Simulation Science

Jump into Learning about Simulation Science

2009-09-23T21:55:00.000+01:00

Intro to Simulation Science

Case Studies

Advanced Topics in Simulations

For Professors and Trainers

Warmly,
Justin Lyon

How Modern Software Methodologies and High Performance  Computing will Change the Face of Simulation

2009-09-23T14:13:00.002+01:00

The convergence of a number of significant trends is leading to a tipping point in the economic use of simulation across a wide range of complex domains. These trends include:

advances in programming technology, especially structured programming, object oriented programming and evolutionary computing (in effect, the “growing” of algorithms);
cost effective massively parallel supercomputer architectures enabling the most complex models to become visually meaningful on a range of thin client display devices and
the integration of previously independent modeling formalisms such as discrete event modeling, system dynamics, agent based modeling, dynamic systems and artificial life, resulting in far more realistic hybrid simulation models.

The integration of large geospatial models and real-time data feeds running on advanced parallel computer architectures will allow previously impossible combinations of real life with virtual world models speeding training, scenario planning and providing organizations with the improved foresight necessary to lead decision makers to their desired future rather than to unintended consequences and their feared future.

The advanced visualization tools will enable the most complex systems and sets of algorithms to be presented cost effectively to large groups of researchers or decision makers in a way that will improve understanding, lead to better team learning and break free of the difficulties of grasping holistic system effects by looking only at pages of numbers and simple graphs. The simulation of the near future will be more like an immersive video game – a comfortable environment for the current generation of engineers and managers – than a long night in the research section of the library.

These new simulacrums will provide for analysis across time: running models from past data to future possible scenarios; across space: using advanced mapping and stochastic image technologies into which a powerful set of metadata can be embedded; and will take advantage of evolutionary computing technologies (artificial life) to quickly and automatically evaluate the most promising combinations and dramatically improve pattern recognition capabilities. They will utilize dynamic 3-D graphics and virtual world effects to enhance understanding and enable wisdom to emerge from knowledge gained through the intelligent analysis of mountains of data.

Notes on AnyLogic 5.5

2006-08-23T09:38:00.000+01:00

General Notes

AnyLogic is an interactive modelling environment for building simulation models and allows a mixture of discrete event, sd and agent based (using UML state diagrams) models
It generates Java code that can be run in the environment or published as an applet and run in HTML
It is object-oriented, allowing the use/creation of a hierarchy of objects. It is also possible to embed objects inside other objects
Objects have some default behaviour that is inherited from their base classes. More advanced behaviour has to be coded using Java
Objects can have Parameters (set values that can be changed by users), Variables which can be changed dynamically and Ports which allow communication between objects

Notes re: System Dynamics Modeling

SD models make use of Variables and Parameters. Variables can be defined as stocks or as formulas
A formula contains a calculation
A Stock will have a differential equation (you fill in the + ‘rate’ or – ‘rate’) where ‘rate’ is the name of a formula. You can have multiple rates associated with a stock. It will also have an initial value that can be a constant, a Parameter, or a variable (evaluated at time 0)
In equations, t is used to get time. Simulation time is not calendar based
Parameters are not shown on the diagram, but are instead listed as properties of the encapsulating object (usually a Simulation object). This is similar to viewing properties of an object in an Excel or Access control
Connections are drawn between variables only when the equation is written that refers to the variable. You cannot add connections first, so it works the opposite way to most modern SD packages
You cannot move connections in any way, e.g. to avoid crossing lines
All variable and property names are case sensitive
The equation writer has a lookup capability that will create a list of all other variables, properties, built-in functions, and custom functions (you can write your own function in the form of equations or graphical relationships)
If you change the name of a variable, this does not automatically update any equations that use the variable. The link will be lost until the names in the equations have been manually updated
No units can be specified in equations and therefore there is not automatic unit checking
There is no obvious way of printing or copying the diagram
Animation can be associated with the model (this is displayed as a separate screen) where graphs, dials etc. can be shown, and parameters can be set. Lines would have to be added to show the structure of the model (bendy lines are not available, straight or poly-lines)

Notes regarding Discrete Event Simulations

DES models are built in two parts: the logic diagram and the animation
The Enterprise Library contains 44 pre-built objects that can be placed to form a logic diagram. These can be joined together to show the flow of entities and given properties to manage their behaviour. The logic diagram has a degree of animation itself
A description is shown for the object when you click on it in the Enterprise Library. This gives its parameters and an explanation of what the object does
The animation is created by drawing in shapes. Shapes are then associated with objects in the logic diagram by identifying them in the animation properties (can be selected from a dropdown list)
For example, queues are drawn as lines (can be poly-lines) and then selected as the animation for the queue object. Entities in the queue are form along the line, using spacing based on the capacity of the queue. A queue of infinite size does not look very good in the animation
Transit between objects is not shown in the animation. If transit is to be shown a network object must be added into the logic diagram
The states of resources (busy, idle, broken down etc) can be shown using images. Multiple images are selected for an image object. Code must be written to associate a resource state with an index for the image
When writing code, there is no code completion so it is necessary to have reference manuals available for the built-in functions and the java functions
You can create a new object (class) that is based on a combination of existing objects working together. For example, you could create a machine with its own buffer by adding a queue and a delay. The class can have properties added to it. This is then used as a single object on the main logic diagram
It also possible to create animation for a class. This animation will automatically be placed on a model animation when an object of the class is placed on the logic diagram
Network objects allow movement around an area via the shortest route on a network. Network resources can be set up that are required to move (or accompany) entities. Network models can be set up fairly quickly
1 to Many connections or Many to 1 connections can be created but default to Random and Round Robin (respectively). A 1 to 2 link can also be set up easily, with user specified criteria. More complicated arrangements require coding.
Conclusion – a bit more flexible than Simul8 in terms of visuals and some logic. Network modelling is easier to set up than in Simul8

NetLogo vs. AnyLogic

2006-08-07T09:11:00.000+01:00

Both tools are targeted as tools for Agent Based Modeling. Basically NetLogo is a tool for creating synchronous agents (do something in time steps) living in a grid.

Overall, there are more limitations than advantages with NetLogo in comparison to AnyLogic.

NetLogo is Java based, that is, the development environment is Java and models can be generated as an applet. Yet, the first limitation is NetLogo’s internal language, which you have to use while developing agent-based models. Although NetLogo is written in Java the modeling language is based on Logo and is procedure oriented. This is totally different from today's object oriented paradigm. AnyLogic’s internal language is Java.

NetLogo agents live in a grid. It works well on simple models, but it is a limitation for GIS and layout based detailed models. AnyLogic allows for maintaining discrete or continuous space.

In NetLogo, time is discrete. Agents can do actions only on time ticks (also known as synchronous agents). There are no events between ticks. In AnyLogic there are no time steps - agents are able to schedule events themselves at any moments of time.

I can say there is an advantage in comparison with AnyLogic – an easier learning curve. This is mainly due to the limitations of NetLogo - less features means less learning time.

Creative Learning Exchange

2006-08-06T21:43:00.000+01:00

So, you've stumbled across the Simulation Science blog and you want to start learning how to build computer simulations for your business? A good place to start is the Creative Learning Exchange. Start by trying to do the work that's designed for K-12 students and climb the learning curve!

Video Games - Are they good for you?

2006-08-06T20:51:00.000+01:00

As someone who builds computer simulations for corporations, I'm always interested in research of the impact of video games on humans. I often refer to our enterprise simulations as video games for chief executives. Chris Chatham wrote an interesting review of recent research on the impact of video games on our thinking. An interesting read!

Operations Everything

2006-08-06T20:34:00.000+01:00

It stocks your grocery store, schedules your favorite team's games, and helps plan your vacation. A primer on the most influential academic discipline you've never heard of. By Virginia Postrel in The Boston Globe, June 27, 2004

Read the full article.

Modeling General Motors

2006-08-01T08:40:00.000+01:00

This article, written by Mark Paich, discusses General Motors’ North American Enterprise Model, a system dynamics model of the entire North American automobile market. The Enterprise Model takes a broad look across the corporation and its marketplace, combining internal activities such as engineering, manufacturing and marketing with external factors such as competition for consumer purchases in the new and used vehicle marketplaces. Eight groups of manufacturers compete monthly for a decade across eighteen vehicle segments, making segment-by-segment decisions about price, volume and investment. The model enables Monte-Carlo analysis of alternative strategies. The goal is to find and assess the likely impact of improved strategies for managing the business that are robust across uncertainty about consumers, competitors, and the macro-economy.

This article presents a high level overview of the model. We discuss why and how the model was built and what sorts of results came from it. We discuss software tools we wrote to supplement Vensim: a profiling tool for finding inefficient equation formulations, and a syntax coloring tool for automatically color coding Vensim sketch diagrams according to selected criteria. Finally, we discuss the limitations of the System Dynamics paradigm for large models, and how Agent Based Models might complement traditional system dynamics.

Read the entire article.

Emergence in the Networkcentric Warfare Model for US Navy

2006-07-22T10:07:00.000+01:00

From Agent 2004 Confernece
Michael J. North, Argonne National Laboratory provides insight into the Navy's Networkcentric Warfare Model

Seth Tisue Question: "Can you give an example of what you mean by the results of an ABM being useful even though they’re not emergent?"

Michael North's Answer: "I’ll talk about [emergence] on an intuitive level. If you talk about it as being a counterintuitive result, emergence is — what’s the right way to put it — quicksand. Why, because what’s counterintuitive to you may not be counterintuitive to me. And so, the word itself becomes a problem.

But, for example, one of the models that we could talk about is a networkcentric warfare model for the Navy. Is it emergent? Well, the agents work together; they are able to keep the communications protocols running at the same time in a complex battlefield. They’re able to keep bandwidth going by staying close enough to one another to be able to hop messages over radios. And maybe that’s emergence or maybe it’s not, but the people we’re working for don’t really care about that. What they care about is being able to quantify what the individuals are doing, seeing if they’re getting the bandwidth that they need, understanding what the barriers are in getting the bandwidth that they need, and deciding what protocols are needed to keep the bandwidth going. And so emergence isn’t even really a question. It’s just a matter of tying the overall system structure to the individual behavior. So that’s an example of a model where emergence isn’t really the issue."

Simulation at John Deere

2006-07-22T09:42:00.000+01:00

Roger Burkhart, a technical staff member at John Deere & Company in Moline, Illinois, shared the following information on simulation work being done at John Deere during the Agent2004 conference. Roger was also one of the original members of the Swarm team and has been working in agent-based modeling for many years.

Question from Rod Sipe: "Once an executive suite gets a working understanding of the application of complexity science in general to their business, it transforms their way of thinking and their sense of what’s possible and therefore gives them a new vocabulary to express what they might want. How have you seen that evidenced in John Deere, which has to be one of the longest cases of people having thought that way?"

Burkhart: "We’ve had perhaps one of the longest continuous involvements, but I would not say the deepest in terms of internal applications of agent models because of the reasons that I went through, which is why I’ve started to switch into these other more visible direct product applications to raise that visibility. For example, recently, we’ve been making headway talking to the business people, so our next step is to get ownership by the business people, including some of these internal operational roles, supply chains, and customer distribution. And so the research has been very interesting. The crossover into the mainline business is still in progress."

The Cambrian Age of Economics

2006-07-21T13:58:00.000+01:00

Article: The Cambrian age of economics
Jul 20th 2006
From The Economist print edition

Quotes from an Economist article: Eric Beinhocker, of the McKinsey Global Institute, in his book “The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics” argues that economists should abandon blackboard deduction in favour of computer simulation. The economists he likes do not “solve” models of the economy—deducing the prices and quantities that will prevail in equilibrium—rather they grow them “in silico”, as he puts it.

. . .

An early example is the sugarscape simulation done in 1995 by Joshua Epstein and Robert Axtell, of the Brookings Institution. On a computer-generated landscape, studded with “sugar” mountains, they scattered a variety of simple, sugar-eating creatures, which compete for this precious commodity. Some creatures move faster than others, some see farther, and some burn sugar at a higher metabolic rate than their rivals.

. . .

Such simulations may be unpredictable, but they are nonetheless understandable, Mr Beinhocker insists. By toying with different parameters, such as metabolic rates or the height of the sugar mountains, analysts can learn how to “tune” their model to generate different results. This understanding may be more valuable than a forecast, he argues. But whatever such enlightenment is worth, it is not easy to communicate to others. The revelations contained in a deductive proof or theorem are easy to pass on: they leave a set of footprints for other people to follow, making it easy for a theory to persuade and convert. For simulations, by contrast, “the only way to see what happens is to run the model and evolve it—there is no shortcut.”

Article: The Cambrian age of economics
Jul 20th 2006
From The Economist print edition

McDonald's and Simulation Satire

2006-06-28T15:13:00.000+01:00

Here is a link to a interesting simulation of McDonald's - it is a satire on the company...see if you can manage the business! Not sponsored by McDonald.

Economics and Simulation - Complementary not Competitive!

2006-06-25T19:43:00.000+01:00

Economics and its Realm of Action is Based on a Simplistic (and Outdated) View of Reality.

The Utility function represents the individual, and it is set to reflect her preferences.
A paradigm based on the individual: an exogenous entity.
Key assumptions: markets exist for all possible goods, markets are perfectly competitive, and transaction costs are negligible.
Pareto Optimality: The optimum you get to where there is no way of making anyone happier without hurting someone else.
Economics is in dire need of a fundamental overhaul to bring it into alignment with 21st Century real world science!

But, wait a minute…you can’t assume utility functions are ‘outside’ of the system. They are part of the process and key to all social systems. They are part of the REAL HUMAN WORLD. What does this mean for economics? Well, it’s time for an overhaul. Way more than 90% of PhD programs in economics solely teach this patently and unnecessarily simplistic view of the world. Our utility functions are not accidental; no, indeed, we are the years of millions of years of evolution and there is a reason why we have so many instincts, memes, and histories. We don’t have the free will or free agency to which we often try to force ourselves to believe. True freedom is indeed a very, very hard thing to find. Our history (and our future) truly, truly matters.

In economics, there is no way to make judgments about the interaction between individuals/agents. The impenetrable individual is god in economics often to the detriment of the community and long term health of the individual and super organism. Yup, in all of economic theory, we never try to explain ‘why’ people do things, all we have is revealed preference – economists currently look at the preferences that people reveal – and from that we construct a utility function that are consistent with those preferences. Then, economists use those utility functions to make predictions about the demand function.

They don’t explain why the preferences are that way.
The old way of thinking that each agent is independent of other agents – a very bad assumption only made to make the models tractable using linear mathematical techniques
Economists don’t allow for any intrapersonal comparisons – part of normative economics and left to philosophy – think of taking money from the rich via taxation to help the poor. The implication is that all of Economics is based on Pareto optimality – that is ALL that they strive for – to arrive at Pareto optimum. That is an (1) an unclear proposition and (2) is not really useful in the real world.

We believe the science of the 21st century will go significantly beyond what classical economics (Adam Smith – think of his ideas regarding the 'invisible hand') based on the idea of the impenetrable individual. Classical economics was overturned by the Great Depression. Then came John Maynard Keynes who developed Keynesian economics where the government played a much more active role – popular from the 1930’s to the 1970’s – some people today are still embracing this idea which goes against the laisez faire ideas of classical economic theory. Keynesian economics -- the government hires some people to dig holes and then hires other people to fill them! Or, as I look to put it, "Keep them busy so they don't rebel!"

After the stagnation of the 70’s high unemployment and high inflation resulted in the attack of Keynesian economics which resulted in a neoclassical economics which is more related to classical economics than Keynesian, but does recognize that prices can sometimes be sticky and that sometimes the involvement of government can be good. The successful and pragmatic tenure of Alan Greenspan as chairman of the Fed is reflective of this neoclassical economic paradigm.

Pareto optimality represents the core of Neoclassical economics’ welfare theorems. The Pareto optimum is therefore nothing more than a sacred cow that must be slaughtered to save Economics (and our world) from itself. It’s a great concept in theory, but in reality, in the messy real world, people are not rational, there is asymmetry of information, transaction costs are not negligible and sometimes you have to hurt people (by putting them in prison or even killing them) to save the larger collective.

Everything that our model embraces would be considered esoteric by a standard neoclassical economist of today (the vast majority of today’s economists are neoclassical).

Reductionism Nightmare

2006-06-25T11:38:00.000+01:00

People new to simulation have a tendency to try to model an entire system thinking that by making a huge simulation of their entire business, they will make better decisions.

They are wrong.

A simulation is a map. A map is intentionally simplified to focus attention on certain features (roads, distances, maybe even topography - depends on the map). A map is NOT the actual real-world. A simulation is NOT the real-world.

We do the same thing with simulations by carefully defining the model boundry. In agent based modeling, we often find simple rules that give rise to highly complex behavior.

People find themselves drawn into a rabbit hole of adding more and more detail to their simulations . . . when they probably should simplifying instead of adding more complexity. You can analyze all the separate parts of a system in horrific detail -- and guess what, you will know quite a bit, but will lack wisdom on how all the parts come together to create something larger than the sum of the parts.

Many simulation newbies find themselves trying to think their way down the rabbit hole. It is a dead end because it will lead you to selfish genes and superstrings. Which is not helpful for making money. If you try to think this all the way down the rabbit hole, well, it’s tough, stressful, horrifically discomfiting and may result in severe psychological trauma. The algorithms of Life are actually very, very simple. Don’t over think it.

Once you understand that algorithms (policies), no matter how simple, can give rise to complex patterns, then you can start looking top down for the pattern, map out the policies, change the policies to kick start a phase transition to a new, more desired ‘behavior over time’ pattern. The goal is to hopefully stabilize around a new pattern (behavior over time) which better suits the social agents optimum

Think of locusts that when they reach a critical mass. Biochemical triggers cause their legs get shorter, their wings grow and they swarm -- as if they somehow knew that it was time as a group to take action and become a new organism. . a swarm of locusts. It’s as if the super organism (the swarm) that emerges knows it is time for the locusts to move to new food sources, but in reality the rules (policy/algorithm) that drive the emergent behavior are very, very simple indeed. It’s the accumulation and feedback that drives the swarm and not an intelligent, conscious design at a higher level.

Think of Axelrod’s ideas into coalition forming -- where do we draw a line, that is, where do we establish our borders –- this process defines the objective function of the enclosed agent. So, we can change the borders and change the defined agent. In system dynamics one of the key lessons for a successful modeling project is the clear definition of the borders of the models. Too small and you mess up. Too large and you mess up. It’s the Goldilocks principle in action.

As a conscious creature you are in charge of deciding where your genes or memes are going to go. That’s kind of the most important part of your life; that all that we are is just experiments. There is no foreordained end because it is going to be based on the rules of the future .. It’s seems like a weird kind of causality for many people.

The future pulls the present into being. It’s a paradigm shift akin to the realization that the earth revolves around the sun.

System Dynamics provides stellar insight into forming coalitions and creating a desired future that pulls us to success (or failure). Really, it’s our choice. Personally, I choose success, but many people’s fear of success is as damaging as their fear of failure. And, so they rot on the vine never risking, never failing and never succeeding.

So, if Individuals ARE interconnected, if they are NOT independed, if they are NOT rational, then why are we making business policies and world policies based on an economic psuedo-science that is only accurate and useful only in THEORY and not in the REAL WORLD?

I argue that it’s because old people are afraid to let computers ‘do the math’ for them. It’s like these people who want student’s to suffer and learn how to use a slide rule or to chunk out mathematics by hand as a form of personal torture – if I had to suffer through this hard math stuff, then, by god, so will you. Enough already. Embrace the computer, let it do the math so that us humans can focus on doing other, more enlightening things with our businesses and our world.

Computer Experiments

2006-06-22T11:30:00.000+01:00

In 2003, we celebrated the Fifty Year anniversary of the discovery of DNA. Less well know is the fact that in 1953 Enrico Fermi and two of his colleagues at Los Alamos Scientific Laboratory, John Pasta and Stanislaw Ulam, invented the concept of a "computer experiment." Suddenly the computer became a telescope for the mind, a way of exploring inaccessible processes like the collision of black holes or the frenzied dance of subatomic particles - phenomena that are too large or too fast to be visualized by traditional experiments, and too complex to be handled by pencil-and-paper mathematics. Fermi and his team created a virtual world, a simulation taking place inside the circuits of an electronic behemoth known as Maniac, the most powerful supercomputer of its era. Their test problem involved a deliberately simplified model of a vibrating atomic lattice, consisting of 64 identical particles (representing atoms) linked end to end by springs (representing the chemical bonds between them).

Perhaps the most important lesson of Fermi's study is how feeble even the best minds are at grasping the dynamics of large, nonlinear systems. Faced with a thicket of interlocking feedback loops, where everything affects everything else, our familiar ways of thinking fall apart. To solve the most important problems of our time, we're going to have to change the way we do science.

Nonlinear models quickly become intractable without computers. Intractable because the math gets complicated really quickly. So, we have to let go and let the computer to the math for us. This is tough for us humans to do because it is hard to let go of the perceived control of solving math in our heads or by hand. Turning it over to the computer makes us think that we are going to lose control of the business. Nothing could be further from the truth.

Simulation Screen Shots

2006-06-13T11:30:00.000+01:00

Many people ask me to see screen shots of simulations developed for clients. Even though we have many demo models available within the AnyLogic software that are derived from client work, people still want to see the actual interfaces developed for clients. So, here are a few screen shots for those people who want to see actual client related work. All numbers are placeholders only to protect the interests of the representative companies.

Gaming Reality

2006-05-23T12:25:00.000+01:00

The Simulation Software Survey, by James J. Swain, is the seventh biennial survey of simulation software for discrete-event systems simulation and related products.

From his article . . .

"Simulation modeling has increased in visibility and acceptance over the years, thanks to improvements in commercial products and particularly in the sophistication of animation. The public has been exposed to simulation through games and the media, such as the Matrix movies. The gaming industry has led the way in providing the general public with accessible and increasingly realistic simulation-based entertainment. The genre has developed far beyond simple shooter games. Action-oriented simulation includes sports, flying and combat, while other games are competitions to build and win financial or political empires, construct and operate an amusement park or zoo, not to mention the varied social simulations of the "Sims." One of the most sophisticated action simulations is America's Army, which depicts both training and action scenarios that can be combined in multi-player games. The Web site (americasarmy.com) boasts more than 6 million registered users. While the level of fidelity varies over these models, the pervasiveness of simulation and of role-playing games is great enough that the concept is easily accepted. We may have reached a point where the idea of simulation is taken for granted by the general public."

For more information on Enterprise Simulation or simulation in general, visit the Simudyne web site.

2006-05-01T22:48:00.000+01:00

On CRMGuru, System Dynamics is mentioned during a telephone interview with three CRM experts.

Grahm Hill says:

But, I think even the largest corporations looking for a much quicker and much higher payback on their investments, particularly in CRM, which seems to have a very bad record at delivering, for whatever, reason, and so they're looking at a more systematic vs. to take smaller risks, so that would start with, for example, one company I worked with recently used the strategy mapping process developed by Kaplan and Norton that basically built simple system dynamics models on paper, showing how the various factors that drive the business link to each other.

Mei Lin Fung says:

This whole notion of system dynamics, it's a discipline that's been around for 20, 30 years, invented by Jay Forrester, system dynamics traces the links between the different things that go on, so the value space model is a dynamic model of health, and you can look at multiple agencies, multiple providers, multiple things going on, and how they interact with different feedback loops. Talking about metrics for a dynamics system is very, very different from just saying what are the scientific metrics like in the original medical model.

Read the whole article!

Jamaica and Simulation

2006-04-01T15:41:00.000+01:00

The Planning Institute of Jamaica (PIOJ) has begun the first phase of its plans to create a long-term social and economic simulation for Jamaica's development up to 2030.

The contract to develop and implement a comprehensive and integrated development planning model called the 'T-21 model', will cost the agency US$285,000 ($18,525,000). Click here for the story.

The Millennium Institute's Threshold 21 (T21) Integrated Computer Development Model is a quantitative tool for integrated, comprehensive development and policy planning. The model is transparent, collaborative, interconnected, valid, and customizable. Its purpose is to support the larger process of planning by facilitating information collection and organization and analysis of development strategies. It can provide insight into the potential impact of development policies and strategies relative to desired goals and objectives

Synergy and Complexity Science

2006-03-31T15:20:00.000+01:00

Synergy and Complexity Science
by Chris Lucas
http://www.calresco.org/wp/synergy.htm

Many educated people today have heard of complexity science (also called complex systems science, complex adaptive systems or complexity theory), rather fewer seem to have heard of synergy (also called synergic/synergistic science or synergetics) which is the idea that wholes have properties (functional effects) different than those of the parts, yet these two ideas are highly interdependent and both are relationship oriented. Here we will investigate these two perspectives and see how far they can enhance each other, leading to a merging of both disciplines in an evolutionary metascience.

Most people in the world today seem to automatically treat their own system as if they were in competition with every other system, whether this is at a personal level, pressure group, nation or ideology (a one-dimensional exclusivist dogma). By doing this, important aspects of both systems are lost, indeed if the imagined 'competition' goes as far as mutual declarations of 'war' (explicit or implicit) then all aspects of both systems can be in mortal danger. We see this in conflict situations all over the world. Yet, in general, competition is a minor aspect of the natural world, and cooperation (two systems working together for mutual benefit) is far more prevalent. Why is this ? Despite widespread blinkered attitudes to this question (especially from reductionist geneticists) which refuse to even acknowledge the extensive scientific evidence, we can see the answers quite clearly within human society, and in fact this cooperation proves to be vital if we are to have any society at all. Without synergy, there is no complexity, no life and no humanity...

Simulation Experiments & Efficient Designs

2006-03-16T20:16:00.000Z

The Simulation Experiments & Efficient Designs web pages serve as links to some of the research and application of efficient experimental design to simulation studies at the Naval Postgraduate School. Our overriding approach has been to advance the state-of-the-art in conducting large-scale simulation studies, by developing and disseminating experimental designs that facilitate the exploration of complex simulation models.

George P. Richardson's System Dynamics Papers

2006-03-14T14:36:00.000Z

George P. Richardson's teaching and research center on computer-based tools and analyses for public administration and policy. His recent work has focused on public policy problems in social welfare and the use of formal computer-based modeling methods to help groups move toward policy consensus in complex dynamic systems. He founded and served for seven years as the executive editor of the System Dynamics Review and is the author of Introduction to System Dynamics Modeling with Dynamo (1981), Feedback Thought in Social Science and Systems Theory (1991), both of which were honored with the System Dynamics Society's Forrester Award, and the edited two-volume collection Modelling for Management: Simulation in Support of Systems Thinking (1996).

Check out his papers and other resources here:
http://www.albany.edu/~gpr/Papers.html

Social Network Analysis for Business

2006-02-27T01:16:00.000Z

An introductory bibliography on social networks is available here:
http://connectedness.blogspot.com/2005/05/annotated-bibliography-of-social.html

The Complexity and Social networks blogs covers various issues: http://www.iq.harvard.edu/blog/netgov/

You can find even more information on SNA by Ines mergel here: http://www.ksg.harvard.edu/netgov/html/sna.htm

Best,
Justin Lyon

Market Trends are Driving Adoption of Simulation Science

2006-02-22T21:33:00.000Z

Today, simulation technology, riding many of the past two decades of technology trends, is finally mature enough for widespread adoption as an integral part of a company’s IT and financial systems. Simulation Science has reached a point (after 45 years of R&D) where it is cost effectively usable by global corporations – what use to take 100 hours will now take 10 hours.

Enterprises need to make faster and faster decisions that are correct

Hypercompetition
Traditional consulting is just not fast enough
Less tolerance from Wall Street and Governments for mistakes/poor decisions

Increasing requirement for fact-based/data driven decision making

Enron, Compaq, etc.
Sarbanes Oxley
A need for the tie between strategy and execution

There is no such thing as strategy, only flawless strategic execution

Flawless individual decision making
Flawless collaborative team decision making

Increased desire for ‘Chaordic’ or ‘Escher Cycle’ or ‘Execution’ processes

Simulation Science is being featured in major non-academic business publications

Fortune & Forbes – November 2005
Strategy + Business – November 2005

Globalization

The Internet facilitated the emergence of a global ‘consciousness’ which is making things more complex and harder
Desire for global solutions not atomic products

Increasing productivity is being required of the top minds within organizations

Processes/transactional functions have been radically improved
Leading to outsourcing/transfer of algorithmically simple knowledge-work
Leading to the automation of white collar work

Diffusion of knowledge from the few to the many

Knowledge management systems
Google! Search
Internet access
Business Intelligence systems and initiatives

Technology Innovations

Internet, WWW, Semantic Web
Enterprise architecture
Virtual collaboration
Processor speed and graphic acceleration
Ubiquitous broadband/wireless access

Who is Simudyne?

2006-02-20T18:38:00.000Z

Simudyne is a collection of resources held together by strategy. Managing a vast network of suppliers, alliances, partnerships and individuals requires strategy with a clear focal point and one that embeds the corporate identity, values and quality standards. The Simudyne brand serves as that focal point. Simudyne is the focal point of all stakeholders, consumers, skilled employees, suppliers and contractors, partners and investors.

Through our carefully structured alliances, we can combine mutual assets and capabilities to gain the benefits of scale that Simudyne would be unable to achieve alone. Our customer-centric pooling of resources is mutually beneficial for our partners and customers. It is a paradigm shift that goes beyond simple transactional relationships to build long-term capabilities through alliances that drive corporate growth and value.

By recognizing that the Simudyne brand is a collection of resources rather than a single asset, we can create a brand asset that will grow in value over the next five years. Like Microsoft or Coke Cola, we anticipate that much of our future value will derive from intangibles. This is the first step in understanding the otherwise obscure parts of what our brand is and what drives brand performance.

In technical terms, Simudyne is an autocatalytic, self-regulating (that is, homeostatic), adaptive, nonlinear, complex organization, the behavior of which harmoniously exhibits characteristics of both order and chaos. We are an entity whose behavior exhibits patterns and probabilities not governed or explained by the behavior of its parts. We are based on the fundamental organizing principle of nature and evolution.

In crass, commericial terms, Simudyne is a legal entity that generates large positive cash flows.

Intro to Simulation Science
What is Simulation Science?
2006 - The Tipping Point for Simulation Science
Why will Simulation Science tip in 2006?
Why Should YOU Care About Simulation Science?
Who is Simudyne?

Case Studies
Case Studies of Simulation Projects
How Much Do Simulations Cost?
Selling Simulation Science

Advanced Topics in Simulations
Usability and Simulations
Structure, Behavior over Time, and Emergence
On a Hierarchically Decomposed Agent by Dr. Suarez

For Professors and Trainers
Simulations for Management Training and Learning
Why use simulations in training?
Simulations for Corporate Training

Warmly,
Justin Lyon

© 2005 Justin Lyon. All Rights Reserved.
Reproduction permitted with permission of author: Justin Lyon.

Systems Failure - Why Governments Must Learn to Think Differently

2006-02-20T18:34:00.000Z

From Bob Williams EVAL-SYS and Colin Elwood

Jake Chapman's book - "Systems Failure; why governments must learn to think differently", can be downloaded from here:

http://www.demos.co.uk/systemfailure2_pdf_media_public.aspx

Want to find out if you should open that ice factory in Anchorage?

2006-02-20T18:20:00.000Z

A great article by Daintry Duffy on the power of business simulation.

Once the province of statisticians and industrial engineers, simulation software has evolved into a more user-friendly desktop tool for modeling a business process or scenario. Increasingly, the target audience for many simulation packages is the CEO and his executive team. "Simulation is not only the best way to determine how to solve a problem or address an opportunity, but a great way for an executive to get unexpected insight into how his or her organization behaves," says Michael Schrage, author of Serious Play: How the World's Best Companies Simulate to Innovate (Harvard Business School Press, 1999). It can also help business leaders recognize and address issues they might otherwise have missed. "Most executives look at their business and realize that they are not as efficient as they could be, but they can't see the inefficiencies," says Brian James, chief methodologist with Proforma, a Southfield, Mich.-based business process modeling software vendor. "By viewing a business process across organizational boundaries, you can see where opportunities for improvement exist, where time is being wasted and where resources are being spent."

More here: http://www.darwinmag.com/read/100100/pretend.html

Barriers to Adoption of Simulation Science

2006-02-12T21:44:00.000Z

Humans are not rational. Any marketer can tell you this. It is possible (though not always easy) to manipulate humans to purchase goods that are healthy or unhealthy, needed or unneeded, intelligently designed or stupidly thrown together, taste good or taste bad, etc. ad nausea. Good marketing can sell anything: Frozen Pizza, Flavored Sugar Water, Boxes, Cigarettes, Software, Hardware, etc. Rationally, simulation science is better than the old way of doing strategy and anlysis. Yet, irrational humans will ignore this reality until their competitors put them out of business.

Marketing proves that economic theory is nothing more than ivory tower thinking that fails miserably in the real world in light of the advances in the 21st century. It was good enough in the past to build competitive advantage, but using solely economics today that is uninformed of the realities of simulation science is bad business and may land executives in jail if they continue to cling to what have become outdated and erroneous views of how the business world actually works.

Jargon and Ego appears to have limited the adoption of simulation science. I would venture to guess many experts in the simulation community has, at some time, aspired to be the next Newton or Galileo of the 'non-linear' world. Thus, fights and bickering over language and jargon developed and in doing so confused all of us simpleminded business people who just want to make more money for our firms and our families.

Ignorance is Bliss. Most businesspeople are too worried about making payroll to worry about learning a new approach to management unless they are 100% convinced that they HAVE TO LEARN IT TO SURVIVE.

DUMB IT DOWN. Scientists always like to use big words (jargon) because it makes them feel smart and it is more accurate. Yet, popularization relies on simplification. Very often, to simplify science is not an easy task. Some scientists think simplification inevitably means distortion of reality.

In their attempt to bring science to the public, popularisers constantly face the danger of distorting the 'truth.' Nevertheless, as good popularisers prove, it is possible to reach a balance between scientific rigour and journalistic interest. One of the keys to this balance is to simplify the issues to the point where the audience will understand, without oversimplifying them. Although some scientific subjects are easier to simplify than others, the capability of the populariser plays an important role in the process.

Audi Q7 and Simulation

2006-02-08T15:49:00.000Z

Pulled from here: Developing the Audi Q7

Among Audi employees were many who were closely involved in the Audi Q7 progress, its appearance and its design long before they were able to handle a single component “in the flesh”. Never before had such intensive use been made of computer-aided simulation tools from the virtual world. Never before had so many of the Audi Q7’s characteristics been portrayed with the aid of bits and bytes, and never before had so few actual prototypes been built and, at the same time, such a high level of production maturity attained.

The advantages are obvious: everything than can be designed, destroyed, tested, modified and displayed on a screen in the virtual world of the computer only needs to be confirmed when actual hardware – culminating in the “real car” – becomes available. This not only cuts development time and cost but also boosts quality, since any conflicts of objective affecting the car can be eliminated even more accurately and efficiently."

More here: Developing the Audi Q7

Global Roadshow

2006-01-23T21:26:00.000Z

Friends and Colleagues,

The global roadshow continues!

If you or people you know want to reach me, please give them my email address as that's the best way to get ahold of me.

My new global mobile phone number is on order.

Here's my 2006 January/February Schedule:

23-24 Jan - Memphis (USA)
25 - 26 Jan - Dallas (USA)
27 - 29 Jan - San Antonio (USA)
30 - 31 Jan - Memphis (USA)
1 - 4 Feb - New York City (USA)
5 - 6 Feb - Memphis (USA)
7 - 14 Feb - London, Harrogate (United Kingdom)
15 - 17 Feb - Spain
18- 19 Feb - London
20 - 28 Feb - Memphis (USA), Raleigh-Duram, Atlanta (USA), Florida (USA)
1 March - Lisbon (Portugal - back home finally!!!)

Best to reach me via email at justin1028@yahoo.com

Intro to Simulation Science
What is Simulation Science?
2006 - The Tipping Point for Simulation Science
Why will Simulation Science tip in 2006?
Why Should YOU Care About Simulation Science?

Case Studies
Case Studies of Simulation Projects
How Much Do Simulations Cost?
Selling Simulation Science

Advanced Topics in Simulations
Usability and Simulations
Structure, Behavior over Time, and Emergence
On a Hierarchically Decomposed Agent by Dr. Suarez

For Professors and Trainers
Simulations for Management Training and Learning
Why use simulations in training?
Simulations for Corporate Training

Warmly,
Justin Lyon

© 2005 Justin Lyon. All Rights Reserved.
Reproduction permitted with permission of author: Justin Lyon.

Your Invited!

2006-01-18T14:35:00.000Z

I'd like to personally invite you to attend an upcoming meeting in Harrogate (United Kingdom) on 9th-10th February 2006. Your key benefits:

An opportunity to hear leading experts present their thoughts on the use of System Dynamics for policy development and to enjoy lively debate

Learn (more) about practical applications of System Dynamics and Simulation

Meet fellow simulation practitioners and academics to share experiences

Something for everyone: newcomer or seasoned practitioner

Actively contribute to the growth of Simulation within the UK

It is not a conference as such, since no formal papers are presented, but a learning and networking opportunity for UK people.

Who Can Come?
YOU can come! The meeting is open to anyone with an interest in simulation; you DO NOT have to be a member of the System Dynamics Society.

Membership of the UK System Dynamics Society Chapter is free to anyone who wishes to join and those attending the gathering are admitted by default.

What Will Happen?
The intention is to give you a flavour of some
state of the art applications in system dynamics AND an opportunity to question and learn from experts in the field across a wide spectrum of issues.

Keynote Speakers

Etiënne Rouwette of Radboud University, Nijmegen,
The Netherlands

Insights into the best approaches for building effective models in wider teams

Peter Lacey of the Whole Systems Partnership

The use of qualitative and quantitative modelling in driving change by showing policy outcomes in UK health policy.

Justin Lyon

The future of systems modelling and the approaching "tipping point" for the whole field.

I look forward to seeing you there!

Email me and I'll send you the location details for the open event in Harrogate on 9th-10th February 2006. It will be worth the investment of your time.

Warmly,
Justin Lyon
justin1028@yahoo.com

Selling Simulation to Senator John Edwards

2006-01-05T16:04:00.000Z

Friends and Colleagues,

Dr. Suarez at Trinity University was kind enough to invite me to meet Senator John Edwards on 30 November 2005 when he gave a speech in San Antonio, Texas.

During our brief chat with Senator Edwards, we pitched him on using simulations to help in moving people from poverty to the middle class in America.

We explained that it could build on the work done in system dynamics at MIT by Professor Forrester and many others relating to urban planning. Dr. Warren at London Business School also has an excellent approach for policymakers interested in fact-based, quantitative decision-making. We can also tap into the work done by Stephen Guerin of RedfishGroup and Keith Hunter at Carnegie Mellon University on using agent based models in affordable housing searches.

Senator Edwards was intrigued. He connected us with his Finance Director, Josh Brumberger, with whom I spent 10 minutes over drinks discussing Simulation Science. He gave me his email and suggested we talk in more detail.

I asked the FRIAM and System Dynamics simulation communities if they had any thoughts on how we might use simulation to develop policies for getting rid of poverty in America.

Interestingly, I got 16 responses within 72 hours from the agent based modeling community in Santa Fe (FRIAM@redfish.com) containing ideas for ways to use simulation to improve decision making for the US government. What an amazing community!! Congratulations on being a tremendous success!

And the response from the System Dynamics community? Zero. Yup. ZERO. Not one insightful comment from ANYONE unless I missed it in my inbox.

I've spoken to Josh Brumberger via teleconference and they are awaiting our brief on the power of simulation (including system dynamics) for addressing poverty in the US.

Are there ANY system dynamics people out there interested in helping develop a brief for Senator Edwards? Does NO ONE in the System Dynamics community care about helping poor people?

What happened to the spirit that Jay Forrester pioneered with his work on Urban Dynamics? I thought the SD community were the leaders of addressing these types of issues? What gives?

If you are interested in helping us, please send your ideas to me at justin1028@yahoo.com and I'll put them into a brief for Senator Edwards and his staff. I'll credit all ideas in the brief. I'll share the final brief with the community.

You never know what might come of this, but I could not pass up the opportunity to bend Senator Edwards' ear about the power of simulation, agent based modeling and system dynamics!

Intro to Simulation Science
What is Simulation Science?
2006 - The Tipping Point for Simulation Science
Why will Simulation Science tip in 2006?
Why Should YOU Care About Simulation Science?

Case Studies
Case Studies of Simulation Projects
How Much Do Simulations Cost?
Selling Simulation Science

Advanced Topics in Simulations
Usability and Simulations
Structure, Behavior over Time, and Emergence
On a Hierarchically Decomposed Agent by Dr. Suarez

For Professors and Trainers
Simulations for Management Training and Learning
Why use simulations in training?
Simulations for Corporate Training

© 2005 Justin Lyon. All Rights Reserved.
Reproduction permitted with permission of author: Justin Lyon.

Making Money

2006-01-05T15:29:00.000Z

I've discovered that the sim community really needs to focus on making money, lots of money, and then they can start applying their insights to issues such as global warming. Call it the Steve Jobs or Bill Gates business models if you want!

Meadows and Forrester let us all down in the SD space by bogging us down in the quagmire of global warming and the limits to growth debates back in the 1970's. We've all been fighting to gain credibility ever since. See Magne Mryveit's article, The World Model Controversy, for an excellent overview of this debate.

Then Peter Senge sent us down a dead road with CLD's for beginners (which hides accumulation and depletion -- key points for SD). Sure, for experts, CLD's are essential, but for most beginners, it's a dead end road. I speak from experience. This is not to put down Peter's excellent books, rather, by not focusing attention on stocks, he removed one of the simplest and most effective ways for analyzing a system simply. By focusing on feedback alone, he made something simple unnecessarily difficult. See Kim Warren's approach for a simpler and more effective introduction to system dynamics and simulation.

That being said, it's clear from Beyond the Limits and other simulation studies that our technologies have much to offer the world to improve it -- both from a sustainability perspective and from a making money perspective.

Usability and Simulations

2006-01-02T00:01:00.000Z

Interesting paper here on human computer interaction, xml and simulation development. Interesting simulated combat example>

http://www.cise.ufl.edu/~fishwick/tr/03/scs4.pdf

I like this definition of a simulation model as "a source object whose components and operation are meant to capture dynamic attributes of a target object."

Important point: One of the core strengths of Simudyne is it's focus on applying design skills from the web world to the development of simulations for corporations.

This paper supports my assertion that usability has been a major weak spot in most simulation projects. Redfish projects are a notable good example of linking good HCI design with robust simulation models.

Further, the collaborative technologies that Simudyne is using takes us way beyond the simple web 1.0 and embraces fully the idea of web 2.0 and even, in my not so humble opinion, extends us way beyond the current ideas of most webbies. Simudyne's simulations, based on the prototypes built to date, will really take us to the next level in sim creation.

Structure, Behavior over Time, and Emergence
Why Should I Care About Simulation Science?
2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

© 2005 Justin Lyon. All Rights Reserved.
Reproduction permitted with permission of author: Justin Lyon.

On a Hierarchically Decomposed Agent by Dr. Suarez

2005-12-13T13:01:00.000Z

Dr. Suarez at Trinity University has published some amazing ideas on a general theory of collective behavior and structure formation, with a resulting architecture that can be broadly applied. The proposed model represents a decomposition of intent, based on the idea that an agent’s behavior, whether it represents an individual or a group, can be seen as an emergent property of a collection of intertwined aims and constraints. He considers a disentangled agent that is formed by multiple and relatively independent components. Part of the resulting agent’s task is to present alternatives, or 'fields of action' to its component selves. Correspondingly, the composed agent is itself constrained by a field of action that the superstructure to which it belongs presents. The superstructure of agents possesses a certain amount of cohesion, and can thus be ascribed agency and modeled as a unit; its independent parts could be consciously or evolutionally constructed and aligned.

Simulations for Marketing

2005-12-08T19:19:00.000Z

There is a great article on the use of simulation for marketing in the November issue of Forbes on p93.

Game Theory
By Allison Fass Nov 14 '05
in Forbes

Inspiration for the next Coca-Cola or Unilever marketing campaign might come from a computer game that looks an awful lot like The Sims.

The Crtical Path - Simulation and Management Science

2005-11-28T08:09:00.000Z

If you are interested in learning the basics of simulation science, I would recommend purchasing the book The Critical Path. It is the start of your journey to unlocking the power of enterprise simulation.

The fundamental challenge facing business leaders is to drive performance into the future. To tackle it effectively, they need a clear understanding of what causes performance to improve or deteriorate over time and what power they have to change this trajectory for the better.

Without such an understanding, they risk making poor choices about their future, either by failing to exploit promising opportunities or else by pursuing objectives they can never achieve.

The Critical Path sets the agenda for building business strategy. It seeks to provide managers with sound answers to three crucial questions:

Why is our business performance following its current path?
Where is it going if we carry on as we are?
How can we design a robust strategy to transform this performance in the future?

Existing management tools and approaches offer little help with these issues. Here, we provide reliable, practical frameworks that combine to create a living picture of how an enterprise actually works. They show you how to find the levers that are under your control, and how to choose the right ones to accomplish your specific goals. They suggest how you can defeat competitors in your efforts to develop your future, and deal with the powerful external forces that can thwart your plans or work in your favour.

The Critical Path is the road your organization travels in order to build and sustain the resources and capabilities that will shape its future. This book provides a practical, in-depth guide to help you in this difficult but rewarding journey.

About the author Kim Warren
Kim is a Teaching Fellow in Strategic Management at London Business School. In addition to teaching on MBA and executive programs, he consults and coaches leadership teams in his approach.

Why Should I Care About Simulation Science?
2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Warmly,
Justin Lyon

© 2005 Justin Lyon. All Rights Reserved.
Reproduction permitted with reference to author: Justin Lyon.

Structure, Behavior over Time, and Emergence

2005-11-27T19:10:00.000Z

I tend to think of structure in a system dynamics simulation as a hierarchy of objects that provide insight into the interrelationships of the various objects.

System Dynamics 'Structure' is a hierarchy of objects assembled in the following process:

A. You define the boundary of the system.
     1. You identify the feedback loops.
          a. You identify the stocks
          b. You identify the flows
               1. You articulate the policies as flow equations

Note that two variables, stocks and flows, capture ALL the aspects of the system under study. And, the flows capture all the information on the policies of the system under study.

These processes are the building blocks of simulations.

Everything in the universe is a process. EVERYTHING.

Simulation Science is commercially very valuable stuff. Think billions of dollars not millions.

In business, we create objects that are assembled into representations of workflow processes with mapping to data warehouses for real-time information access.

In nature, like in a biochemical process, we can create a simulation model that captures with some degree of fidelity the processes that we wish to better understand (like production of an amino acid in bacteria).

Stocks, such as a stock of customers, are accumulations of many autonomous humans (agents). The inflow of new customers captures all the information on the policies (such as marketing) that drive the accumulation of customers. The outflow of customers captures all the information on the policies (such as poor customer service) that drive the depletion of customers.

Steve Guerin at Redfish Group refers to these as 'aggregated super-agents.' Dr. Suarez at in Business Administration at Trinity University refers to them as 'upper-level agents.' Others refer to them as 'stocks.' Others refer to them as 'levels.' I call them 'bathtubs.'

Behavior over time EMERGES from structure. I use EMERGENCE as a concept because all too often the behavior of a system is counter-intuitive to what we actually observe; it arises from nothing, yet is clearly visible. Some explain, where possible, behavior over time as resulting from the interaction of multiple feedback loops and the concomitant switching loop dominance.

That is, I think that the ABM folks (at Santa Fe Institute, Trinity University and other spots around the world) and the SD folks (at MIT, LBS, WPI, LSE and other spots around the world) have their own particular jargon which, in my not so humble opinion, all means something similar – life is not reducible to a simple set of deterministic and solvable equations.

That is, I argue that the concept of 'emergence' is related or perhaps even the same as the SD concepts of 'behavior over time' as a result of structure?

Of the interesting systems for study in the world, 99.99% are not solvable by humans without the aid of computers. And, many of those 99.99% of non-linear systems are not 'solvable' with mathematics known to humans.

This should really irritate a lot of people because everyone keeps trying to find some Newtonian-like super-equation for biology that will 'answer' all our questions, but no one will ever find it. It is a will-o-wisp.

We can only solve the problems of the business, nations and the world by the close and intimate interaction between humans and computers. This interaction must be governed by an appreciation of reality as understood through the lens of Simulation Science, that is, complexity science, chaos theory, nonlinear science – choose the jargon that you like.

That is, this must always be kept in mind, ALL models are false, some are useful and some are dangerous.

There are NO point predictions. No ULTIMATE answers. No TRUTH.

There is only foresight into plausible and probable future scenarios that may or may not happen.

More and more I'm thinking that system dynamics, aggregated super agents, upper level agents, etc. ad nausea, are the 'physics of biology;' the 'meta-engineering' of life through the wonderful, yet blind and simple algorithmic process of evolution by natural selection of agents that replicate.

Why is this important? Well, Simulation Science is incredibly well-suited to studying human-designed systems like global businesses, surfacing mental models and enabling humans to re-design and manipulate these systems to achieve goals -- like making more money.

Before the 21st century, physicists and mathematicians were the 'gods' of science. Think of Newton, Leibniz, Kelvin, Fermi, Einstein. The 21st century 'gods' of 'science' are the biologists, computer scientists, artists and engineers – people who are well-versed in the power and manipulation of emergence (behavior over time) in everyday life. Think of Darwin, Andronov, Forrester, Kauffman.

Why Should I Care About Simulation Science?
2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Warmly,
Justin Lyon

© 2005 Justin Lyon. All Rights Reserved.
Reproduction permitted with reference to author: Justin Lyon.

Why should I care about Simulation Science?

2005-11-21T00:28:00.000Z

As part of Simudyne's focus on the convergence of ABM and SD in Simulation Science, I've been thinking about the linkages between evolution by natural selection (Darwin), agent-based modeling and emergence (Kaufman), the game of life (Conway) and system dynamics (Forrester).

We believe this convergence has tremendous commercial value.

We believe that Simulation Science has finally answered the ultimate 'why' of life.

I would value your feedback.

On p644 of _The Origin of Order_ by Kaufmann, he says that "Evolution is not just 'chance caught on the wing.' It is not just a tinkering of the ad hoc, of bricolage, of contraption. It is emergent order honored and honed by selection." This would seem to be a refutation of evolution by natural selection via the power of self-organization, but it is not. Emergence does not refute evolution by natural selection, nor do I think (assumption here) that is what Kaufmann is saying? Does anyone know his views on this as I'm not that familiar with his thinking?

Dennet argues in _Darwin's Dangerous Idea_ on p226 that Kaufman is saying that "there are principles of order that govern the design process, and that force the tinker's hand. Even a blind tinker will find the forced moves; it doesn't take a rocket scientist, as one says." But, is that what Kaufman is really saying?

In Conway's game of life, we can see the emergence from very simple rules what 'looks' like purposeful movement (gliders, eaters, spaceships and many others in the simulated world) but this emergence is clearly not 'purposeful'. Yet, these simple automata are just like the collection of automata that make up humans and snakes and hawks and doves in the real world.

In biochemistry we have the repair of DNA by 'proteins' or 'enzymes' or 'agents' or 'automata' or 'robots' or 'macros' - choose your jargon. These proteins, like DNA glycosylase and DNA polymerases, follow simple 'rules,' much like cellular automata in the Game of Life, and in following these simple rules they repair large numbers of errors in DNA on a daily basis (something like 20,000 bases are damaged every day in human DNA). And from this (and a huge host of other processes) emerges the complicated process of DNA repair that keeps us alive and kicking and choosing to dance the night happily away or spending a quiet evening alone reading.

Or, consider the 'emergence' in bacteria of stopping tryptophan production (trp) when it 'finds' trp present in the environment (because it can 'eat' trp from the environment). If trp is not present it starts synthesizing it from chorismate. This process is mediated by represession, transcription attenuation and feedback. So, you can have simple rules (synthesize trp when none available in the environment) that emerge into something 'greater' – apparently purposeful bacteria that start producing trp when it finds none to eat. Yet, bacteria are no more purposeful than the 'robots' or 'agent's that make us up as humans. You can model trp production kinetics using a set of differential equations to describe the trp operon behavior over time and solve the equations using the fourth-order Runge-Kutta algorithm. It's been done in Mexico by Moises Santilla´ and published in the Journal of Theoretical Biology. Classic system dynamics.

Or, you can also model enzyme kintetics using agent-based modeling where you decompose the system into 'agents' or 'actors' or 'capsules' (in a rational rose real-time model) – choose your jargon.

Whether you use agent-based modeling or system dynamics does not really matter -- it just depends on the level of emergence that you are interested in studying.

And, interestingly for the manipulation of high-level emergent behavior in human systems like businesses, you can use System Dynamics to model (1) oscillations in supply chains, (2) limits to growth, (3) success to the successful, (4) fixes that fail, and on and on . . .

Does it not seem clear to other people that System Dynamics is a meta-language for describing these 'principles of order' and the appearance of emergence in systems (whether natural or created by humans)?

Are not the 'archetypes' of system dynamics the key to unlocking and describing the seeming 'mystery' or 'magic' of emergence?

That is, is it possible that the 'archetypes' of system dynamics are the 'physics of biology;' the 'meta-engineering' of life through the wonderful, yet blind and simple algorithmic process of evolution by natural selection of agents that replicate?

So, after ~10,000 years have we finally answered the ultimate 'why' of all teleological arguments?

Yup, I think so.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Warmly,
Justin Lyon

Why 2006?

2005-11-04T14:37:00.000Z

I'm getting hammered by people asking me:

What makes you so sure that 2006 will be the year that simulation science tips?

Here's my answer so that people can stop asking me the same question over and over again!!

Short Answer
I've met and interviewed dozens of men and women in the simulation science space from all over the world over the past five years. After all of these meetings, I've used the insights to update my model of the simulation space.

The model tells me that 2006 is the year that this stuff will tip.

For the men and women who doubt the power of simulations, let me pull a quote from Lawrence M. Fisher's recent biographical sketch about Dr. Jay Forrester, the founder of system dynamics.

[Professor Forrester's consulting] assignments often frustrated him.

Executives would listen politely to his presentation, and go on with the same problematic practices. Even at Digital Equipment, managed by his former students, he found system dynamics a tough sell.

'I was never successful in getting the board to believe the models would work,' he says. 'The last time I tried, one of them said, 'We agree that we've been successful following your advice, but it's not because of your modeling. It's just because you're a better manager than we are.'

As Professor Forrester says, 'That excused them from having to pay attention to the source of my insights.'

Still struggling to believe me?

Perhaps you will listen to Jim Sinur from Gartner, the world's leading provider of research and analysis about the global information technology industry. He wrote the following to me on 2 November 2005.

The trend is there based on a survey we did. In 2000, only about 5% of our clients used simulation. In 2004, we did survey that said over 25% were using simulation. Now that some form of simulation/optimization is in nearly every BPA and BPM tool, we expect that the 2006-2007 would likely be the tipping point for most clients (over 50%) using simulation in some form. Is it 2006 (p.6)? 2006-2007 (p.7)?

Business (and life itself) is incredibly complex. Mere mortals like myself must rely on simulations to understand this wonderfully complex and counterintuitive world.

And no, I won't show you the model. It's confidential!

If you want to take the first steps in learning to build simulations, you should purchase an outstanding book on the subject, "The Critical Path", by Dr Kim Warren.

Dr. Warren is a groundbreaking expert in this field, and has been an inspiration and mentor to me as I've embarked on this new business venture.

It's a very short book (you can read it on a trans-Atlantic flight) and it's written to appeal to non-technical managers and executives.

Finally, humans can profoundly deepen their understanding of the world they live in . . . thanks to computers and only with the help of computers. And, that’s an even harder sell. Don't agree? Pop down to your local antique store, buy an abacus or, better yet, grab some yarrow stalks so that you can consult the I Ching and get back to work!

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Warmly,
Justin Lyon

LONG ANSWER FOR THE TIME RICH!
In 2001, when I took 'System Dynamics Foundation: Managing Complexity' with Dr. Jim Hines through MIT's Center for Advanced Education Services, I got a copy of Vensim® PLE to use in the course. I think Dr. Hines is now collaborating with Worchester Polytechnic Institute (WPI) to offer this course at a distance. It's worth the money.

Today, I would use mystrategy® , but I did not know about that software back in 2001.

Since 2001, I've been working on a model to provide myself with foresight into a probable 'tipping point' for simulation science.

I would travel and meet people, take copious notes and then go update my model.

While trekking in Honduras, I kept tweaking and playing with the model (in the hotel of course, it's hard to lug a computer through the jungle!). Bird watching is amazing and, if you get a chance, raft or kayak the Rio Congreal. It has rapids ranging in difficulty from class II to class V and offers something for everyone from the first time rafter to experienced kayak enthusiasts. El Pital to Las Mangas is the best part. Be careful of "Schorshi's Nail,' a nasty part of the river. Udo, one of the best guides down there, and I were rafting along with Schorshi Schauf who tore off his pinky fingernail during the filming of an extreme kayaking expedition. The hole used to be called 'Fools Rush In,' but Udo renamed it in honor of Schorshi's loss! A highly recommended adventure!

After diving the Andaman Sea around Koh Phi Phi, I would sit on the beach and think about the model. The leopard sharks are beautiful and it's so, so tempting to pet them, but don't. It's bad diving form!

In South Africa, while riding horses on safari at Wait a Little, I would think about the model. If you are a rider, take time to visit Wait a Little. It's fun and exhilarating to see elephant and rhino from horseback. If the elephant charges, stand your ground so that you don't teach them that they can mess with humans on horses. If you're lucky, Phillip will let you shoot his pricey elephant gun. It will knock you on your ass if you're not careful. Don't say I didn't warn you! Do me a favor; if you go please tell Philip and Gerti that Justin Lyon sent you. I rode Tolly Rocket and Guinness; both are fun horses. They may have retired or got eaten by lions since they are no longer featured on the web site. Tolly was a bit stubborn, but I worked hard with her to get her to not pull. I'm not that good a rider, so take whatever advice Philip and Gerti give you!

When trekking across Turkey at the start of the 2003 invasion of Iraq, I scribbled dozens of pages of notes and updated the model back in the states. A Wabash College class studying ancient Christian culture went to Turkey on Saturday, 8 March 2003. At the time, I was director of new media at Wabash College, and Todd Vogel was a student at Wabash and incredible photographer. We were following the class up and down the western coast of Turkey and sent back journal entries and photographs.

It was while riding Bingo in Missouri at Meramec Farms that I had a stunning insight that transformed my model. If you go, give Carol a big hug for me.

I've met and interviewed dozens of men and women in the simulation science space from all over the world over the past five years. After my meetings, I update my model.

The model tells me that 2006 is the year that this stuff will tip.

For the men and women who doubt the power of simulations, let me pull a quote from Lawrence M. Fisher's recent biographical sketch about Dr. Jay Forrester, the founder of system dynamics.

[Professor Forrester's consulting] assignments often frustrated him.

Executives would listen politely to his presentation, and go on with the same problematic practices. Even at Digital Equipment, managed by his former students, he found system dynamics a tough sell.

'I was never successful in getting the board to believe the models would work,' he says. 'The last time I tried, one of them said, 'We agree that we've been successful following your advice, but it's not because of your modeling. It's just because you're a better manager than we are.'

As Professor Forrester says, 'That excused them from having to pay attention to the source of my insights.'

The trend is there based on a survey we did. In 2000, only about 5% of our clients used simulation. In 2004, we did survey that said over 25% were using simulation. Now that some form of simulation/optimization is in nearly every BPA and BPM tool, we expect that the 2006-2007 would likely be the tipping point for most clients (over 50%) using simulation in some form. Is it 2006 (p.6)? 2006-2007 (p.7)?

Business (and life itself) is incredibly complex. Mere mortals like myself must rely on simulations to understand this wonderfully complex and counterintuitive world.

And no, I won't show you the model. It's confidential!

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

© 2005 Justin Lyon. All Rights Reserved.
Reproduction permitted with reference to author: Justin Lyon.

FINALLY -- business funded!

2005-10-27T20:30:00.000+01:00

After five years of extensive market research, hard work and trips all over the world, we've secured our first round of funding from an angel!! We'll be launching the business in Europe and the USA in 2006. More information is available for those interested in learning more about our vision: http://www.simudyne.com

Of course, if 100 men or women start a business - 95 will fail, 4 will break-even or make a tiny profit and 1 will become rich beyond your wildest dreams.

I like those odds.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Case studies of simulation projects

2005-10-21T10:45:00.000+01:00

FMCG

Financial Services

Energy

Utilities and Simulations

Teaching & Learning

Pharmaceuticals

Simulations for Pharmaceuticals

Military

Simulations for UK Training Group Defense Agency

Other project examples . . .

What is Simulation Science?

2005-10-20T13:31:00.000+01:00

Simulation Science, in my mental model, is the application of 'linear science' **AND** 'nonlinear science' to solving problems in the real world.

'Linear science' is located within the larger set of 'nonlinear science'.

I hate the phrase 'nonlinear science' as to me it's like calling Zoology the 'study of nonelephant animals.' (thanks go to the mathematician Stanislaw Ulam for this simile).

Nor do I like the phrase 'complexity science' as that makes something easy sound unnecessarily hard. And, 'chaos' is even worse because it implies to the vast majority of people that the business will become frenzied or wild in appearance, when, in fact, management scientists are interested mostly in how a 'chaotic' business system can actually evolve in a way which appears smooth and ordered.

So, I call it 'Simulation Science' instead. Or, just good science.

Simulation Science requires the use of computers and the application of nonlinear techniques (and 'linear' techniques when appropriate) for understanding our complex world so that people can solve real world problems more creatively and efficiently.

By doing so, a new meta science, Simulation Science, emerged in the 1950's that emphasizes multidisciplinary collaboration in pursuit of understanding the common themes that arise in natural, artificial, and social systems. This unique scientific enterprise attempts to uncover the mechanisms that underlie the deep simplicity present in our complex world.

Techniques used within Simulation Science might come from a variety of fields, e.g., regression analysis, agent-based modelling, cognitive neuroscience, network dynamics, brand dynamics, discrete-event simulations, system dynamics, strategy dynamics, fractal mathematics, dynamical systems, chaos, etc. ad nausea depending on the problem being studied.

So, illustratively, S ystem Dynamics is a discipline within the larger set of Simulation Science. And, Strategy Dynamics is a sub-speciality within the discipline of System Dynamics.

Additionaly, I would argue that Biochemistry and Economics are also subsets within the larger Simulation Science set.

That is, people need to understand the real-life problem and then choose the appropriate scientific discipline to analyze it and develop policy. Maybe it's a System Dynamics model, maybe a discrete-event model or maybe some combination of a variety of techniques. Just make sure the scientific technique you are using embraces the facts of complex adaptive systems.

Greater than 90% of all business problems in the world currently being analyzed by the vast majority of consultants, economists, marketers, etc., are almost exclusively analyzed using techniques that paint patently false simulacrums of reality. Executives need to demand more from their analysts than just more black box spreadsheet models that create false security.
Many of these traditional simulacrums (often in the form of highly complex spreadsheet models) include assumptions that violate the most basic of physical laws.

They are more of a hindrance to decision making than a benefit. I argue that analytical reductionism is more often used for improving perceived certainty and reducing perceived risk (leading to the all to often heard lament, "we did a bunch of analysis before it all went wrong, so its not our fault, rather something extrinsic to us caused our failure").

Nothing wrong with doing what you’ve always done other than the technology for applying 'nonlinear science' is available (after decades of refinement) in the form of fast computers, excellent modelling software, solid management science, etc. Today, humans can build evermore robust simulacrums for improving their decision making.

It is cheaper doing simulation science than traditional analysis. And, you get better results.

"Do I get my traditional consultants to answer this question or should I retain a simulation facilitator to help me understand what we need to change about our system to make it a more viable predator in the cut-throat business world?"

It's a no brainer decision . . . Hire the simulation facilitators and give your pricey consultants their walking papers.

Like a good book that has been relentlessly edited over time, simulation models become simpler over time (unlike traditional analysis which gets more complex over time). Over time, the user interface gets more complex and robust, but the underlying simulation models (objects) should get simpler.

Or, the more time I have, the simpler I can make the simulation objects. The complexity of the model arises when you connect a bunch of very simple objects (molecules) together into a larger simulation.

It was *nearly* impossible *before computers* to truly understand the dynamics of businesses, because businesses are complex adaptive systems and it is IMPOSSIBLE for any human being, no matter how clever, to solve high-order, nonlinear, dynamic systems other than in the most 'gut-feel' sort of way by using the most powerful computer on the planet (our brains).

Nothing wrong with that either -- I just think it's easier for people to follow their leaders if they make their mental models explicit in a computer simulation instead of requiring faith in the hidden mental models. Or, even worse, are the consultants who are always forcing us to wade through a morass of complex, boring (and most likely completely wrong) spreadsheet models where the true structure remains hidden in the cells.

Simulation Science insights have diffused slowly over the past fifty years from the natural sciences to the social sciences.

A 2002 citation search compared 5,400 social science journals against the 100 natural science disciplines covered by INSPEC (>4,000 journals) and Web of Science ( >5,700 journals) indexes. It shows keywords comput* and simulat* peak at around 18,500 in natural science, whereas they peak at 250 in economics and around 125 in sociology. For the keyword nonlinear citations peak at 18,000 in natural science, at roughly 180 in economics, and near 40 in sociology.

In the words of the researchers who conducted this study, "How can it be that sciences founded on the mathematical linear determinism of classical physics have moved more quickly toward the use of nonlinear computer models than economics and sociology—where those doing the science are no different from social actors—who are Brownian Motion?"

My answer: It takes time.

So, one of the key challenges I'm facing as I promulgate simulation science insights outside the academic world, is . .

How do I make the CEO realize that the reliability and accuracy of his decision-making can be improved by using simulation science?

I believe that this involves educating managers that it is time to set aside their historical (and erroneous) preconceptions and prejudices of how to manage a business in the 21st century.

Few executives today realize that the complexity of business is genuinely beyond them. And that's not an easy sell.

Finally, humans can profoundly deepen their understanding of the world they live in . . . thanks to computers and only with the help of computers. And, that’s an even harder sell.

Don't agree? Pop down to your local antique store, buy an abacus or, better yet, grab some yarrow stalks so that you can consult the I Ching and get back to work!

Intro to Simulation Science
What is Simulation Science?
2006 - The Tipping Point for Simulation Science
Why will Simulation Science tip in 2006?
Why Should YOU Care About Simulation Science?

Case Studies
Case Studies of Simulation Projects
How Much Do Simulations Cost?
Selling Simulation Science

Advanced Topics in Simulations
Usability and Simulations
Structure, Behavior over Time, and Emergence
On a Hierarchically Decomposed Agent by Dr. Suarez

For Professors and Trainers
Simulations for Management Training and Learning
Why use simulations in training?
Simulations for Corporate Training

© 2005 Justin Lyon. All Rights Reserved.
Reproduction permitted with permission of author: Justin Lyon.
Contact me here: justin1028@yahoo.com

One of the best books on strategy

2005-10-20T00:18:00.000+01:00

You have got to read this book!

More info: http://www.theeschercycle.com/

It's one of the best books I've ever read on creating strategies that make money. It teaches you how to create a business that will evolve into a truly awesome business predator. I cannot recommend it enough!!

If you read Peter Senge's book, The Fifth Discipline, then you will love this book.

"The Escher Cycle" –
Creating Self-Reinforcing Business Advantage

Great companies all share a common trait: they flawlessly execute day-to-day activities while maintaining a clear vision for the future.

The Escher Cycle is the model for achieving that greatness.

Step-by-step the book shows us how to create strategic advantage, by focusing on increasing levels of operational excellence in the key activities that really matter.

The ultimate competitive advantage, he reveals, is not only sustainable but self-reinforcing.

Buy it online at Amazon.com.

FINALLY -- great (and cheap) simulation software!!!

2005-10-19T20:44:00.000+01:00

mystrategy® - simulations for managers - only £65 per user

There is a slick new simulation tool on the market. It's dirt cheap and feature rich. Every manager should buy this business planning tool.

mystrategy® is simple to learn and use, enabling improved visibility and decision making across all levels of management.

If you are interested in making more money with less risk then you will find this simulation software a powerful tool.
If you do business planning on spreadsheets then you will find that this simulation software adds a critical new dimension to your thinking.
mystrategy® was developed for Windows-PCs but also runs well on Apple Macintosh using Virtual PC 7.
mystrategy® is a Registered Trademark of Global Strategy Dynamics Ltd.
The mystrategy® Software is developed under HVR Consulting Services' Quality certification to ISO 9001:2000 and ISO 9000-3 (TickIT)

You can buy it online. The shopping cart is a bit clunky, but if you suffer thru that, then you will get your grubby, little hands on one slick piece of software.

How much do simulations cost?

2005-10-15T10:36:00.000+01:00

Finding this information out has proven to be rather tricky. Simulation companies are pretty tight-lipped organizations. Maybe because of all their ties to military work??

Anyway, it seems that individuals can purchase games (£20-£125), software (£30 - £800) and books (£20-£60). The price range for individuals to purchase simulation software spans a wide and not so clearly understandable range. For example, you can buy mystrategy for £65 and do 80% of your analytical work or you can drop something like $2000 (USD) on buying the same type of software from Powersim? Go figure. Why buy Powersim Studio? Well, two reasons I suppose: (1) you need to create links between SAP-SEM (or BW) and your simulation; or (2) you need to create an enterprise level simulation.

But WAIT...you can use any system dynamics software (vensim, iSee, Powersim, myStrategy) and strip out the equations (think of the equations as a programming language) and compile them into executable code, slap on a slick web interface and BOOM you've got yourself a networked simulation ready to go! HVR has a simulation compiler -- talk to Dr. Dave Exelby -- email me and I'll send you his details.

Off-the-shelf simulations for training are becoming very popular. Most organizations spend between £3,000 - £15,000 licensing simulation games for their internal training programs in strategy, business administration, marketing, finance and others.

Simulation projects completed by HVR Consulting Services and others in the space range from £25,000 two-day working workshops to £2.5 million IT system roll-outs for banks, oil & gas, FMCG and pharmaceutical companies. The average project fee to develop a custom simulation to help management improve their decision making is ~£223,000 (based on analysis of eight companies in the simulation space).

To use three of GSD's simulation games (unlimited, permanent use) would require a £28,350 investment on the part of the organization.

To use all of their simulations (unlimited, permanent use) would require a £73,800 investment.

Pricing and licensing for using simulations in your training are flexible. GSD offers two ways of buying:

Pay as you train - least expensive option for experimenting or trying out with a few students; best option for professors or trainers with limited budgets who must pass the cost on to their students.
Permanent licenses - Most flexible as the licenses do not expire as in the pay as you train model. Best option for a university to purchase and use across many courses to maximize their investment returns.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Unilever

2005-10-03T21:16:00.000+01:00

Unilever is one of the world's leading suppliers of fast moving consumer goods across food, home and personal product categories. Their products are distributed in 30 countries.

We've been doing a lot of thinking about simulations for Unilever and we feel that it could radically transform the way they launch new products. It will help them figure out which marketing initiatives to pursue and when to do them. Why? Partly because of the power of simulation science for capturing insights into the soft and fuzzy -- Is the advertising great or does it suck? Will consumers love our product or just think it's so-so? Will Wal-Mart gives us more shelf space than our competitors? What other brands of ours will we cannibalize and how much? We can simulate a thousand different worlds, identify the most likely and then make it happen.

Through workshops we introduce marketing teams to the power of using simulations for improving their product launches. We can track the impact of consumer need, advertising, share of voice, availability and experience and create extremely accurate scenarios that provide unrivaled foresight.

We can also simulate (easily AND cheaply) supply, economic forces, sales, promotions and competition.

There are several advantages of leveraging the investments that Unilever has already made into SAP by adding a simulation layer to their IT systems:

Using our simulations, Unilever Brand Directors will have foresight into the likely outcomes of marketing initiatives via scenario analysis using the synthetic environment.
Our technologies enable attitude data to be used to inform the strategic decision making process.

Finally, Brand Directors and Finance Directors can stop fighting:

Ms. Finance tells Mr. Brand -- "Hey, these projections are WAY TOO OPTIMISTIC!"
Mr. Brand and Ms. Finance then log into the secure simulation extranet and play a couple of games.
"No, no, no, we don't need to spend $20 million on media, we should use other activation tools such as kick-ass displays and creative trials" says Mr. Brand.

They change the ad spend to $10 million and add $5 million for trials and play the game to see how everything might unfold.

Over the phone (because Ms. Finance is in Germany and Mr. Brand is in Connecticut) they finally agree on a plausible scenario, print out the pro forma P& L (and load it into SAP-SEM to create an audit trail) and part ways happy with their consensus view on a plausible future outcome for this new product.

The project gets the green light and goes swiftly thru the contract gate to the launch gate. They are now only 3 months from product launch.

So what? Well, based on interviews with people around the world, the ROI may reach $500 million over three years. Plus, we're convinced that we can shorten new product launches from an average of eight months to as little as six months.

And, as Ben Franklin said, Time IS Money!!

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Procter & Gamble

2005-10-03T19:46:00.000+01:00

Procter & Gamble is a $38 billion corporation that controls and consumes a great many assets and raw materials, processes them along parallel and intersecting pathways, and produces a large variety of wares that it then distributes all over the world.

In 1998, some senior managers wondered if their "earth-to-earth" supply chain - the long trail of resource allocation, manufacturing, distribution, and customer consumption - might not be streamlined somehow. Even an incremental increase in its overall supply-chain efficiency, they knew, could yield enormous savings and higher profits.

But this was a problem P&G wasn't capable of addressing itself because, paradoxically, it didn't know what its own supply chain was - not conceptually, at least. The company was responsible for it, operated it, oversaw it, and ran it, but didn't understand it on a theoretical level.

Using Simulation Science experts, a team conducted a full study of P&G's supply chain. It was characterized by three major parameters: total inventory in the system; total time in the system; and out-of-stocks on the shelves. Of these, the only one that couldn't be fiddled with was out-of-stocks. Without exception, P&G wanted to have Tide, Comet, and the rest of its product lines on the shelves at all times.

The Simulation Scientists eventually produced five models of the P&G supply chain and ran them on their workstations thousands of times under different settings and conditions, creating a simulation of the business.

A key insight was that many of P&G's problems with their supply chain were a result of their own policy of requiring all shipments to be made in full truckloads only; partial loads weren't permitted. Having your trucks full when they leave the loading dock maximizes their utility and efficiency, leaves no wasted space, saves diesel fuel, reduces air pollution, and minimizes duplication of effort.

Such a requirement makes obvious and intuitive sense, yet it is wrong.

Simulations, however, uncovered that adherence to the full-trucks rule caused disruptions elsewhere in the system. It converted smooth, or laminar, flow into an irregular and jagged shipping stream, creating bottlenecks - and even temporary out-of-stocks - as trucks waited for their cargo holds to be filled. Relaxing the full-trucks requirement would iron out any and all supply-chain kinks.

A profound insight that saved P&G millions. Around $300 million. In the first year.

More information on the SAP web site

Excerpts from Wired Issue 8.06 - June 2000

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Management Training and Learning

2005-10-03T17:02:00.000+01:00

Your organization should consider making a major commitment to using our simulations (microworlds) in your training and educational programs.

You may download free, trial versions of our business simulations for use in courses.

They are designed primarily for use in groups and support participants’ individual and collective learning in a risk free learning environment. They encourage team-building, are rich in materials but not over-complicated, and the messages are clear and intuitive. They are appropriate for distance learning.

Students use our simulations in their undergraduate and post-graduate distance studies at MIT, London Business School, London School of Economics, WPI and hundreds of universities and corporations in over 20 different countries.

These simulations improve understanding of many common business situations. The underlying frameworks are transferable to the challenges facing a great many organizations today.

Mobile Phone Subscribers' allows students to manage a single resource system - the subscriber base for a mobile phone business - to introduce the ideas of accumulation, depletion and capacity limits. It would be interesting to use it for marketing courses or workshops to introduce the basics of customer-acquisition and retention, driven by marketing and limited by service capacity.

Brand Management - a little more complex than Mobile this looks at the situation that arises on the launch of a new brand and includes a challenge for students to complete, with data, before testing their strategy with the simulation. It would be appropriate for marketing courses or workshops to teach the basics of developing both customers (through advertising) and channels (through sales force), working with limited marketing budgets

eBank Service Management- set in the banking industry this is loosely based on the launch of the Egg Savings Bank in the UK. The game explores the need to maintain balance between customer and staff resources. It would be useful for teaching service management – the basics of matching service capacity with rapidly varying workloads driven by customer acquisition and maintenance.

Beefeater Restaurants Microworld focuses on balancing the challenges of expanding a business to satisfy investors whilst maintaining expected product and service standards for customers. I would recommended it for use in general management, strategy, systems thinking or service operations workshops or courses. It demonstrates that growth depends on existing resources, including intangible factors, and depends on winning investor support. It includes a competitor option and six pre-set challenges are included with the game – or create your own challenges for your courses.

Professional Services Microworld - loosely based on McKinsey this microworld explores the staff chain and co-flow of staff experience. We'd recommended it for use in general management, strategy, systems thinking, service operations courses or workshops. It's also been used in legal MBA courses and workshops in professional service firms. It demonstrates how the power of the 'dynamic resource-system view' helps in understanding and managing growth and decay of strategic resources, and how resources combine together to determine long-term performance. Managed well, this consultancy can grow and thrive. Managed badly, it will lurch from crisis to crisis, and ultimately into failure.

Oil Producers' Microworld - a more specialized microworld, this looks at scenario planning in the context of the global oil industry. Based in both Scenario Planning and Systems Thinking the Oil Producers' Microworld may be used in teaching these popular and powerful approaches. At the heart of the Oil Producers’ Microworld is a dynamic simulation model of the global oil industry. Users take the part of the world’s independent oil producers and can experiment with policies that change the future. Users discover the invisible hands that keep supply and demand in balance and meet the political players on the world’s oil stage. They are responsible for approving investment in production capacity and are judged by the long-term success of these decisions. The simulation unfolds in up to 13 pre-selected scenarios.

People Express - gives your students the opportunity manage the People Express company themselves. The simulator functions just as an aircraft simulator does. They will take command of the firm and pilot it from start-up to success – or failure. In each simulated time period they make strategic and operational decisions, and receive feedback from their past decisions.

More here: http://www.strategydynamics.com/jl/

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Criminals, Drugs and Simulations

2005-09-30T19:04:00.000+01:00

Here are two interesting papers that touch on the applicability of simulation science (including agent based modelling and system dynamics) to social science modelling.

The first paper challenges the common belief held by the medical community that illegal drug use is a disease. Instead, the authors argue that illegal drug use is better understood thru a 'marketing' lens. That is, results of the analysis suggest the drug epidemics can be better understood as diffusion of a commodity rather than as infection by a disease, the view of the medically dominated substance abuse field. This has important policy implications.

The second paper describes the combination of System Dynamics modelling (Aggregated "super agents") and Agent-Based Modelling. The result of this work was the development of a hybrid model that combines a simple system dynamics approach with an agent-based model. The distinctive approach used in this work integrated modeling with practical ways of enabling people to engage in strategic policymaking, while taking into account the complexities of the criminal justice system. The agent-based framework developed to meet these needs models the criminal justice system, provides the ability to assess policy across the system, and allows sharing of model output to improve cooperative efforts among departments.

Agar, M., Guerin, S., Holmes, R., Kunkle, D., (2004). Epidemiology or Marketing? The Paradigm-Busting Use of Complexity and Ethnography. In: Proceedings of Agent 2004: Challenges in Social Simulation

Boyle, S., Guerin, S., Pratt, J., and Kunkle, D.
(2003). Application of agent-based simulation to policy appraisal in the criminal justice system in England and Wales. In: Proceedings of Agent 2003: Challenges in Social Simulation

Both are available here:
http://www.redfish.com/research.htm

Simulations for Professional Services

2005-09-29T18:49:00.001+01:00

A large London based institution had traditionally focussed exclusively on financial performance metrics, but was concerned about the sustainability of its business in an increasingly competitive environment. Its track record proved to be founded on a combination of strong reputation amongst clients, and a robust culture amongst its professional staff. By instituting a regular process of monitoring the health of these soft indicators, and the factors driving them, the organisation was able to define a strategy and policies to sustain its strong business performance into the future.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Financial Services

2005-09-29T18:49:00.000+01:00

A major international retail bank making the transition from branch-only to branch and Internet service delivery, identified a strong connection between perceptions of service quality and customer acquisition and loss rates. This perception, in turn, was traced to accumulated incidences of good or poor service experienced by consumers. A system for tracking these soft metrics provided critical leading indicators for business performance.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Utilities

2005-09-29T18:48:00.000+01:00

A UK water utility facing a new domestic product launch used simulations to develop a launch plan. The viability of the entire project was tested on this basis, using estimation of the resources required to achieve the required growth in customers.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for CRM

2005-09-29T18:47:00.000+01:00

A consumer data provision company wanted to understand how to segment and change customer purchasing decisions. This company used our simulations to map out its customers and determine how their buying patterns were changing over time and how they could intervene to capture more customer business.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Financial Services

2005-09-29T18:45:00.000+01:00

A small consumer service brokering business wanted to understand better how its cash reserves would fair in a heavily seasonal market. Using our simulation technology, we established that there was a critical balance between expending on developing the service supply as well as developing customers. The previously market driven strategy had to be amended to defeat competition who were depleting the availability of services: cash reserves were far more threatened and more funding had to be sought using the same dynamic arguments.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Education

2005-09-26T18:41:00.000+01:00

A world-class top 10 Business School was running a prestigious international programme and needed a fresh approach to introducing managers to strategic implementation. We helped design a short programme that contrasted traditional problem analysis with thinking about how the fundamental resources of a business are built up and depleted over time. We wrote and developed a new case study to illustrate the points and built a complementary simulation that the participants could use to explore the principles in their own time. The programme now runs biennially.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Pharmaceuticals

2005-09-25T18:44:00.000+01:00

A large global pharmaceuticals company wanted to understand better the effect of above and below the line advertising on sales of two drugs, one at 5% market share and static, and the other at 35% share and growing. Our work showed that below the line support in the low market share chronic market was entirely uneconomic (they should axe or reallocate entire field forces) and that further investment in promoting the larger share product would be wasted.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Military Simulations for TGDA

2005-09-23T21:34:00.000+01:00

According to their web site, the Training Group Defense Agency in the United Kingdom operates a fleet of more than 400 aircraft and employs 5900 military and civilian personnel; it has an asset base of nearly £850M and its cash spend during Financial year 02/03 will be around £700 Million. They recruit Royal Air Force personnel and provide flying training to the Royal Air Force, Royal Navy and Army personnel.

Pilots required to execute a dangerous move in combat will train for hours in a simulation before ever trying it in real life. Today, business executives can practice in a simulation of their business before doing it in real life.

Developing simulations is neither expensive nor terribly time-consuming if you use an iterative and evolutionary approach as HVR Consulting Services advocates. Drop me an email (justin1028@yahoo.com) if you want to learn more about their approaches.

Two very bright simulation scientists have done amazing work with the United Kingdom's military. They developed extremely serious military simulations that match Professor Kim Warren's ideas for developing strategic simulators.

You can buy his books and software for creating simulations online.

Let's explore one of the simulations done for the TGDA.

Training nearly 6000 people to fly or maintain over 400 very expensive aircraft is complicated.

Beginning pilots can only fly during good weather, so you need to be able to account for changes in the seasons so that up-and-coming Top Gunners can practice flying in good weather so they don't crash a several million pound aircraft.

And, there are only so many instructors qualified to train pilots, so you've got to make sure that you keep a proper instructor to student ratio.

Then, of course, there are many bases to deal with - something like 32 bases scattered around the UK are responsible for training pilots.

Training pilots is a complex process where, if you screw up, well, bluntly, you could end up with too few pilots in 2015 to fight a war and win. Commanders prefer winning, because losing means people die. Business leaders make stressful decisions that can make or lose millions; Commanders make stressful decisions that can save or kill hundreds or thousands of people.
War is not a game, but the military are big users of simulation games to practice before they send young men and women into danger.

TGDA developed a simulation used by all bases in the United Kingdom that allows them holistically plan and stick resources like instructors, aircraft and operational personnel at the right base, at the right time for their particular training - whether it's a fast jet, a helicopter or multi-engine aircraft.

Why is a simulation of TGDA's training pipeline necessary? It allows them to forecast more accurately and quickly run scenarios in a synthetic environment where, if you screw up, your pilot does not crash an expensive plane and die. It's really just that simple.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Chemicals

2005-09-23T18:44:00.000+01:00

A global inorganic chemicals company suddenly found that through acquisitions, it had become the No.3 player in the world but it had no investment strategy to reach No.1 spot. This study has already pointed out the consequences of continuing current policies with the probable advent of a "cliff edge" in product standards, leaving the business with about 50% of current revenues.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulation for Manufacturers

2005-09-22T18:43:00.000+01:00

A major European manufacturers association invited us to facilitate their 5-yearly joint strategy meetings. There were challenging issues that had to be addressed: growing competition from Eastern Europe and the Far East and increased pressure on environmental standards from lobby groups and both national and European parliaments. We helped the Chief Executives of 10 major companies build the resource picture of their industry, which allowed them to see as a whole how the climate was changing and where their collective action could change things for the common good. Each individual could see the collective view and air interest in a rational and fact-based manner, which proved a highly successful basis for planning priorities and funding for joint action for the following five years.

Simulations for Software Firms

2005-09-21T23:40:00.000+01:00

A large dominant software and services company developing mobile technologies became worried about the potential threat from a company in another industry. Convergence of third generation mobile technologies will throw these formally non-competing firms into the same operating environment and there is a race for standards, which will result in ultimate control of the vast worldwide market. Our work showed that the competitor was indeed a serious threat, despite being smaller and less well funded, and demonstrated under what circumstances the market could be taken away from our client. The client has, as a result, established a pre-emptive attack plan to crush any gain by the aspirant rival.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Brand Management

2005-09-20T18:39:00.000+01:00

A major worldwide provider of business services wanted to develop much more strongly its use of consumer brands. Traditionally focussed on a "cost plus" business model, the challenge was to take its global managers’ thinking forward to embrace the "business brands" model at the heart of the growth strategy. We helped in shifting the mental model of key business directors and managers by building Strategy Dynamics into a tailored introduction to meeting consumer (as opposed to customer) needs. The programme was interwoven seamlessly in the explanation of corporate strategy but gave managers the framework on which to hang the concepts and initiatives with which they were being presented.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulations for Corporate Training

2005-09-18T18:42:00.000+01:00

A world-class strategy consulting firm runs an internal MBA programme for large numbers of new consultants at PhD level who join without having been to business school. We are asked to design the strategy module. We used our approach as the "glue" at the end of the intensive 3 week course that bound together all the elements the had been presented, from organisational behaviour and marketing to finance and economics. Teaching strategy to the strategists is both an honour and a challenge but the strategy module proved a highly successful and popular element in their core methodology.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Simulation for Financial Services

2005-09-18T18:37:00.000+01:00

A major European Insurance and Fund Management Company wanted to instigate a programme of cost cutting in the light of stock market collapse and consequent earnings reduction. After briefing the CEO and board members on our approach we worked with a team of 20 managers to identify the business architecture. By establishing the true profit model of the business, the team was able to find the best places to seek costs savings without damaging the fundamental ability of the company to earn cash: in other words, we helped them ensure they were cutting out fat, not slicing into muscle and bone. Moreover, we helped the management team and board see that by cutting certain business areas altogether, they could create not only a leaner business but also a healthier one with greater potential in a market upswing. In short, the approach helped them subtly remodel the business for future success.

Selling Simulation Science and System Dynamics

2005-09-18T15:37:00.000+01:00

It is a difficult challenge to sell and market simulation products. As a sales agent for several simulation firms, I thought I’d share some of my thinking.

I'd love to get feedback from the community.

When we’re meeting with executives, we try to focus on the challenges they are facing. It might be a desire to improve the output of an oil field or to cut operational costs in a bank by closing branches or to optimise marketing spending across a portfolio of brands.

In many cases (if not all), we're looking to release cash for the owners of the business through coordinated and integrated action across the enterprise.

On behalf of HVR Consulting Services, Global Strategy Dynamics, SDS and my other clients, I then explain that Simulation Science helps corporations:

Optimise strategic planning;
Optimise key processes across the extended enterprise so that the whole is greater than the sum of the parts;
Optimise the management of people to increase efficiency and generate more cash for the owners of the business; and
Optimise leadership by equipping them with the simulation technologies and management science that enables them to create self-reinforcing business advantage.

Fair enough, they might reply, but everyone promises that! And, here is where the "all models are wrong, some are useful" angle comes in.

Selling simulation science involves:

Connecting with people in the account;
Convincing them of your value via sales tactics;
Converting them into paying clients and
Building up and Retaining their loyalty.

Typically, I find myself talking to three types of people in an account:

Executives and managers
Analytical specialists
Consultants and other influencers

Executives are not really that interested in discussions on the models other than being convinced that the dollars spent developing them will make a substantial return on the investment for the owners.

That is, executives and managers are charged with releasing cash for the owners of the business using any and all appropriate techniques.

Analytical specialists, consultants and other influencers are expected to debate and agree on the appropriate techniques to help executives accomplish that primary goal. That is, they are expected to understand why models are wrong, yet useful to helping executives manage the business.

Many models are rather poor (useless) and some are better (useful).

You can use a variety of techniques to create models. The key is then to quantify the usefulness of the model.

Techniques in the Simulation Science space are particularly good at generating large returns on modest investments (often less than £3 million).

Even more profitable are the System Dynamics' case studies.

Over the past forty years, an amazing body of evidence (a stock) has been built up regarding the success of system dynamics' models to solving complex problems.

My clients alone have over 85 detailed case studies on applying system dynamics to solving complex problems.

By choosing appropriate past projects and discussing them in some detail on how they generated their substantial returns, we usually find it possible to overcome prospects’ consequence issues relating to their investments in simulation technologies. The returns on simulation investments are usually so large that it is a 'no brainer' decision to move forward with our solutions. (These case studies are available upon request.)

Obviously, this is only part of the picture when handling major account sales strategy, but it seems clear to me that this community's techniques usually generate a positive return on the investment.

As John Sterman said when he accepted the 2002 Forrester prize:

"What prevents us from overcoming policy resistance is not a lack of resources, technical knowledge, or a genuine commitment to change. What thwarts us is our lack of a meaningful systems thinking capability. That capability requires, but is much more than, the ability to understand complexity, to understand stocks and flows, feedback, and time delays. It requires, but is much more than, the use of formal models and simulations. It requires an unswerving commitment to the highest standards, the rigorous application of the scientific method, and the inquiry skills we need to expose our hidden assumptions and biases. It requires that we listen with respect and empathy to others. It requires the curiosity to keep asking those 'why' questions. It requires the humility we need to learn and the courage we need to lead, though all our maps are wrong. That is the real purpose of system dynamics: To create the future we truly desire--not just in the here and now, but globally and for the long term."

Simulations for Goverments

2005-09-08T18:50:00.000+01:00

A key government agency mandated with the task of integrating all government web activity needed a business case for increased investment in government Internet facilities. We developed a case based on the dynamic growth in demand for such services and the consequences of failing to support such initiatives.

2006 - The Tipping Point for Simulation Science.

2005-08-27T04:12:00.000+01:00

For the past fifty years or so, Simulation Science has been extremely niche. That is going to change. We are at the tipping point for Simulation Science.

The seeds of simulation science were sown in the 1940's and 50's. Pioneers such as Noel Wiener, A. Rosenblueth, J. Bigelow, J. Von Neuman, M. Mead, W. McCulloch, W. Pitts, J. Lettvin, L. Von Bertalanfy, J. Rachewsky and A. Rappaport spawned scientific theories and numerous innovations including cybernetics, data processing, controls, servomechanisms, bionics, industrial robots, and artificial intelligence. By the early 1960's, the advent of computers provided visionaries such as Jay Forrester with the tools to unlock the mysteries of complex systems. Over the next three decades, Donella Meadows and Peter Senge popularized insights from system studies. In the late 1990's, John Sterman and Kim Warren codified simulation insights into practical management science.

System Dynamics and complexity science has rightfully remained niche because the people who pioneered the field are excellent scientists and since the 1970's have cautioned people from making too bold claims. I've heard this from Jay Forrester and others within MIT at dinner conversations and during SD conference meetings. Since the 70’s it seems like the SD community motto has been: Better to under promise and over deliver than the other way around as Artificial Intelligence discovered in the 1980s.

Always remember that System Dynamics (a subset within the Simulation Science space which is made up of other techniques such as agent-based modelling, discrete-event simulations, etc.) was seasoned in the controversy of The Limits to Growth and this experience impacted many of the early pioneers of the ideas. Good progress on the uptake of system thinking was built up by Peter Senge in the 90's with The Fifth Discipline. This spawned a movement in system thinking, but did not truly enable it in practice because the technology of the 1990's was too immature (although almost ready) for widespread adoption of simulation development. It’s also the start of a schism between people who think you can learn systems thinking skills without developing or interacting with simulations of reality and those who don’t.

I believe that the simulation technology of the 80-90’s was too hard to use for simulations to be easily developed, so Senge and other proponents removed the need for simulation and tried to promulgate the insights that came out of simulation studies. They wanted to let people in on the secrets of system insights, without burdening them with the mathematics of creating simulations or even the experience of interacting with business simulations.

But, system insights are often hard to swallow and counter-intuitive -so managers really struggle to put into practice the strategies and tactics that simulation studies imply would be the most beneficial to the organization over the long-term. This slowed the uptake of Systems Thinking (which to many people seems like new age crap).

Today, simulation technology, riding many of the past two decades of technology trends, is finally mature enough for widespread adoption as an intergral part of a company’s IT and financial systems.

Simulation Science is the bridge between the management science of executives and strategists and the data-dominated world of technologists and operations people.
It is only with Simulation Science that companies can turn their terabytes of data into meaningful information that provides foresight into the future.
Only Simulation Science shows the causal relationships that drive business success (or failure).
You make more money with less risk.

Now is the time for Simulation Science to finally explode from being niche to being really big and important in the management of businesses. Why?

Over the past five years, I’ve interviewed many people in the Simulation Space. Let me recap as it’s important to why I believe I’ve got a unique perspective on the space.

I started my first company in 1994. It was an interactive agency. We built web sites. I created a biochemistry web site (the first on Yahoo!) and it got noticed by PC Computing and OMNI in 1995. It seemed to me then that the Internet was at a 'tipping point' after a long, slow incubation period and would experience rapid growth.

I was right. Growth was almost too fast to imagine. I read every business book I could find (I was 22 at the time) and it was not till I read Peter Senge's book, The Fifth Discipline, that I read anything that made sense to me. The diagrams and behavior over time graphs reminded me of my studies on enzymatic pathways while getting my B.S. in Biochemistry while investigating the molecular basis of pollen recognition.

After reading the book, I completely reorganized my businesses processes after understanding the system insights of Peter. It was my hope they would unleash my company's potential.

I happily sold the business in 1998 for 15 times my original capital investment.

In 1999, my friend Theron Gore and I spent many hours by the Eagle River in Vail, Colorado discussing simulation science. He had worked on a major simulation training project while at Anderson Consulting for a big retailer using an old version of Powersim in the early 1990’s. Theron worked on the project and he and I spent quite a bit of time over a period of two years talking about it and how simulation could be enhanced using interactive technologies like we were using on intranet projects while with Agency.com and later at Hawkeye FFwd. We loved the idea of developing really cool interfaces to intelligent simulation models.

Ever played The Sims – the video game? Its earliest origins were in a System Dynamics model. Hard to tell that now when you play it – and that’s how it should be!

Then I took two classes at MIT in System Dynamics and learned about some amazing success stories from Dr. Jim Hines and Dr. Kim Warren. I travelled to three SD conferences over five years gathering contacts and intelligence (always remaining mostly on the outskirts and quiet as I was in learning mode).

I met with people at the UN in the Secretary-General’s office and UNOCHA (Dr. John Clarke) and discussed the successes (and many failures of acceptance) of simulation in the UN through their World models and other projects. I had many interesting discussions with lots of different people throughout the agency. In collaboration with Kim and Suresh Mistry of SDS, we looked at issues ranging from the conflict in Sierra Leone to the rise of radical Islamists in Afghanistan. Interestingly, the CIA was very interested in Kim and Suresh’s work on Sierra Leone. Who knows what they are doing with simulation?

In Guatemala and Honduras I met with officials and people promulgating simulation science in Central America. There is amazing work being done in simulation and system thinking in Columbia.

Similar interesting examples can be found in Africa, Indonesia, Thailand, Hong Kong, Japan, Portugal, the United States, the United Kingdom and many other countries. Whenever possible, I fly to meet with people in the simulation space and pick their brains.

I even did a workshop with some managers in Arkansas on the application of simulation science to the management of their manufacturing company. That was the epiphany . . . if executives of a $50 million manufacturing company in rural America can see the potential of simulation science and are willing to invest $15,000 just to learn more about it, then I knew this was going to be absolutely huge.

So, while in the ivory tower of academia at Wabash College, I kept deepening my relationship with Kim (who I believe is a management guru on par with Michael Porter and with far more broad appeal than Peter Senge) and monitored the space.

It’s through my relationship with Kim that I learned of many successful stories of the application of Strategy Dynamics to management challenges. It’s truly amazing and easy to do stuff (if you’ve got the right training).

In two months of work, Kim’s approach can uncover the heart of a problem and lead management to a consensus where more traditional approaches fail. HVR can then take this work and in the same two months, build a rich simulation environment that allows the executive to test out different strategies and tactics.

It is Christina Spencer (at GSD) and Dr. Kim Warren (at SDS) who opened my eyes to the potential of bespoke simulation development and its role in general training.

It was only a matter of time before the technology matured to allow companies to quickly create simulations of their businesses for use in real-time decision making.

Pilots required to execute a dangerous move in combat will train for hours in a simulation before ever trying it in real life. Today, executives can practice in a simulation of their business before doing it in real life.

Developing simulations is neither expensive nor terribly time-consuming if you use an iterative and evolutionary approach as HVR Consulting Services advocates.

Neil Douglas and Michael Georgokopolus have done amazing work with the United Kingdom's military. They developed user interfaces that match Kim’s idea of a strategic architecture for the Military Flight Training System (MFTS), a pharmaceutical firm, Unilever, and for consultancies. It turns out that this type of visual display works well on whiteboards and that this can be easily transferred to a simulation model.

This idea of Kim’s, to use his architectures as management interfaces to simulations of businesses, has been put into practice by HVR and others on a number of military and commercial projects. For example, the Ministry of Defence's simulation of the entire training pipeline for the military flight systems is awesome. It’s really amazing to see it in action. Without it, who knows if the UK would have enough pilots in 2020 to wage an effective war? Bases all over the UK use simulations to manage both strategic and day-to-day decision making.

I interviewed Powersim Norway (a separate company from Powersim UK) and Powersim USA (another different company) and learned about their projects. Once again, many successes and some right spectacular failures. Through correspondence and conversations with Magne Myrtveit, Steiner Moen, Janecke Pemmer, Tone Haveland and Knut Vavik, I learned about the 21st century future of simulation and the ideas of SAP and Statoil in bringing simulation to the oil and gas industry. Both invested big and I mean really BIG in simulation technologies in the mid 1990's.

Since 1984, a dedicated group of Norwegians have consistently created innovations in the simulation world -- compiling equations into executable code, creating object-oriented components to power simulations, pioneering user interface development environments and the weaving of uncertainty and optimization algorithms into the simulation engine.

From the Powersim group of companies from around the world, I learned of case studies for UK MoD (multiple agencies), Training Group Defense Agency, Directorate of Army Personnel, dstl, Statoil, McDonalds, Nestle, Microsoft, Ford, Boeing, and many others.

Richard Stevenson at Cognitus and once a reseller of iThink by High Performance Systems (now iSee), also provides strong case studies: BP Amoco and BP Exploration's oil field planning; UK National Health Service (NHS) simulations to align health care and social policy in delayed discharge; supply chain development for 30 global products at an International Agrochemicals Group; simulations of the UK meat supply chain for a Major Fast Food Retailer; simulations of pricing dynamics of chemical compounds for an International Chemical Manufacturer; simulations of the market dynamics of the 3G mobile telecom technology; life cycle of direct sales simulation of insurance products for an Insurance company; simulations for Heathrow airport air traffic control, supporting business excellence projects at an International Banking Group; simulation of the value impact of product strategies on the customer base of a National Banking Group; North Sea field valuation simulations and asset management simulations for a Utility Company.

Through my relationship with Kim at GSD & SDS, Lars Finskud at Vanguard, David Exelby and Mirek Gliniecki at HVR and Alex Tregellas at Deltera Systems I’ve learned of and documented simulation studies for the UK MoD (multiple agencies), the US Department of Defense, Sandia Labs, US Department of Homeland Security, British Gas, BP, Barclays, and several other companies.

Nine times out of ten, simulation systems were successes and when simulation recommendations were ignored, management learned over time that they should have followed the advice; many proved expensive lessons.

Conversations with Shane Kite, one of the founders of Lanner Witness, a discrete event simulation tool, uncovered the intrigues, failures and successes of that part of the simulation world. You can add another two dozen or so amazing case studies of Simulation Science in action from the discrete space.

For example, the simulation of the Ras Laffan Port in Qatar to help ensure it increases its total LNG exports from 12.6 million tonnes per annum to around 27 million tonnes per annum by 2008. Vertex's service levels increased by a staggering 49% after a simulation system project. Numerous projects in the application of simulation science to analyzing Floating Production, Storage and Offloading Vessels (FPSO's), onshore fields and onshore receiving terminals have been completed. Shell's ADGENT simulation models producer and receiving terminals, shipping logistics and shipping delivery programs for both liquid natural gas (LNG) and crude oil; in one year the simulation tool has returned nearly $100 million. Even in the oil business, $100 million is not pocket change.

Simulation is powerful and necessary stuff. I view discrete-event simulation as another subset of Simulation Science. Shane now has his own business, Saker Solutions, and is helping me understand the web of connections and contacts within the discrete-event world. Much like Powersim, Lanner Witness has a track record of both successes and failures.

A literature search of the use of nonlinear techniques in the social sciences is barren when compared to the use of nonlinear approaches in the natural sciences. This is weird because nonlinear approaches are well suited to social systems that are not reducible to mechanistic thinking, who are Brownian motion!

Conclusion: After five years travelling the world, interviewing dozens of people in the simulation space and reviewing case studies going back to the earliest days of simulation (both continuous and discrete), I believe that to sell simulation science we only need to promote our successes, explain the learning from our failures, and provide companies with a clear plan for incorporating simulation technologies into their IT systems.
That is, Simulation Science faces a sales and marketing challenge plain and simple and that’s why I’m here!

Thoughts?

Simulations for Telecommunications

2005-08-22T15:21:00.000+01:00

Simulation Science specialists work with clients to build a custom simulation of the problem being studied to assist decision-makers in seeing the complexity of the situation so they can 'rise' above it and focus on activities that benefit the entire company.

For example, we might for a telecom build a simulation tool that enables the future performance of the company to be estimated based on the implementation of different Customer Management strategies.

We would pull together the resources to support:

A process to gain a shared understanding of the drivers, issues and potential options
A simulation that can quantify and trade off competing options

Customer Management strategies will impact on the telecom's performance as measured by KPIs. However the KPIs should not be viewed as independent.

Customer Management strategies are implemented in a complex environment where the impact may not be immediate, and may have counterintuitive effects (whether positive or negative) elsewhere within the customer management system.

In order to asses the effectiveness of different strategies the telecom would need to understand the influence that different strategies will have on performance over time.

We roll-out real-time simulation systems on a per-seat user licensing structure. As the scope of the simulation grows (and the need to share parts of the interface and dashboards with larger numbers of people) it creates a need for granting users access to parts of the simulation. Linkages into SAP Strategic Enterprise Module (SEM)/Business Wharehouse (BW), online analytical processing (OLAP) servers like Hyperion EssBase, or other data wharehousing technologies through an enterprise architecture layer ensures the system is continually fed real-time data.

Here's an example...an advertising agency comes up with an idea for a loyalty campaign. They are allowed access thru their client to the telecom's simulated business environment. The loyalty program idea and the assumptions driving the idea are inputed by the marketing managers and a team of ad agency professionals and others within the telecom into the simulated business for testing.

They note the impact of the campaign on building awareness and moving people from a 'Fickle' customer resource-stock to a 'Loyal' customer resource stock. The simulation provides foresight into plausible future scenarios. They are noted, the project is aligned with other activities and approved.

Early campaign results results are compared against the simulated scenarios to see if we see a trajectory for our business that might match. As the campaign unfolds, key flows are watched as early indicators for possible problems: is the loyalty program achieving its target objectives?

Over time, the activities are continually analyzed by simulation experts to ensure that the model boundaries don't expand too much beyond what it's designed to address. Yet, the model can also evolve and thru iterative development become more robust as a decision aid. It can expand intelligently and give managers the ability to see the forest and the trees thru an understanding of the underlying structures of their complex business.

© Justin Lyon. 2005– Present. Reproduction permitted with reference to source.

2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?

Why use simulations in training?

2005-08-13T19:13:00.000+01:00

Simulations are useful educational tools to better understanding businesses as complex systems. I'd like to see 50 major universities and 100 top corporations in the UK using them in their business administration, marketing and strategy courses and training. Our simulations are alread used for training within many corporations.

Corporations not using simulations in their training are losing out on an opportunity to make more money, evermore efficiently.

Even more interesting are the companies that are developing custom simulations to assist in their strategic planning. Companies like BP, Roche, Wyeth, Scottish Power, British Gas and militaries like the MoD and US DoD.

Simulations help people learn (as the United States Blue Team learned painfully during the Millenium War Gaming Challenge as reviewed in the book Blink), but you cannot rely on them to tell you what to do. 'Paralysis-by-analysis' in simulation projects is as dangerous to business success as 'knee-jerk' management!

Simulations provide learning and foresight into plausible futures. They are not 'black boxes' that spit out the right answers. Rather, they are 'glass box' management tools for future planning, optimizing business processes, managing people and automating the analysis of data.

Management must always balance the 'magic' of management (the qualititative art of managment) against the need for explicit decision-making (the quantitative science of simulation).

It's a tricky balancing act. Simulations make executive leadership easier.

Simulation Science

Jump into Learning about Simulation Science

How Modern Software Methodologies and High Performance Computing will Change the Face of Simulation

Notes on AnyLogic 5.5

NetLogo vs. AnyLogic

Creative Learning Exchange

Video Games - Are they good for you?

Operations Everything

Modeling General Motors

Emergence in the Networkcentric Warfare Model for US Navy

Simulation at John Deere

The Cambrian Age of Economics

McDonald's and Simulation Satire

Economics and Simulation - Complementary not Competitive!

Reductionism Nightmare

Computer Experiments

Simulation Screen Shots

Gaming Reality

Jamaica and Simulation

Synergy and Complexity Science

Simulation Experiments & Efficient Designs

George P. Richardson's System Dynamics Papers

Social Network Analysis for Business

Market Trends are Driving Adoption of Simulation Science

Who is Simudyne?

Systems Failure - Why Governments Must Learn to Think Differently

Want to find out if you should open that ice factory in Anchorage?

Barriers to Adoption of Simulation Science

Audi Q7 and Simulation

Global Roadshow

Your Invited!

Selling Simulation to Senator John Edwards

Making Money

Usability and Simulations

On a Hierarchically Decomposed Agent by Dr. Suarez

Simulations for Marketing

The Crtical Path - Simulation and Management Science

Structure, Behavior over Time, and Emergence

Why should I care about Simulation Science?

Why 2006?

FINALLY -- business funded!

Case studies of simulation projects

What is Simulation Science?

One of the best books on strategy

FINALLY -- great (and cheap) simulation software!!!

How much do simulations cost?

Simulations for Unilever

Simulations for Procter & Gamble

Simulations for Management Training and Learning

Criminals, Drugs and Simulations

Simulations for Professional Services

Simulations for Financial Services

Simulations for Utilities

Simulations for CRM

Simulations for Financial Services

Simulations for Education

Simulations for Pharmaceuticals

Military Simulations for TGDA

Simulations for Chemicals

Simulation for Manufacturers

Simulations for Software Firms

Simulations for Brand Management

Simulations for Corporate Training

Simulation for Financial Services

Selling Simulation Science and System Dynamics

Simulations for Goverments

2006 - The Tipping Point for Simulation Science.

Simulations for Telecommunications

Why use simulations in training?

How Modern Software Methodologies and High Performance  Computing will Change the Face of Simulation