western research application center (wesrac) ken dozier & david chang western research...

Western Research Application Center (WESRAC)

Ken Dozier & David ChangWestern Research Application Center

World Society and Engineering Academy and Society Conference

February 25, 2012 Harvard, Cambridge

USA

Improvement of Supply Chain Efficiency with a Learning Game


Bio – DavidSemiotics Syntactics: Plasma Physics

* Stamper, Information, Norms and Systems (1996)


Introduction

• Used a Design Research Framework to create a Learning Object Game Immersed in Complex Systems (LOGICS) process and product artifact.

• Used the NetLogo “Hubnet” capability to immerse a human agents into the simulate the dynamics of the classic Sterman “Beer Game”.

• Create a persuasive experience that nudged players abandon heuristics and invest in IT rationality to improve economic performance in a counter intuitive dynamic business system.


2. Background

• Observations– Cyclic phenomena in complex dynamic business systems

• Ubiquitous & Disruptive• Example: Wild oscillations in supply chain inventories

• Results of Observations and Simulations– Negative Feedback Systems with Delays Oscillate– Phase dependence of oscillations on position in chain– Understanding of Managements Personality Impact – Commitment to Rationality Dramatically Increases Financial

Performance• MIT Sterman “Beer Game” Simulation

– Single Customer, Single Product, 4 Tier Supply Chain– Published Suboptimal Performance 1 Order of Magnitude – Experimental Suboptimal Performance 2 Orders of Magnitude


Model Developed by Dr. Nathan B. Forrester of A.T. Kearney, Atlanta, 2000

23rd Order Differential Equation

2.1 Beer Game


2.1.1 Sterman Single Repetition

Teaching Takes Off: Flight Simulators for Management Education, Sterman (1992)


2.1.2NetLogo Demonstration

Steady state at 4 cases per order.

Beer Game Demo Densmore, O. June 2004

Wilensky, U. (1999). NetLogo. http://ccl.northwestern.edu/netlogo. Center for Connected Learning and Computer-Based Modeling. Northwestern University, Evanston, IL


2.1.3A Single Change

A 4 Unit Constant Demand is Changed to an 8 Unit Constant Demand

Wilensky, U. (1999). NetLogo. http://ccl.northwestern.edu/netlogo. Center for Connected Learning and Computer-Based Modeling. Northwestern University, Evanston, IL

Beer Game Demo Densmore, O. June 2004


2.2 Analytical Models

Efficiency

Direction

Proficiency

Competition

Concentration Innovation

Cooperation

Source: “The Effective Organization: Forces and Form”,Sloan Management Review, Henry Mintzberg, McGill University 1991


2.2.1 Conflicting Temporal Layers

Source: Gus Koehler, University of Southern California Department of Policy and Planning, 2002


2.2.2 Layers of Communication



2.2.3 Government Dynamics



2.2.4 High Level of Complexity



2.2.5 Bureaucratic Factor

Seven Organizational Change Propositions Framework, “Framing the Domains of IT Management” Zmud 2002

Business Process Improvement

Business Process Redesign

Business Model Refinement

Business Model Redefinition

Supply-chain Discovery

Supply-chain Expansion

Market Redefinition

High β

Low β


2.2.6 Plasma Theories

• Advanced plasma theories are extremely important when one tries to explain the various waves and instabilities found in the plasma environment. Since plasma consist of a very large number of interacting particles, in order to provide a macroscopic description of plasma phenomena it is appropriate to adopt a statistical approach. This leads to a great reduction in the amount of information to be handled. In the kinetic theory it is necessary to know only the distribution function for the system of particles.

Source: University of Oulu, FInland


2.2.7 JITTA• Investigated the β bureaucratic factor and it’s inverse

organizational temperature T (dispersion) in the 5 metropolitan service areas surrounding Los Angeles.

• Investigated the ability of Stratification to Differentiate impact of IT Investment on output and job creation– Large firms invest in IT to increase output and eliminate jobs– Small firms invest in IT to increase output and expand workforce

• Investigate Partition Function Z, Cumulative Distribution Function opened the linkage to Statistical Physics– Dozier-Chang (06) Journal of Information Technology Theory and

Application

• Math Intensive Solution Ideal for Cloud Architectures – Marginal Cost on a per transaction basis– “Give them a Browser Razor Sale them Transaction Blades”– Accommodates Both Large and Small Firms


Comparison of U.S. economic census cumulative number of companies vs shipments/company (blue diamond points) in LACMSA in 1992 and the statistical physics cumulative distribution curve (square pink points) with β = 0.167 per $106

2.2.8Maxwell-Boltzmann Distribution

0

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3500

4000

0 10 20 30 40 50 60


2.2.9 Advantages

• This model does allow examination of the optimal timing for interventions of these propagations and parametric forces. Something not possible in simulation models to date

• The most effective paramedic interventions will be those that use information technologies to harmonize with naturally occurring normal modes of the system.

• Disturbances from non optimal interventions move up and down the supply chain.


3. Learning Object Game

Takeda, Veerkamp, Tomiyama, Yoshikawa (AI)

Purao (IS&T)

Dasgupta (IS&T)

Vaishnavi & Kuechler, Design Science Research Methods and Patterns (2008)

Design Science Framework


3.1 Kernel Theories


3.2 Integrated Development Environment

LOGICS

Behavior Space Generator

Participatory ABMS Analysis Space


3.3 Player Interface


3.4 Instructors Console


3.5 Results


3.6 Design1 versus Design5

Design1 Normally Distributed Design5 Highly Skewed


4. Discussion

Trial Player 1 Player 2 Player 3

1 4356 15588 6243

2 4362 4289 16650

3 3393 8156 5840

4 179.3 1563 1491

5 179.3 2885 1876

IT Orders 87% 21% 55%

Design 5

Modest Sample Size


4.1 Binomial Distribution

• Results can be interpreted in a self consistent manner since each trial can be considered independent.

• A “success” occurs when the total cost is less that some target

• Binomial Distribution is Appropriate for a Modest Sample Size

• There is a 7 fold improvement in target teaching costs in only five trials

• This is a dramatic improvement in past experience with reinforced learning for the Beer Game problem

0

1000

2000

3000

4000

5000

6000

0 1 2 3 4 5 6

Trial number

Tota

l cos

t

Teaching Target Costs from Box Plots N=3 p=1/7


4.2 Someone is Getting Rich on the Waste


4.3 Findings and Video Demos

• Game 1: Manual ordering with repetition. My control group average 10 times larger than Sterman.

• Game 2: Manual ordering using Senge’s “Do nothing strategy” Retail absorbs the bulk of the costs

• Game 3: Local computing enables Wal-Mart's to kill supplier factories• Game 4: Any technical solution is better than intuition• Game 5: If we cooperate we make 100 times more money. • The Optimal to Average performance ration of 100 to 1

• Much room for improvement• Asynchronous interaction between tiers. • Realistic demand time series• Realistic normal modes and associated optimal values• Larger number of participants• World side distribution on the Cloud


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Documents

beer game slide

learning game slide

il slide

design research framework

orders of magnitude

northwestern university

classic sterman beer

learning object game