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Modeling Assignment ITEM New Product Development
Kickoff meeting February 6th, 2014 !Dr.ir. Bob Walrave !
02/04/13 !2
Agenda
Introduction to assignment: Modeling New Product Development
Brief introduction to system dynamics Structure of the assignment
Deliverables & Report Structure of the instructions For the next time Questions
02/04/13
Modeling New Product Development
The full assignment (incl. schedule & deadlines) is available on http://www.bobwalrave.com
Please read this document carefully! If there are any questions:
!3
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Modeling New Product Development
Product development time is an important determinant of new product profitability
Yet, all kinds of difficult decisions have to be made with respect new products: Specifications Performance Development costs
This makes making profit maximising decisions very difficult
This is especially the case is the development project is running behind schedule (or competition is ahead)
!4
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Modeling New Product Development
NPD project often run behind schedule: NPD entails uncertainty and complexity - and workload
is almost always underestimated Team size - and productivity - if often overestimated
! This is the situation which you are going to
investigate
!5
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Modeling New Product Development
The goal of the assignment is to model a NPD process and develop recommendation on how to improve matters: You act as a consultant for this firm Can you come up with smart policies for NPD projects? What is the best team composition? What is the best markting strategy? etc.
It is your task to advice the CEO of company X on how to maximize his profits!
However, we will take one step at the time...
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02/04/13 !7
What is a system dynamics model?
System Dynamics is a modeling method or tool, to build computer simulations of complex systems, and to use these simulations to understand the structure and behavior of systems, and to design more effective policies.
02/04/13 !8
To disclose possible side-effects we need to look at the bigger picture...
rope?snake?
pilates balancing ball?
02/04/13
Why do we need Systems Thinking & System Dynamics Modeling?
Because solving real-world problems is so hard! Look at the different factors that are described in the
model assignment. Combined, they can already create such a dynamic complexity that is extremely difficult to comprehend
!9
Unanticipated side-effects of solutions may aggravate problems
Counterintuitive: Things work out differently than you expected
System Dynamics introduction
02/04/13 !10
Policy Resistance
System Dynamics (systems thinking) is about creating an understanding of the workings of the most important feedbacks within a system Delays Feedback loops Non-linear effects
! These factors cause for policy resistance
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PAGE 8
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Intermediair, July 30, 2009
"the bigger picture"
System Dynamics of the "Moving Sidewalk"
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System Dynamics Models are different than other simulation methods
Human decisions and behavior are explicitly modeled. Models include, besides numerical data, also a high
number of soft, hard-to-quantify factors: work pressure, product quality, market image, customer satisfaction, trust.
In operation research simulation methods, these variables are often omitted, because they are so difficult to quantify.
"To omit such variables is equivalent to saying they have zero effect probably the only value that is known to be wrong!" (Forrester, 1961, pp. 57)
02/04/13
Structure of the assignment
See http://www.bobwalrave.com > 1. CLD (graphical representation of the problem which
caputures the dynamics involved) 2. Stocks and Flows diagram (mathmatical
representation of the CLD) 3. Determine equations 4. Design scenarios to investigate the situation 5. Test robustness of your results 6. Intervention study
!13
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Structure of the instructions
Week 1: Kick off meeting Week 2: Causal loop diagramming Week 3: Vensim simulation software Week 4 -7: Group Q&A sessions
! NOTE: In order to participate in the group Q&A
session, registration is required see http://www.bobwalrave.com
02/04/13
For the next time:
For this week: See if you can find some information on Causal Loop
Diagramming Try to capture the problem in dynamics terms Identify the most important feedback loops
Next week: Introduction to Systems Thinking and Causal Loop Diagramming
In two weeks: Introduction to modeling with Vensim Download Vensim PLE So also bring your laptop (with Vensim installed)
02/04/13 !16
Questions?