Structural Transparency of a

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1 Structural Transparency of a Factory Simulation Model Oleg Pavlov, WPI Khalid Saeed, WPI Larry Robinson, Cornell University Webinar at Department of International Finance, Financial University, Moscow, Russia. February 10, Available online: 1

International Finance, Financial University, Moscow, Russia. February 10, 2014.

2 Littlefield Simulation Part of an Executive MBA course at Cornell University on Operations Management Played by students over 5 days Students are professionals, average age about 35 Commercial online simulation of a small factory Learning objectives: managing inventory, inprocess queues This team project is worth 12% of the grade Deliverables: participation in the simulation, written report 2 Cornell University

simulation of a small factory Learning objectives: managing inventory, inprocess queues This team

3 Littlefield Simulation Job orders 3 stations 4 steps Machines Raw materials Lead time 3 types of contracts 3 Cornell University

4 What does this project do? Original simulation (Littlefield Technologies) is a black box Purpose of this project is to create a debriefing protocol for a business simulation Use simulation of a simulation approach System Dynamics methodology is used to create a simulation of a simulation We add structural transparency to a black box The model, the causal loop diagrams, stock and flow diagrams as well as documentation of structural equations can also be used for prior exploration 4 Cornell University

a business simulation Use simulation of a simulation approach System Dynamics methodology is used to create a simulation of a

5 Why debriefing? Historically 3 uses of debriefing: military, psychological experiments, education The size and the use of debriefing can vary Talking in groups A journal A written report Our debriefing is an instructional enhancement Debriefing improves learning Learning vs. performance in the simulation Helps the adoption of simulation-based instruction 5 Cornell University

the use of debriefing can vary Talking in groups A journal A written report Our debriefing is

6 System dynamics Stocks Stocks define the state of the system Stocks = Levels = States = Accumulations = Integration Stocks can only change by the action of flows Stocks decouple flows Make it possible for an inflow and outflow to be different (i.e, create a disequilibria) E.g., spend more than earn Make it possible for inflow to be controlled by different sources of information Stocks create delays Things that accumulate What is left if you stop time Stocks have inertia, memory, persistence If you turn off the flow to a stock, the stock remains Clouds represent stocks outside the system boundary Source Valve Inflows Stock Outflows Sink 6 Cornell University

, spend more than earn Make it possible for inflow to be controlled by different sources of information Stocks create delays Things that accumulate What is left if

7 System dynamics Flows A flow defines the rate of change in the system state Flow = rate Flows show some activity Disappear (or stop ) if you stop time Units of flows are units of the stock over time Math of stocks and flows S t = t ( Inflow Outflow ) ds + t 0 S t 0 Usage example Company resources are stocks Cornell University

flows are units of the stock over time Math of stocks and flows S t = t ( Inflow

8 Related terminology in other fields Field Stocks Flows Economics/SD Stocks Flows Original SD Levels Rates Accounting Balance Income Math Integral Derivative Deposits Bank Account Balance W ithdrawals Hiring Staff Firing Cornell University

Accounting Balance Income Math Integral Derivative Deposits

9 Examples from system dynamics Inflow 1 Outflow 1 Stock Inflow 2 Outflow 2 Hiring Workforce Retiring Firing Initiating Projects Products Under Development Launching Products P ro d uc ts In Production Discontinuing Products Cornell University

Initiating Projects Products Under Development Launching

10 Manufacturing flow 10 Cornell University

11 Causal loop diagram of Littlefield simulation People have difficulty with accumulation, feedback and delays With this debriefing students can visualize the stocks, flows, delays Students can discuss the structure of the simulation (structural transparency) Students can generalize the lessons from the simulation to general problems of operations including resource based view of the firm 11 Cornell University

structure of the simulation (structural transparency) Students can generalize the lessons from the

12 Research Designs to Measure the Value of Debriefing Group A Group B Group C Group D Group E Non-game teaching method Game debriefing Game + minimal debriefing Game + full debriefing Game + full debriefing + 2 nd game + debriefing Pretest Pretest Pretest Pretest Pretest Teaching Game Game Game Game 1 Postgame test Postgame test Postgame test Small debriefing Full debriefing Full debriefing Posttest 1 Game 2 Full debriefing Posttest Posttest Posttest Posttest Posttest 2 Long-term test Long-term test Long-term test Long-term test Long-term test Adapted from Crookall (2010) 12 Cornell University

Game 1 Postgame test Postgame test Postgame test Small debriefing Full debriefing Full debriefing Posttest 1 Game 2 Full debriefing Posttest Posttest

ESD.36 System Project Management. Lecture 6. - Introduction to Project Dynamics. Instructor(s) Dr. James Lyneis. Copyright 2012 James M Lyneis.

ESD.36 System Project Management Lecture 6 Introduction to Project Dynamics Instructor(s) Dr. James Lyneis Copyright 2012 James M Lyneis. System Dynamics Experience Survey Have you taken ESD.74, or 15.871