employees.
A chemical producer had made repeated unsuccessful attempts
to reduce its level of inventory and working capital. A formal
computer simulation model was created that captured the dynamics
at play between various parts of the company, its suppliers
and its customers. The interactive nature of the model allows
key decision makers to experiment with alternate policies.
It showed that decision makers were pressured to manage conflicting
objectives that were difficult to satisfy simultaneously.
It also uncovered deeply ingrained internal policies that
thwarted efforts to improve inventory management. However,
subtle but effective interventions were found and working
capital was reduced by $60 million. The annual benefit was
$6 million.
In the process of analyzing a chemical company’s difficulty
managing working capital levels (See Cash Flow Cycle Time
case described above), systemic issues in the company’s
culture were uncovered. These issues were seen by senior management
as a revelation, with implications for company performance
improvement. The model consisted of a set of causal loop diagrams
and speaking notes. These were used at management workshops
and presentations to help change the culture improve organizational
effectiveness.
A regulated pipeline company was faced with pending deregulation.
Their concern was how their earnings might be impacted if
their transportation capacity were to become a volatile commodity.
They wanted to understand what policies cause or avert disastrous
earnings cycles. A systems dynamics model was developed with
assistance of MIT students. It identified simple but not obvious
remedies to avert boom/bust cycles in pricing.
Since 1994, Calgary had been experiencing rapid growth in
homelessness. A non-profit organization wanted to develop
a better understanding of the causes of homelessness so as
to generate effective solutions. The current solution of ever
expanding services was seen as temporary and unsustainable.
A multi-stakeholder task force was struck which mapped and
modeled the issues. A formal model was developed and made
publicly available. This model has been used in a large number
of workshops with agencies and government officials to develop
deeper understanding. The model is constantly being updated
to reflect new insights. Significant research efforts have
been launched to provide additional data. The simulation identified
the need to shift public policy. It also identified areas
where research was needed.
A number of large employers have workforces heavily dominated
by baby boomers. They wished to understand the transition
they face when this cohort retires, and to identify the most
effective policies to avert negative consequences for their
organizations. A set of systems dynamics tools were developed
to model the demographic changes in a company and to conduct
analyses of employee retention, attraction and development
strategies. The software is used commercially in a number
of client organizations.
* The level of modeling is indicated in (brackets) following
the project title
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©
2002 CCS Incite Inc.