A Collaborative Manufacturing
Collective
Ken Dozier & David Chang
Western Research Application Center
HICSS 2015
Knowledge Systems Track
January 7, 2015
Kaua’i Hawaii
Western Research Application Center (WESRAC)

Semiotics, Syntax & Plasma Physics
Western Research Application Center (WESRAC)

• Used a Design Research Framework to create a
Learning Object Game Immersed in Complex
Systems (LOGICS) process and product artifact.
• Used the NetLogo “ Hubnet ” capability to immerse a human agents into the simulate the dynamics of the classic Sterman “ Beer Game ” .
• Create a persuasive experience that nudged players abandon heuristics and invest in IT rationality to improve economic performance in a counter-intuitive dynamic business system.
Western Research Application Center (WESRAC)

•
Observations
– Cyclic phenomena in complex dynamic business systems
• Ubiquitous & Disruptive
• Wild oscillations in supply chain inventories
•
Results of Observations and Simulations
– Negative Feedback Systems with Delays Oscillate
– Phase dependence of oscillations on position in chain
– Understanding of Managements Personality Impact
– Commitment to Rationality Dramatically Increases Financial
Performance
•
MIT Sterman “
Beer Game ” Simulation
– Single Customer, Single Product, 4 Tier Supply Chain
– Published Suboptimal Performance 1 Order of Magnitude
– Experimental Suboptimal Performance 2 Orders of Magnitude
Western Research Application Center (WESRAC)

23 rd Order Differential Equation
Model Developed by Dr. Nathan B. Forrester of A.T. Kearney, Atlanta, 2000
Western Research Application Center (WESRAC)

Teaching Takes Off: Flight Simulators for Management Education, Sterman (1992)
Western Research Application Center (WESRAC)

Steady state at 4 cases per order.
Wilensky, U. (1999). NetLogo. http://ccl.northwestern.edu/netlogo
. Center for Connected Learning and Computer-Based Modeling.
Northwestern University,
Evanston, IL
Beer Game Demo Densmore, O. June 2004
Western Research Application Center (WESRAC)

A 4 Unit
Constant
Demand is
Changed to an 8
Unit Constant
Demand
Wilensky, U. (1999). NetLogo. http://ccl.northwestern.edu/netlogo.
Center for Connected Learning and
Computer-Based Modeling.
Northwestern University, Evanston, IL
Beer Game Demo Densmore, O. June 2004
Western Research Application Center (WESRAC)

Direction
Cooperation
Efficiency Proficiency
Competition
Concentration
Innovation
Source: “ The Effective Organization: Forces and Form ” ,
Sloan Management Review, Henry Mintzberg, McGill University 1991
Western Research Application Center (WESRAC)

Source: Gus Koehler, University of Southern California
Department of Policy and Planning, 2002
Western Research Application Center (WESRAC)

Source: Gus Koehler, University of Southern California
Department of Policy and Planning, 2002
Western Research Application Center (WESRAC)

Source: Gus Koehler, University of Southern California
Department of Policy and Planning, 2002
Western Research Application Center (WESRAC)

Source: Gus Koehler, University of Southern California
Department of Policy and Planning, 2002
Western Research Application Center (WESRAC)

Low β
Market Redefinition
Supply-chain Expansion
Supply-chain Discovery
Business Model Redefinition
Business Model Refinement
Business Process Redesign
Business Process Improvement
High β
Western Research Application Center (WESRAC)
Seven Organizational Change Propositions Framework,
“ Framing the Domains of IT Management ” Zmud 2002

• Advanced plasma theories are extremely important when one tries to explain the various waves and instabilities found in the plasma environment.
• Since plasma consist of a very large number of interacting particles, in order to provide a macroscopic description of plasma phenomena it is appropriate to adopt a statistical approach.
• This leads to a great reduction in the amount of information to be handled.
• In the kinetic theory it is necessary to know only the distribution function for the system of particles.
Source: University of Oulu, FInland
Western Research Application Center (WESRAC)

• Investigated the β bureaucratic factor and it ’ s inverse organizational temperature T (dispersion) in the 5 metropolitan service areas surrounding Los Angeles.
• Investigated the ability of Stratification to Differentiate impact of IT Investment on output and job creation
– Large firms invest in IT to increase output and eliminate jobs
– Small firms invest in IT to increase output and expand workforce
• Investigate Partition Function Z, Cumulative Distribution
Function opened the linkage to Statistical Physics
– Dozier-Chang (06) Journal of Information Technology Theory and
Application
• Math Intensive Solution Ideal for Cloud Architectures
– Marginal Cost on a per transaction basis
– “
Give them a Browser (Razor), sell them Transaction (Blades)
”
– Accommodates Both Large and Small Firms
Western Research Application Center (WESRAC)

Comparison of U.S. economic census cumulative number of companies vs shipments/company (blue diamond points) in Los Angeles County Metropolitan
Service Area in 1992 and the statistical physics cumulative distribution curve
(square pink points) with β = 0.167 per $106
4000
3500
3000
2500
2000
1500
1000
500
0
0 10 20 30 40 50 60
Western Research Application Center (WESRAC)

• This model does allow examination of the optimal timing for interventions of these propagations and parametric forces. Something not possible in simulation models to date
• The most effective paramedic interventions will be those that use information technologies to harmonize with naturally occurring Normal
Modes of the system.
• Disturbances from non optimal interventions move up and down the supply chain.
Western Research Application Center (WESRAC)

Design Science
Framework
Takeda, Veerkamp,
Tomiyama, Yoshikawa (AI)
Purao (IS&T)
Dasgupta (IS&T)
Vaishnavi & Kuechler, Design Science Research Methods and Patterns (2008)
Western Research Application Center (WESRAC)

Western Research Application Center (WESRAC)

LOGICS
Behavior Space
Generator
Participatory ABMS Analysis Space
Western Research Application Center (WESRAC)

Western Research Application Center (WESRAC)

Western Research Application Center (WESRAC)

Results of Five Designs
(measuring total system cost)
Western Research Application Center (WESRAC)

Design 1 Normally Distributed
Western Research Application Center (WESRAC)
Design 5 Highly Skewed

Trial Player 1 Player 2 Player 3
1 4356 15588 6243
2 4362 4289 16650
3 3393 8156 5840
4 1563 1491
5 2885 1876
Total
System
Cost per
Trial
HPC Orders 21% 55%
Western Research Application Center (WESRAC)

5000
4000
3000
2000
1000
0
0
•
Results can be interpreted in a self consistent manner since each trial can be considered independent.
•
A “ success ” occurs when the total cost is less that some target
•
Binomial Distribution is Appropriate for a Modest Sample Size
•
There is a 7 fold improvement in target teaching costs in only five trials
•
This is a dramatic improvement in past experience with reinforced learning for the Beer
Game problem
6000
Teaching Target Costs from Box Plots
N=3 p=1/7
1 2 3
Trial number
4 5 6
Western Research Application Center (WESRAC)

Western Research Application Center (WESRAC)

• Game 1: Manual ordering with repetition. Control group average 10 times larger than Sterman.
• Game 2: Manual ordering using Senge ’ s “ Do nothing strategy ” Retail absorbs the bulk of the costs
• Game 3: Local computing enables Wal-Mart's to kill supplier factories
• Game 4: Any technical solution is better than intuition
• Game 5: If we cooperate we make 100 times more money
• The Optimal to Average performance ratio of 100 to 1
Western Research Application Center (WESRAC)

•
Much room for improvement
– Asynchronous interaction between tiers.
– Realistic demand time-series
– Realistic normal modes and associated optimal values
– Machine Learning Agents to be incorporated
– Cloud computing platforms for implementation of collaboration
– Approach is applicable to more complex adaptive manufacturing networks where efficiency is achieved by cloud-mediated feedback to individual firms.
Western Research Application Center (WESRAC)

Western Research Application Center (WESRAC)

For more information, please
Visit the Learning Center
kdozier@usc.edu
Google WESRAC
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Western Research Application Center (WESRAC)