Draft System Dynamics in Action

8/10/2019 Draft System Dynamics in Action

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Chapter 2:

System Dynamics in Action


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2.4 PLAYING THE MAINTENANCE GAME


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BACKGROUND


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DuPont

1991 sales

$38 million profit

$1.4 million aftertax profit

Largest U.S chemical manufacturer


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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

less?


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Suggestive ideas of reasons:

Difficult competitive environment, since

there is only little product differentiation for

commodity feedstock, so other dimensionslike cost and delivery reliability are challenged.

Severe energy crises wreaked havoc with input

and operating cost. Environmental concerns and regulation were

growing.


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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.


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Proposed plan:

Explore the ways in which different parts ofthe maintenance system interacted.

Explain why past attempts to improve hadfailed.

Assist in the design of new polices.

Explain the complex dynamics to theexperienced plant operations andmaintenance people who had to take actions.


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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.


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DYNAMIC HYPOTHESIS

2.4.1


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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.


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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.


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Figure 2-8. Defect Creation and Elimination


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Figure 2-9. Positive Feedbacks undercutting planned maintenance.


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Figure 2-10. Additional positive feedbacks leading to a reactive maintenance culture .


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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.


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THE IMPLEMENTATION CHALLENGE

2.4.2


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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.


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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.


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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

issues.

Th 3 l


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There are 3 roles:

operations managers: charged with meeting demand andhas equipment, represented by chips.

As production proceeds, red markers representing latent

defects are placed on the equipment chips. When enough redmarkers accumulate, the equipment breaks equipment chips.

maintenance manager: must allocate mechanics to repairthe equipment and go to the spare parts store to see if theneeded parts (determined by a roll of the dice) are

available. If parts are in stock, the equipment is repaired. Ifnot, the mechanics must wait until they are available or payto have delivery expedited. ALTERNATIVELY, themaintenance manager can schedule planned work orderingthe needed parts and allocating mechanics in advance.

spare part stores managers: check availability and servemechanics needs.

Planned maintenance can only be done if the operationsmanagers agrees to take operating equipment out of service.


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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.


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The game became popular throughout the

company.

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.


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RESULTS

2.4.3


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Success creates its own challenges. 1. persistence of the cost-cutting mentality.

2. Rewarding the modeling team.


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Ledet acquired the rights to the game from Du

Pont, took early retirement, and became

entrepreneur, working with other companies

to implement the approach.


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TRANSFERRING THE LEARNING:

THE BRITISH PETROLEUMS LIMA EXPERIENCE

2.4.4


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LESSONS LEARNED

Summary


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Mental Model

Preventive maintenance practices versusimmediate production and cost-cuttingefficiencies pressure.

Exacerbated by the mental models ofemployee from top to bottom of theorganization.

Conceptualize highly-interdependent, dynamicprocesses as if they can be decomposed intoseparable 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.


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Rational and Irrational Decisions

Information is available in order to designbetter strategies and practices.

The strategic and operational levels of the

organization do not easily integrate theirconcerns and feedback to improve.

Du Pont and BP Lima have organizational

structures and incentives that made itindividually rational at least in the short runand 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.


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Changing Mental Models

Successful problem solving at Du Pont did notstop only at technical experts analysis, but alsothe effort to change the way maintenance wasunderstood from top to bottom of the

organization. They have succeeded at changing mental models

through an experiential game that provides acomplex, dynamic learning environment in which

employees enact old and new practices andreceive feedback in a form and context thatencourages 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.


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Changing Work Practices and

Organizations

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.


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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.

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Draft System Dynamics in Action