Statistical thinking is a well-established approach that involves the application of the scientific method to solving real-world organizational problems. The premise behind statistical thinking is that a disciplined approach to gathering facts can be used to identify the root causes that act as a barrier to successful performance. Once these root causes are identified, corrective action can be planned, and implemented, in order to change the underlying system. At a practical level, the Six Sigma methodology is the most widely known statistical thinking approach. Its structure involves a multi-stage methodology that starts at problem definition, and ends at implementation and consolidation of change. Throughout the stages of Six Sigma a number of practical tools both qualitative and quantitative are used to help formulate the problem, create a shared understanding of the problem amongst the different stakeholders, and identify policy levers that can improve system performance. This paper highlights the main parallels and differences between statistical and systems thinking, and illustrates how a number of tools from statistical thinking can also be used throughout a systems thinking consulting intervention. The paper concludes with a case study.
Risk is an inherent part of healthcare, particularly in large referral centers, where some of the most complex cases are managed. While risk cannot be eliminated from the clinical activities, it is believed that some practices involving unnecessary risk can be mitigated without impacting overall performance. Our ability to identify these vulnerable practices, and develop durable preventative or mitigating strategies, however, is hampered by outdated models of risk and an inadequate approach to the analysis of risk. In an effort to develop more realistic models of risk in complex healthcare settings, we applied a system dynamics framework to model how features of the environment (e.g., time pressures, resource shortages, etc.) and human attributes (e.g., risk tolerance, confidence in existing safety policies, etc.) combine to influence safety. The models have enabled us to study, through simulation, the complex interactions between production pressures, historical experience with adverse outcomes, inherent risk tolerance/propensity, confidence in and compliance with safety controls. We present here the modeling strategy and the results of a series of simulation experiments studying these phenomena.
This paper examines the effect of competition on internal resources on income volatility of multi-product companies. Therefore the two-shower model of Morecroft et al is tested and analyzed in symmetric and asymmetric situations. After discussing the opportunities and limits of the shower models translation into a company context, a stylized company model is presented and analyzed. As was expected, the stylized model preserves the shower models dynamic behaviour in principal. Optimization of the policy parameters, however, turns out to be sensitive to the objective function. Minimizing the gap of desired income and maximizing total cumulated income produces different outcomes, which is explained by an incomplete cost sector and can easily be avoided. Finally, by changing the equilibrium model into a growth model, it can be shown, that the amplitude of oscillations will increase, making it more difficult for decision makers to allocate internal resources in the most effective way.
This paper presents the first phase of a work in progress which aims at building a System Dynamics model around two theories concerning internal conflict. In particular the model will asses the particular case of Colombia. The different theories around the economics and causes of war can be separated in two trends. The first one argues that wars are economically motivated, and the real objective of armed groups is the quest for money; this theory is characterized under the term greed. On the other side, there are the social, political and historical factors that allow and facilitate the emergence of armed groups (grievances). This investigation aims to develop a better understanding of the complex interactions around the Colombian conflict, considering both theories and seeks to build a better comprehension of this conflict in order to study how to generate development during an internal conflict.
The study represents an exploration of the Italian energy situation, which is characterised by huge energy imports, strong dependence on fossil fuels, and carbon emissions well above the Kyoto target. Certainly, in such a situation, given the nuclear energy ban of the Italian 1987 referendum, renewable energy could help the country. Nonetheless, its high costs could be an obstacle that strongly limits its expansion. One of the main results of the analysis performed with the IRED (Italys Renewable Energy Development) model is that an increase of the renewables share up to 20% in 2020 represents a striking change in the structure of the Italian electricity system, which, under certain conditions, is not feasible. Italy faces a sort of triangular challenge, involving fossil fuel prices, renewables production costs, and carbon prices. The trends in these variables will decide the destiny of renewables in the country.
The role of Intellectual Property Management in facilitating the agricultural transformation process in developing countries is unknown and discussed in a very controversial way. This paper conceptualises a framework for assessing the impact of Intellectual Property Management on the seed sector in West Africa. At the core of such assessment is a system dynamics model that describes the dynamics of a seed value chain. We use data from interviews with multinational seed companies, research institutions and private sector actors in Ghana for developing a conceptual simulation model and for specifying the impact assessment framework. Different scenarios are to be established to test a variety of Intellectual Property policies. The interviews we conducted suggest that there is local demand for such an overview analysis and the discussions we had about our approach indicated an immediate contribution to the understanding of the entire seed system.
This paper presents a case study of an analysis of a Corrective Maintenance process to realize performance improvement. The Corrective Maintenance process is supported by SAP, which has indicated the performance realisation problem. System Dynamics is used in a Group Model Building process to structure the problem and to develop a dynamic business model with which the process is analysed. This is performed by the evaluation of changes in external factors and interventions in the process on performance indicators compared to a reference run. The case study has shown that modelling this maintenance performance problem is possible with System Dynamics, but the method is more suitable on an aggregated level. Although the results of this simulation study are significant, one of the conclusions is to not automatically assume that System Dynamics is suitable for problems that are structured with Group Model Building. It is recommended to select another modelling method after the problem is structured, if that method is more suitable.
Studies have been conducted to measure competitiveness in the construction industry. Such research has focused on all levels from the national picture to individual projects. While useful, the results are limited in that they present a snapshot picture at one point in time. Moreover, they do not suggest how under-performance might be improved. The research reported here is part of a large collaborative study to evaluate sustained competitiveness in the UK construction industry. It enhances previous research in that a system dynamics model of contracting firms operating in competition is used to not only measure each firm's temporal performance by means of a dynamic competitive index, but it can also suggest high leverage policies which mitigate against under-performance. The model structure is described and simulated scenario runs presented. Besides the contribution to strategic policy making at the level of the contracting firm, the exemplar shows that the system dynamics methodology could have significant utility in the field of construction management.
This paper presents a framework for modeling technology policy for Abu Dhabi, an entity of the United Arab Emirates (UAE). Abu Dhabis general objectives are to maintain a level of economic and sustainable development and to increase skill formation and capacity building. The immediate dilemma is to meet future energy demand for electricity and water desalination but at the same time reduce C02 emission. This paper presents a modular approach using system dynamics to determine the best technology strategy policies to meet these objectives.
The governance is a system composed by a great number of interdependent entities, with different degrees of relationship. This article considers the governance of a social-economic and political environment under a pension funds perspective as a complex system in which the interactions among the actors influence the governance and the governance can influence their interactions, in a recursive way. In order to cope with the peculiarities of complex systems, a system dynamics (SD) model, combined with an agent-based model is proposed to analyze population dynamics and the influence of credibility as a subjective factor over the expected adhesion of new participants. The behavior of the agents is modeled using fuzzy logic. This way, the article aims to evidence the power of a multi-paradigm model to study complex environments and to offer a way to address a dynamic ALM problem in order to manage solvency and liquidity risks in pension funds.