W2 - System Dynamics

2/24/2015
Week System
02 Dynamics
TI141317 – Simulasi Sistem Industri
Introduction
• Knowing how to do simulation doesn’t make someone a

good systems designer
• Simulation is a tool that is useful only if one
understands the nature of the problem to be solved
• Simulation is designed to help solve systemic problems
that are operational in nature.
Lab. KOI Jurusan Teknik Industri - ITS
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Introduction
• Simulation exercises fail to produce useful

result more often because of a lack of
understanding of system dynamics than a lack
of knowing how to use the simulation software
• The challenge is in understanding how the
system operates, knowing what you want to
achieve with the system, and being able to
identify key leverage points for best achieving
desired objective.
Objectives
• What is system?
• What are the elements of a system?
• What makes systems so complex?
• What are useful system metrics?
• What is a system approach to systems planning?
• How do systems analysis techniques compare
with simulation?
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System Definition
• A system is defined as a collection of elements

that function together to achieve a desired goal
(Blanchard, 1991)
• Key points include:

– A system consists of multiple elements.
– These elements are interrelated and work in
cooperation.
– A system exists for the purpose of achieving specific
objectives.
System Definition
• Examples of systems:
– Traffic systems
– Political systems
– Economic systems
– Manufacturing systems
– Service systems
• Main focus
– manufacturing and service systems that process
materials, information, and people.
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System Definition
• Manufacturing systems: • Service systems:

– Small job shops – Health care facilities
– Machining cells – Call centers
– Amusement parks
– Large production
facilities – Public transportation
systems
– Assembly lines
– Restaurant
– Warehousing – Bank
– Distribution – etc
– Supply chain systems
System Definition
• Both manufacturing and service systems may be

termed processing systems.
– They process items through a series of activities.
• Processing systems:
– Artificial (human-made)
– Dynamic (elements interact overtime)
– Usually stochastic (they exhibit random behavior)
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System Elements
• From a simulation perspective, a system consists of

entities, activities, resources, controls.
• The elements define the who, what, where, when, and
how of entity processing.
Incoming entities Outgoing entities

Activities
Resources Controls
System
System Elements
• Entities:
– items processed through the system such as
products, customers, and documents.
– different entity may have unique characteristics
such as cost, shape, priority, quality, or condition.
We called them Attributes.
– divided into:
 human or animate (customers, patients, etc.)
 inanimate (parts, documents, bins, etc.)
 intangible (calls, electronic mail, etc.)
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System Elements
– [For most manufacturing and service

systems] discrete items.
– [For some production systems: continuous
systems] non discrete substance
 Example: oil refineries, paper mills
System Elements
• Activities
– the tasks performed in the system (directly or
indirectly) in the processing of entities.
– example:
 Servicing a customer
 cutting a part on machine
 repairing a piece of equipment
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System Elements
• Activities ….
– Consume time and often involve the use of
resources
– Classified as:
 entity processing (check-in, treatment, inspection,
fabrication, etc.)
 entity and resource movement (forklift travel, riding in an
elevator, etc.)
 resource adjustments, maintenance, and repairs (machine
setups, copy machine repair, etc.)
System Elements
• Resources
 the means by which activities are performed
 provide the supporting facilities, equipment,
and personnel for carrying out activities.
 can constrain processing by limiting the rate
at which processing can take place
 have characteristics, e.g. capacity, speed,
cycle time, and reliability.
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System Elements
 can be categorized as:

 Human or animate (operators, doctors, maintenance personnel,
etc.)
 Inanimate (equipment, tooling, floor space, etc.)
 Intangible (information, electrical power, etc.)
 also can be classified as

 dedicated or shared
 permanent or consumable
 mobile or stationary
System Elements
• Controls
– dictate how, when, and where activities are
performed.
– impose order on the system.
– [at the highest level] consists of schedules, plan,
and policies.
– [at the lowest level] take the forms of written
procedures and machine control logic.
– [at all levels] provide the information and decision
logic for how the system should operate.
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- [at all levels] provide the information and decision

logic for how the system should operate.
 Routing sequences
 Production plans
 Work schedules
 Task prioritization
 Control software
 Instruction sheets
System Complexity
• Elements of a system operate with one another in ways

that often result in complex interactions.
• Unaided human intuition is not very good at analyzing
and understanding complex systems.
• Inability of the human mind to grasp real-world
complexity is called as “the principle of bounded
rationality” (Herbert Simon).
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System Complexity
• This principle states that “the capacity of human mind

for formulating and solving complex problem is very
small compared with the size of problem whose
solution is required for objectively rational behavior in
the real world, or even for a reasonable approximation
to such objective rationality” (Simon, 1957).
System Complexity
• System complexity is a primary function of two

factors:
– Interdependencies between elements so that each
element affects other elements.
– Variability in element behavior that produces
uncertainty.
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System Complexity
The degree of analytical difficulty increases

exponentially as the number of interdependencies and
random variables increase.
System Performance Metrics
• Metrics are measures used to assess the performance of

a system.
• At the highest level of an organization or business,
metrics measure overall performance in terms of
profits, revenues, cost relative to budget, return on
assets, and so on.
– Such metrics are inherently lagging, disguise low-level
performance, and are reported only periodically
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• From an operational standpoint, it is more beneficial to

track such factors as time, quality, quantity, efficiency,
and utilization.
– These operational metrics reflect immediate activity and are
directly controllable
– They drive the higher financially related metrics
• Key operational metrics that describe the

effectiveness and efficiency of manufacturing
and service systems:
– Flow time
– Utilization
– Value-added time
– Waiting time
– Flow rate
– Inventory or queue levels
– Yield
– Customer responsiveness
– Variance
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System Variables
• Designing a new system or improving an existing system

requires more than simply identifying the elements and
performance goals of the system.
• It requires an understanding of how system elements
affect each other and overall performance objectives.
System Variables
• Three types of system variable must be

identified:
– Decision variables
– Response variables
– State variables
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System Variables
• Decision variables
– called as input factors or independent variables
– changing the values of a system’s independent
variables affects the behavior of the system
– Variables  controllable or uncontrollable
– controllable variable  decision variables
System Variables
• Response variables
– called as performance or output variables
– measure performance of the system in response to
particular decision variable settings.
– In an experiment, the response variable is the
dependent variable.
– The goal in system planning is to find the right
values or settings of decision variables that give the
desired response value.
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System Variables
• State variables
– State variables are the status of the system at any
specific point in time.
– Response variables are often summaries of state
variable changes over time.
– State variables are dependent variables.
System Optimization
• Optimization is finding the right setting for decision

variables that best meets performance objectives.
• Optimization seeks the best combination of decision
variable values that either minimizes or maximizes
some objective functions such as costs or profits.
• An objective function is a response variable of the
system.
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System Optimization
• A typical objective in an optimization problem for a

manufacturing or system systems:
– minimizing costs
– maximizing flow rate
• Optimization problems may include constraints that
limits the values of decision variables.
System Optimization
• In some instances, there are problems of conflicting

objectives.
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System Approach
Kofman and Senge (1995) observe:

The defining characteristic of a system is that it cannot be
understood as a function of its isolated components. First, the
behavior of the system doesn’t depend on what each part is
doing but on how each part is interacting with the rest … Second,
to understand a system we need to understand how it fits into
the larger system of which it is a part… Third, and most
important, what we call the parts need not be taken as primary.
In fact, how we define the parts is fundamentally a matter of
perspective and purpose, not intrinsic in the nature of the “real
thing” we are looking at.
System Approach
• Due to departmentalization and specialization,

decisions in the real world often made without regard
to overall system performance.
• Approaching system design with overall objectives in
mind and considering how each element relates to each
other and to the whole is called a systems or holistic
approach to system design.
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System Approach
Four-step iterative approach to systems improvement
System Approach
• Identifying problems and opportunities

– Developing a solution starts by understanding the
problem, identifying key variables, and describing
important relationships.
– This helps identify possible areas of focus and
leverage points for applying a solution.
– Techniques such as cause-and-effect analysis and
Pareto analysis are useful.
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System Approach
– Performance standards must be set high in order to

look for the greatest improvement opportunities.
– Setting high standards pushes people to think
creatively and often results in breakthrough
improvement
System Approach
• Developing alternative solutions

– Once a problem or opportunity has been identified
and key decision variables isolated, alternative
solution can be explored.
– This is where most of the design and engineering
expertise comes into play.
– Generating alternative solutions requires creatively
as well as organizational and engineering skills.
– Simulation is particularly helpful in that it
encourages thinking in radical new ways.
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System Approach
• Evaluating the solutions

– Alternative solutions should be evaluated based on
their ability to meet the criteria established for the
evaluation.
– These criteria include performance goals, cost of
implementation, impact on the socio-technical
infrastructure, and consistency with organizational
strategies.
– Many of these criteria are difficult to measure in
absolute terms.
System Approach
– After narrowing the list to two or three of the most

promising solutions using common sense and rough-
cut analysis, more precise evaluation techniques
may need to be used.
– This is where simulation and other formal analysis
tools come into play.
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System Approach
• Selecting and implementing the best solution

– Often the final selection of what solution to implement
is not left to the analyst, but rather a management
decision.
– The analyst’s role is to present his/her evaluation in the
clearest way possible so that an informed decision can
be made.
– Even after a solution is selected, additional modeling
and analysis are often needed for fine-tuning the
solution.
– Implementers should then be careful to make sure that
the system is implemented as designed, documenting
reasons for any modifications.
Ways to Study a System
SISTEM
Experiment Experiment
with the actual with a model
system of the system
Physical Mathematical
Model Model
Analytical Simulation
solution
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System Analysis Techniques
• While simulation is perhaps the most versatile and

powerful system analysis tool, other available
techniques also can be useful in planning.
• These alternative techniques are usually computational

methods that work well for simple systems with little
interdependency and variability.
• For more complex systems, these techniques still can

provide rough estimates but fall short in producing the
insights and accurate answers that simulation provides.
Simulation improves performance predictability
100%
With
simulation
System predictability
50% Without
simulation
Call centers Banks Airports

Doctor’s offices Emergency rooms Hospitals
Machining cells Production Lines Factories
0%
Low Medium High
System Complexity
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• In addition to simulation, system analysis tools

include:
– Hand calculations
– Spreadsheet
– Operations Research techniques
• Hand calculations
– Quick-and-dirty, pencil-and-paper sketches and
calculations can be remarkably helpful in
understanding basic requirements for a system
– Some decisions may be so basic that a quick mental
calculation yields the needed results.
– Most of these calculations involve simple algebra.
– The obvious drawback is the inability to manually
perform complex calculations or to take into
account tens or potentially even hundreds of
complex relationship simultaneously.
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• Spreadsheets
– What-if experiments can be run on spreadsheet
based on expected values and simple interactions.
– Spreadsheet simulation can be very useful for
getting rough performance estimates.
– Weaknesses of spreadsheet modeling:
 Some potential problems are not readily apparent
 All behavior is assumed to be period-driven rather than
event-driven
Operations Research Techniques
– Traditional OR techniques utilize mathematical

models to solve problems involving simple to
moderately complex relationships.
– These mathematical models include both
deterministic models (e.g. mathematical
programming, routing, or network flows) and
probabilistic models (e.g. queuing and decision
trees).
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Operations Research Techniques
– These OR techniques provide quick, quantitative

answers without going through the guesswork
process of trial and error.
– OR techniques can be divided into: prescriptive and
descriptive
• Prescriptive techniques (Analytical techniques)

– an optimum solution to a problem
– linear programming, dynamic programming
– do not allow random variables
– conditions are constant over the period of study
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• Descriptive techniques
– static analysis techniques such as queuing theory
that provide good estimates for basic problems
– limited to only one or two metrics
– give only average performance measures rather
than a complete picture of performance over time
26

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2/24/2015

• Knowing how to do simulation doesn’t make someone a

Lab. KOI Jurusan Teknik Industri - ITS

• Simulation exercises fail to produce useful

Lab. KOI Jurusan Teknik Industri - ITS

• A system is defined as a collection of elements

• Key points include:

Lab. KOI Jurusan Teknik Industri - ITS

Lab. KOI Jurusan Teknik Industri - ITS

• Manufacturing systems: • Service systems:

Lab. KOI Jurusan Teknik Industri - ITS

• Both manufacturing and service systems may be

Lab. KOI Jurusan Teknik Industri - ITS

• From a simulation perspective, a system consists of

Incoming entities Outgoing entities

Lab. KOI Jurusan Teknik Industri - ITS

Lab. KOI Jurusan Teknik Industri - ITS

– [For most manufacturing and service

Lab. KOI Jurusan Teknik Industri - ITS

Lab. KOI Jurusan Teknik Industri - ITS

Lab. KOI Jurusan Teknik Industri - ITS

Lab. KOI Jurusan Teknik Industri - ITS

 can be categorized as:

 also can be classified as

Lab. KOI Jurusan Teknik Industri - ITS

Lab. KOI Jurusan Teknik Industri - ITS

- [at all levels] provide the information and decision

Lab. KOI Jurusan Teknik Industri - ITS

• Elements of a system operate with one another in ways

Lab. KOI Jurusan Teknik Industri - ITS

• This principle states that “the capacity of human mind

Lab. KOI Jurusan Teknik Industri - ITS

• System complexity is a primary function of two

Lab. KOI Jurusan Teknik Industri - ITS

The degree of analytical difficulty increases

Lab. KOI Jurusan Teknik Industri - ITS

System Performance Metrics

• Metrics are measures used to assess the performance of

Lab. KOI Jurusan Teknik Industri - ITS

System Performance Metrics

• From an operational standpoint, it is more beneficial to

Lab. KOI Jurusan Teknik Industri - ITS

System Performance Metrics

• Key operational metrics that describe the

Lab. KOI Jurusan Teknik Industri - ITS

• Designing a new system or improving an existing system

Lab. KOI Jurusan Teknik Industri - ITS

• Three types of system variable must be

Lab. KOI Jurusan Teknik Industri - ITS

Lab. KOI Jurusan Teknik Industri - ITS

Lab. KOI Jurusan Teknik Industri - ITS

Lab. KOI Jurusan Teknik Industri - ITS

• Optimization is finding the right setting for decision

Lab. KOI Jurusan Teknik Industri - ITS

• A typical objective in an optimization problem for a

Lab. KOI Jurusan Teknik Industri - ITS

• In some instances, there are problems of conflicting

Lab. KOI Jurusan Teknik Industri - ITS

Kofman and Senge (1995) observe:

Lab. KOI Jurusan Teknik Industri - ITS

• Due to departmentalization and specialization,

Lab. KOI Jurusan Teknik Industri - ITS

Four-step iterative approach to systems improvement