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Chapter 2:

System Dynamics in Action

1991 sales
$38 million profit
$1.4 million after tax profit
Largest U.S chemical manufacturer
Benchmarking study revealed apparent
paradox: du pont spend more on maintenance
than industry leaders but less for it.
The mental models found the results of the
benchmarking study to be counterintuitive.
How could du pont spending more and getting
Suggestive ideas of reasons:
Difficult competitive environment, since
there is only little product differentiation for
commodity feedstock, so other dimensions
like cost and delivery reliability are challenged.
Severe energy crises wreaked havoc with input
and operating cost.
Environmental concerns and regulation were
Wilson ledet as the manager knew all this as
he lived 25 years with du pont.
The problems are not in the outside pressure
the company had faced, but in its response to
those pressures. Internal aspects.

Proposed plan:
Explore the ways in which different parts of
the maintenance system interacted.
Explain why past attempts to improve had
Assist in the design of new polices.
Explain the complex dynamics to the
experienced plant operations and
maintenance people who had to take actions.
Ledet and his team began the development of
a simulation model to capture the
systemwide, dynamic benefits, and cost of
different maintenance initiatives.
Help came from Mark Paich as coach and
facilitator with full participation and hands-on
workshop from Ledet and team.
The dynamic hypothesis they developed
explained the paradox that du pont spent
more on maintenance and got less for it in
terms of uptime and equipment reliability.
Prior to modeling work:
Maintenance seen as: 1. process of defect
correction. 2. cost to be minimized.

The first conceptual shift:
Change the focus from defect correction to
defect prevention and defect elimination.

The model therefore centered on the physics
of breakdowns rather than the cost
minimization mentality that prevailed
throughout the organization.
Figure 2-8. Defect Creation and Elimination
Figure 2-9. Positive Feedbacks undercutting planned maintenance.
Figure 2-10. Additional positive feedbacks leading to a reactive maintenance culture .

Once the model was adequately calibrated to
the historical data, the next step was to design
high leverage policies to escape from the
reactive regime. The team simulated the
impact of different policies, including those
that had been tried and failed in the past.
Challenge: to implement the needed changes
from top management to down staffs which
number in thousand whose nothing in mind
about system dynamics nor computer modeling.
Fortunately, Ledet was familiar with beer
distribution game, a role-playing management
flight simulator of a manufacturing supply
chain developed by the MIT System Dynamics
Group as an introduction of systems thinking.
Working with his son, Ledet transformed the
maintenance game into a 2-days workshop or
learning laboratory designed to be highly
interactive, to put people at ease, and to
create environment for learning that
addressed emotional as well as cognitive
There are 3 roles:
operations managers: charged with meeting demand and
has equipment, represented by chips.
As production proceeds, red markers representing latent
defects are placed on the equipment chips. When enough red
markers accumulate, the equipment breaks equipment chips.
maintenance manager: must allocate mechanics to repair
the equipment and go to the spare parts store to see if the
needed parts (determined by a roll of the dice) are
available. If parts are in stock, the equipment is repaired. If
not, the mechanics must wait until they are available or pay
to have delivery expedited. ALTERNATIVELY, the
maintenance manager can schedule planned work ordering
the needed parts and allocating mechanics in advance.
spare part stores managers: check availability and serve
mechanics needs.
Planned maintenance can only be done if the operations
managers agrees to take operating equipment out of service.

Team A: Cost minimization, reactive maintenance,
Team B: Planned maintenance strategy,
By compressing time the game allows people to
experience the worse-before-better dynamic in a
few hours instead of months.
The game became popular throughout the
The surge in demand stressed the lagged
number of skilled facilitators.
By the end of 1992, 1200 people has
participated in the workshop and more than
50 facilitators has been certified.
Success creates its own challenges.
1. persistence of the cost-cutting mentality.
2. Rewarding the modeling team.
Ledet acquired the rights to the game from Du
Pont, took early retirement, and became
entrepreneur, working with other companies
to implement the approach.

Mental Model
Preventive maintenance practices versus
immediate production and cost-cutting
efficiencies pressure.
Exacerbated by the mental models of
employee from top to bottom of the
Conceptualize highly-interdependent, dynamic
processes as if they can be decomposed into
separable functions and discrete events.
Lesson learned:
When things go wrong, do not penetrate the mental models, but associate with a particular
person who made an error or leadership efficiency in the abstract.
Rational and Irrational Decisions
Information is available in order to design
better strategies and practices.
The strategic and operational levels of the
organization do not easily integrate their
concerns and feedback to improve.
Du Pont and BP Lima have organizational
structures and incentives that made it
individually rational at least in the short run
and accepted logic within the organization.
Lesson learned:
Aligning individual and organizational rationality is to change mental models so as to create
understanding of longer-term global issues and to change work practices and organizations
based on these new understanding.
Changing Mental Models
Successful problem solving at Du Pont did not
stop only at technical experts analysis, but also
the effort to change the way maintenance was
understood from top to bottom of the
They have succeeded at changing mental models
through an experiential game that provides a
complex, dynamic learning environment in which
employees enact old and new practices and
receive feedback in a form and context that
encourages learning.
Lesson learned:
Game simulation is not sufficient to change mental models. It has to be accompanied by
opportunities to share experiences and develop skills in legitimized ways.
Changing Work Practices and

A resistance to change in maintenance
emerge after initial success from employee
motivations, career paths, power structures,
and complacency.

Lesson learned:
New mental models are only groundwork fro the seeds of change. However it needs to be
transformed into work practice that produce operational improvements. And it is the most
difficult process.
Ultimately implementation success required
the modeling team to embed their insights into
a learning environment that involved the active
participation of the people on the front lines,
that enabled people to discover those insights
for themselves, and that spoke not only to their
heads but also to their hearts.