The critical importance of Dynamic Simulation Modeling in management decision making and education
Presented by Dr. Alan Barnard
March 24, 2018
8:00am - 9:30am Pacific Time
The ultimate constraint in organizations is the limited attention of management. Management wastes their limited attention when they make bad decisions or predictions and then have to deal with the consequences of these bad decisions or predictions. One of the most common types of “bad decisions” involve management making decisions that achieves local/short term optima rather than global/long term optima for the organization as a whole. The cause of this type of mistake is often reported as “local efficiency” or other local or short-term optima metrics.
What is often overlooked is the practical difficulty managers face in actually considering and/or predicting the global or long-term impact of their local decisions and/or the difficulty in deciding what local decision rules to use for global rather local optima Due to the inherent complexity and sensitivity to starting conditions, the system wide or long-term impact is often NOT predictable with simple models developed in Spreadsheets or decision support models within ERP systems.
Also, the intuition managers need to make challenging and often subjective decisions, are mainly developed considering the short term or local impact of their decisions. The more complex the environment, the longer it will take to develop the intuition needed, because global optima rules are often counter-intuitive from a local perspective and because there is often a long lag in space and/or time between our actions and the consequences of those actions.
But is there a practical solution to these two challenges?
In this webinar, Dr. Alan Barnard, CEO of Goldratt Research Labs, will share his research and field experience insights with Eli Schragenheim, on how dynamic simulation modeling offers a practical solution to overcome these two challenges. They will discuss why it is so difficult for managers to know what rules to use for global rather than local optima and also why it is so challenging for them to consider or predict the long term/system wide impact of their decisions. And then, references a few case studies, will share why dynamic simulation modeling is so critical, not only in helping managers more accurately predict the system wide and long-term impact of their decisions, but also to fast-track the development of the intuition they need to make better faster decisions.
About the Presenter:
Dr. Alan Barnard (PhD) is one of the leading experts in the world in the field of Theory of Constraints (TOC) and frequently worked with Dr. Eli Goldratt, creator of Theory of Constraints on large and complex projects around the world. Alan is the CEO of Goldratt Research Labs (USA), Chairman of African Phosphate (RSA) and The Odyssey Institute (USA).
Alan’s goal in life is to use his 20+ years TOC research, consulting and implementation knowledge & experience to help both organizations from the private and public sector as well as individuals see and unlock their inherent potential.
In 2009, Alan was awarded a PhD in the Management of Technology & Innovation from the Da Vinci Institute with a thesis titled "How to identify and unlock inherent potential within organizations and individuals using a Systems Approach”.
Alan is certified by the "Theory of Constraints International Certification Organization” (TOCICO) at the "implementer” level in all Theory of Constraints (TOC) applications (Operations, Finance, Projects, Supply Chain, Thinking Processes and Holistic Business Strategy). Alan received the Life-time Achievement award from TOCICO in 2006 for his life-time contribution to TOC and TOCICO.
Alan is also author of various published TOC related papers & articles and contributed two chapters to the 2010 McGraw Hill published "Theory of Constraints Handbook” and was a contributing author of for Gerald Kendall’s book "Viable Vision: Transforming Total Sales into Net Profits” (Ross Publishing, 2004).
Alan is a former president of SAPICS (2000 to 2002) and former president of TOCICO (2003 to 2005) and received the TOCICO Lifetime Achievement award in 2006. He has worked at a strategy level with companies such as ABB, BHP Billiton, African Explosives, Cisco, SAP, Random House Publishing, Tata Steel, RAK Ceramics, and Larsen & Toubro in the Private sector and in the Public sector with the UN DP, the UN WFP, Utah State Government and City Councils in Developing countries to help them identify and unlock inherent potential through the application of Theory of Constraints.
Alan is also the developer of the HARMONY Strategy & Tactic Desktop, Web App and iPhone App software suite that was nominated for the Silicon Valley Business App Awards in 2013.