Archive for the ‘Supply Chain’ Category

It’s Time for More System Dynamics

Friday, April 3rd, 2020
Beer Game Bullwhip Effect Causal Loop Diagram

During these extraordinary days, reading the news and observing the real-time data and responses from policymakers, I realized how valuable it would be to teach system dynamics in our schools and universities to understand the structural foundations and related variables in large complex problems.

Created by Forrester, system dynamics has its roots in control system theory but has been applied to complex problems in social science, economics, politics and business management. System dynamics plays an important role in helping decision-makers avoid suboptimal decisions, often referred to as policy resistance.

The concept is simple: When you introduce a disturbance into a natural system, it may initially be able to cope with stresses and shocks. However, over time the system may react to the disturbance – or exhibit policy resistance – which may seem counterintuitive because of the time delays associated with the reaction. Much of the art of system dynamics modeling is discovering and representing the feedback processes, which, along with stock-and-flow structures, causal-loop diagrams, time delays, and nonlinearities determine the dynamics of a system [Forrester, 1968; Saeed, 1982; Sterman, 2000].

The use of system dynamics helps overcome the limitations in people’s intuition about complex problems and their often logically incomplete mental models. The resulting insights are intended to help scientists, policymakers, the media and the public at large better understand complex multi-cause and multi-effect relationships.

System dynamics simulations can also help the population to understand problems, policies and implications over time, I think it would be a great tool in K-12 classrooms as well as in other professional fields. “Education has taught static snapshots of the real world. But the world’s problems are dynamic,” wrote Jay Forrester.

If you want to learn more about System Dynamics during the shelter-in-place order, the System Dynamic Society is collecting resources from members and others that provide a systems view on the COVID-19 pandemic, including a video from Tom Fiddaman exploring a simple epidemic model for a community confronting coronavirus.

Check also a couple of models I created in the past that related to today’s toilet paper bullwhip effect and how coronavirus threatens the seasonal farmworkers at the heart of the American food supply:


Thursday, September 9th, 2010

ESD.763 Operations & Supply Chain Management taught by Víctor Martínez de Albéniz, associate professor in IESE‘s Department of Production, Technology and Operations Management, was an interesting class this summer semester.

Zara has become one of the most popular places to buy with over a 1,000 outlets all over the world and the owner of Zara, Amancio Ortega, is certainly on the list of the richest people in Spain.

After spring semester where we had to prepare business cases mainly about US organizations, it was great that Víctor included on his course several spanish company cases. Famosa and Zara were the two big major example that Martinez de Albeniz used to illustrate us the importance of Lean manufacturing and distribution strategies worlwide.

I enjoyed also preparing a case about Aldi´s German food retail (a following up case that I recommend is How Mercadona Fixes Retail’s ‘Last 10 Yards’ Problem)

buying kratom