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General Motors OnStar

General Motors OnStar

The Official Website

onstar.com is the official website in which you can become a member, get familiar with the services and purchase a plan.

The Issue You Tackled

In 1997, General Motors (GM) assembled a project team to develop its OnStar telematics business. Telematics is the provision of communications services to cars, including crash notification, navigation, Internet access, and traffic information. OnStar is GM’s two-way vehicle communication system that provides a variety of services that enhance safety, security, entertainment, and productivity. At the time, GM faced fundamental strategic decisions with respect to OnStar. The default and safe strategy was to market OnStar as a car feature that would improve vehicle safety and security. An alternate strategy was to view OnStar as a service business that could contribute greatly to GM’s profits.

What You Actually Did

GM formed a project team to consider alternative strategies for OnStar. GM makes important strategic decisions through the dialogue decision process, in which the project team interacts with the decision board that is responsible for actually making the decision and committing resources. Dynamic modeling can be a part of this process.

In this case, application of modeling was difficult. In the vehicle business, GM has decades of experience and plentiful historical data. Modelers can build on a wealth of previous analyses and examples of best practice. The OnStar business was very different in that the telematics market did not exist. To cope with the inherent uncertainty, we needed a modeling process that would allow integration of various methods and data sources. A simulation model was our core tool in the OnStar strategy project. The final model had six key sectors: customer acquisition, customer choice, alliances, customer service, finances, and dealer behavior.

In late 1997, the project team recommended a very aggressive strategy that included installation on all GM vehicles, recruitment of other manufacturers into the OnStar system, making the first year of service free and aggressively pursuing alliances with content partners.

The Results

Through 2001, the implementation of the OnStar business strategy has progressed very much as expected. The project contributed to creating a new enterprise mental model for GM, in which the transactions revenue is augmented with a stream of revenue from service businesses like OnStar. The OnStar project also created the new telematics business which did not exist before GM implemented its strategy. Today, Wall Street analysts project that the industry will grow to $12 billion over the next 10 years. By far, OnStar’s most important contribution is saving lives. OnStar answers thousands of emergency calls each month and has often made the difference between life and death.

Name The General Motors OnStar Project
Modelers Vince BarabbaChet Huber, Fred Cooke, Nick Pudar, Jim Smith, Mark Paich
Client General Motors
Client Type Corporation

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Publications

A multimethod approach for creating new business models: the General Motors OnStar project Download

Did You Know?

System Dynamics Application Award

The System Dynamics Applications Award is presented by the Society every other year for the best “real world” application of system dynamics. In 2007, the Society awarded its first Applications Award to Vince Barabba, Chet Huber, Fred Cooke, Nick Pudar, Jim Smith, and Mark Paich for their work A Multimethod Approach for Creating New Business Models: The General Motors OnStar Project.

To see the citation that was made by James Lyneis at the conference, please follow this link(Jul 2007)

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Urban Dynamics

Urban Dynamics

The Urban Dynamic Model (UDM) is a simulation of how transport interacts with population, employment and land-use over long periods of time, typically ten years or more. It was developed to help understand how transport could contribute to economic regeneration by improving the ability of employers to recruit a workforce and their access to customers and suppliers, and by improving access to employment opportunities.
For example, the vicious circle of congestion is familiar to us all but is almost impossible to capture in traditional models. In short, the cycle includes improved transport which reduces travel time, making businesses easier to access for customers, generating increased employment, leading to more transport activity and increased congestion.

The UDM was developed over a number of years, beginning with a fairly simple model built in 2000. This was used in one of a series of large scale transport studies commissioned by the government at the time. Its role at that time was to test the regeneration claims being made for a proposed by-pass that would have passed through an area of outstanding natural beauty. Models of this type must be able to represent the spatial characteristics of the study area, usually using a zone structure, and the road and public transport links connecting the zones together. Other applications followed, and then in 2005 we were commissioned by the Department for transport to carry out a study into the impact of transport on business location decisions. Current guidance from the Department for Transport emphasises the wider role of transport in supporting the economy, but also points to the need for reducing carbon dioxide emissions.

The UDM is generic, and has been applied widely in the UK with local authorities. Conclusions vary from one application to another, but some of the findings we have reported include measures to generate employment can appear to have a significant effect if examined very locally, but we often find that some employment is transferred from elsewhere, and the net effect can be less than might first appear, city centres remain the best locations for many types of employer because they provide the best access to a workforce and bring ‘agglomeration’ benefits that employers enjoy by being clustered together. Studies of major programmes of transport investment typically involve expenditure of tens or hundreds of millions of pounds. The measured benefits are usually expressed in money, and expressing both the social and economic impacts of investment and can also run to hundreds of millions of pounds.

Client UK local authorities
Authors/Consultants Swanson J (Sdgworld; Steer Davies Gleave)

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More Information

For more information on this case, please contact John Swanson at Sdgworld, or see this link.

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Energy Policy Analysis in Mauritius

Energy Policy Analysis in Mauritius

Under the leadership of the Ministry of Renewable Energy and Public Utilities of the Republic of Mauritius and with support from UNDP, the Millennium Institute (MI) has carried out an assignment on supporting formulation and evaluation of Mauritius’ longer term energy policy framework. The goal of this project is to empower the Ministry of Renewable Energy and Public Utilities, and the Government of Mauritius, with a flexible, integrated, dynamic and user-friendly uniquely customized simulation model that allows for the evaluation of energy policy proposals to make informed decisions on longer term policy planning. This model was jointly developed with a team of experts, including representatives from Ministry of Public Infrastructure, Land Transport and Shipping, the Central Electricity Board (CEB), the Electrical Services Division (ESD), the Mauritius Sugar Industry Research Institute (MSIRI), the Central Statistics Office (CSO), the Maurice Ile Durable (MID) Fund, the University of Technology Mauritius (UTM).

Because of its flexibility and ease of use, in addition to its integrated and dynamic nature, the Mauritius Model allows for a cross sectoral analysis of the impacts of the energy policy provisions, with simulations running from 1990 to 2025.

This is important when operating in such a rapidly changing environment and volatile time.

The project included continuous group modeling sessions and daily exchanges with key stakeholders, to end with a two-day workshop and with a presentation to the Deputy Prime Minister of the Republic of Mauritius.

Results of the analysis proved to be of considerable value to the Ministry of Renewable Energy and Public Utilities, and led to an update of the longer-term energy policy document later approved. The utilization of an integrated, cross sectoral, national development model also served to bring together several ministries, the private sector and universities to jointly analyze results, both opportunities and challenges, arising from the implementation of the energy strategy.

More information on this case can be found in Bassi A.M. (2009). Systems modeling of long term energy policy, Mauritius. Prepared for the Ministry of Renewable Energy and Public Utilities, Republic of Mauritius, and UNDP Country Office Mauritius and Seychelles, Port Louis.

Client Ministry of Renewable Energy and Public Utilities, Mauritius
Authors/Consultants Bassi AM, Bainac K, Bokhoree C, Deenapanray P

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National Airspace System

National Airspace System

For the US Federal Aviation Administration, Ventana developed a comprehensive National Airspace System (NAS) Strategy Simulator. The simulator provides a framework to evaluate infrastructure and regulatory strategy.

To achieve realism without getting bogged down in massive detail, the model aggregates participants into communities, each acting in its own interests.

The model takes a high-level approach to understanding when different system constraints become active, in order to evaluate potential policies for their system-wide effects. This strategic decision support system has been used to assist the FAA’s COO transition to a Performance Based Organization, enable the analysis of policies that guide NAS strategic operations management, understand future revenues from alternate ticket tax policies, and understand the impact on cost of operations of different industry demand scenarios. During this work Ventana incorporated contributing work from five major research universities.

Client US Federal Aviation Administration
Authors/Consultants Ventana Systems

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Strategies to Improve Freight Railroad Performance

Strategies to Improve Freight Railroad Performance

An SD model was developed to assist the company in strategic planning.  Freight railroads in the US in the late 1990s had chronic problems with on-time service performance, which, in turn, generate costs and tie up capacity.

  When capacity is already tight, train delays can lead to a vicious cycle, and in the worst case to prolonged gridlock, as occurred with Union Pacific in 1997

  Railroad cars went missing, crossings were blocked, major terminals congested, and customers factories closed, leading to customer lawsuits.  Increasing demand and shifts in demand among different lines of business (merchandise, coal, automobiles, train-to-truck intermodal) complicate the picture further.

 

The SD model helped the client understand how to avoid congestion problems and improve on-time performance over a three-year time horizon of increasing demand growth.  It suggested that solutions of three types were required: (1) capital solutions to add track, terminals, and equipment; (2) demand management to make seasonal adjustments and better allocate limited car capacity; and (3) operating solutions that could involve increasing the number of cars per train, establishing more reliable schedules, creating more flexibility in pick-up and delivery times, and improving productivity.

Client a major freight railway company (CSX Transportation)
Authors/Consultants Homer JB, Keane TE, Lukiantseva NO, Bell DW

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Projecting Motorcycle Parts and Accessories Sales

Projecting Motorcycle Parts and Accessories Sales

For planning and strategy purposes, the company needs to be able to project parts and accessories revenues several years into the future.  These revenues are generated by shipments from the factory to dealers.  In the mid-1990s, these shipments became harder to project, as dealer incentives were phased out.  An SD model helped the client understand and anticipate better what was going on with consumer demand at the retail level.  Demand for parts is a function of several factors, one of which is the average number of miles driven by consumers, associated with wear and tear, breakdowns, and collisions. 

The company was concerned, based on one imperfect type of data, that miles driven was declining rapidly and would lead to a significant contraction in parts demand.  Through a careful triangulation of other data and stock-flow logic, the model led to the conclusion that miles driven may be declining but not rapidly.  This analysis allowed the company to better project parts and accessories sales.

Client a large US manufacturer of motorcycles
Author/Consultant Homer J

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Publication

Homer J.  Structure, Data, and Compelling Conclusions: Notes from the FieldSystem Dynamics Review, 13(4): 293-309, 1997.

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Keep on rolling – managing a large rail improvement project

Keep on rolling – managing a large rail improvement project

Case summary

The London Underground carries up to 4 million passengers a day, and required a major upgrade involving new trains and signalling, plus much additional engineering work. A working system must be maintained during the upgrade, requiring a complex migration process to be planned and implemented. The service operators receive financial penalties for poor system performance against constantly rising targets.

The system dynamics project captured progress on train introductions and engineering work, their impact on system performance, and the resulting financial implications. The model enabled management to assess different options for work scheduling against changing conditions of access to the system they were improving.

Client London Underground
Authors/Consultant Steve Curram, David Exelby, and Jocelyn Lovegrove

Do you want to know more?

Links to articles, presentations or models:

Keep on rolling – understanding the migration dynamics of a large rail improvement project Link to the Paper

For further information, contact Steve Curram at DAS Ltd: www.das-ltd.co.uk

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C-ROADS

C-ROADS

The Dynamics of Climate Change: Understanding and influencing the planet’s future (October 8, 2013)

Presented by Andrew Jones, Co-Director, Climate Interactive

Presentation slides: Dynamics of Climate Change slides

Description: Learn how world leaders are using C-ROADS in global climate negotiations C-ROADS is an award-winning computer simulation that helps people understand the long-term climate impacts of policies designed to reduce greenhouse gas emissions. World leaders are using the model in global climate negotiations. In this interactive session, Andrew Jones, Co-Director of Climate Interactive, introduces participants to C-ROADS and describes how it can be used by others to understand and test their own scenarios or conduct real-time policy analysis. This webinar is the first in the Big Data, System Dynamics, and XMILE webinar series jointly sponsored by IBM, isee systems, and the OASIS XMILE Technical Committee.

The Official Website

climateinteractive.org is the official website that covers all information about this brilliant project including the latest news, simulators and learning tools, videos, etc.

The Issue You Tackled

Negotiations have failed even though scientific understanding of climate change and the risks it poses ha s never been stronger. The failure of global negotiations can be traced to the gap between the strong scientific consensus on the risks of climate change and widespread confusion, complacency and denial among policymakers, the media and the public.

What You Actually Did

The C-ROADS model is designed to address these issues and build shared understanding of climate dynamics in a way that is solidly grounded in the best available science and rigorously non-partisan, yet understandable by and useful to non-specialists, from policymakers to the public.

The Results

C-ROADS:

  • tracks GHGs, including CO2, CH4, N2O, SF6, halocarbons, aerosols and black carbon;

  • distinguishes emissions from fossil fuels and from land use and forestry policies;

  • allows users to select different business-as-usual (BAU) scenarios, or to define their own;

  • enables users to capture any emissions reduction scenario for each nation portrayed;

  • reports the resulting GHG concentrations, global mean temperature change, sea-level rise, ocean pH, per capita emissions and cumulative emissions;

  • allows users to assess the impact of uncertainty in key climate processes;

How to Work With The Model?

Video tutorials are available online to guide use

Name Climate Rapid Overview And Decision Support
Modelers John StermanThomas FiddamanTravis Franck, Andrew Jones, Stephanie McCauley, Philip Rice, Elizabeth Sawin, and Lori Siegel
Model To get the model, please follow this link.
Client/Participant Please click here.
Client Type NGO

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Climate interactive: the C-ROADS climate policy model. Download
Management flight simulators to support climate negotiations Download
Communicating climate change risks in a skeptical world Download
The Climate Scoreboard shows the progress that national contributions (INDCs) to the UN climate negotiations will make assuming no further action after the end of the country’s pledge period (2025 or 2030). Scoreboard
World climate: a role-play simulation of climate negotiations Download

  

A Big Boost for the Climate Summit

An editorial in the New York Times about the climate summit in Paris, mentions C-ROADS team analysis of Intended Nationally Determined Contributions (INDC). Please follow this link to read this article in the NYT.

Offers for Paris Climate Talks Would Reduce Warming by 1°C

Climate Interactive’s Climate Scoreboard analysis, produced in partnership with the Massachusetts Institute of Technology Sloan School of Management (MIT Sloan), shows that the intended nationally determined contributions (INDCs) put forward in advance of the UN climate talks this December make a sizeable contribution towards curbing global emissions and limiting warming. However, the offers need to be paired with further action if warming is to be kept below the 2°C target, avoiding the worst impacts of catastrophic climate change. Please see the full news release of their new analysis of the expected impact of the emissions pledges nations have made in the run up to Paris. The climate scoreboard is an embeddable widget that people can embed on their sites, blogs, etc. and will automatically update as analysis is revised when new pledges come in. The New York Times and in Science Magazine Science Insider (dated September 28, 2015) have pick up this story so far.

Climate Interactive announced the World Climate Project at a Back-to-School Climate Education Event at the White House.

The World Climate Exercise is a role-playing simulation game that puts teams, classrooms, and communities into the role of international climate negotiators to create a pathway to solutions that limit global warming. Through these simulation games, Climate Interactive plans to reach more than 10,000 people by December 2015, when nations will come together to finalize a global agreement on climate change in Paris. (Aug 2015)

Professor John Sterman and Climate Interactive featured in film “Disruption”

The film Disruption features incredible and informative interviews from scientists, activists and leaders—including Climate Interactive partner John Sterman of MIT. The film was released in advance of the People’s Climate March, the largest climate march in history, in the streets of New York City on September 21, 2014. (September 2014)

System Dynamics Application Award

The System Dynamics Applications Award is presented by the Society every other year for the best “real world” application of system dynamics. The Society awarded its 2013 Applications Award to John Sterman, Thomas Fiddaman, Travis Franck, Andrew Jones, Stephanie McCauley, Philip Rice, Elizabeth Sawin and Lori Siegel for their work Climate Interactive: The C-ROADS Climate Policy Model. To see the citation that was made by Brad Morisson at the conference, please follow this link(Jul 2013)

Professor John Sterman wrote an article in Climate Progress

It’s a great short article by John Sterman articulating why it is crucial to “hold our feet to the fire” WRT +2C maximum global warming target (i.e., to promote carbon emissions mitigation), while being careful, skeptical and perhaps even averse to climate resilience initiatives (i.e., to avoid engaging in adaptation to climate change). This article is contemporary, and more relevant as each day passes by without a global commitment to limit climate damage to a level that adaptation becomes pertinent. Please follow this link to find the article. (Jul 2013)

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Prism

Prism

The Issue You Tackled

At least 70% of deaths among Americans each year are from chronic diseases, and their direct and indirect costs are more than 1 trillion dollars per year. Governmental health agencies are in a position to promote strategies to prevent and manage chronic disease, but identifying the most effective and economical strategies is often difficult. To help health agencies better plan and evaluate interventions, the CDC and the NHLBI funded the creation of the Prevention Impacts Simulation Model (PRISM).

What You Actually Did

PRISM is a relatively large System Dynamics model that is used to simulate trajectories for health and cost outcomes for the entire U.S. population from 1990 to 2040, and has also been applied to represent other national and local populations. Interventions are in several broad areas: medical care, smoking, nutrition and weight loss, physical activity, emotional distress, and particulate air pollution. These interventions act through a range of channels such as access, price, promotion, and regulation. The diseases and conditions modeled in detail include heart disease, stroke, diabetes, hypertension, high cholesterol, and obesity, and the model also accounts for cancers and respiratory diseases related to smoking, obesity, poor nutrition, and physical inactivity.

The Results

The model reports summary measures of mortality and years of life lost as well as the consequent medical and productivity costs of the chronic diseases and conditions modeled. Local and federal health officials have used PRISM throughout its development, and its applications continue to grow in number and variety.

Name Prevention Impacts Simulation Model (PRISM)
Modelers Jack HomerKristina WileGary HirschJustin Trogdon, Amanda Honeycutt, Bobby Milstein, Diane Orenstein, and Lawton Cooper
Client/Participant Centers for Disease Control and Prevention (CDC) and National Heart, Lung, and Blood Institute (NHLBI)
Client Type Government

Do you want to know more?

Related Publications

Using simulation to compare established and emerging interventions to reduce cardiovascular disease risks in the United States. Download
Using simulation to compare 4 categories of intervention for reducing cardiovascular disease risks. Download
From model to action: using a System Dynamics model of chronic disease risks to align community action. Download
A ‘whole of system’ approach to compare options for CVD interventions in counties Manukau. Download
Proceedings from the workshop on estimating the contributions of Sodium reduction to preventable death. Download
A System Dynamics model for planning cardiovascular disease interventions. Download
Simulating and evaluating local interventions to improve cardiovascular health. Download
Modeling the local dynamics of cardiovascular health: risk factors, context, and capacity. Download

Did You Know?

System Dynamics Application Award

The System Dynamics Applications Award is presented by the Society every other year for the best “real world” application of system dynamics. The Society awarded its 2011 Applications Award to Jack Homer, Kristina Wile, Gary Hirsch, Justin Trogdon, Amanda Honeycutt, Bobby Milstein, Diane Orenstein and Lawton Cooper for their work Prevention Impacts Simulation Model (PRISM) for Chronic Disease Policymaking. To see the citation that was made by James Lyneis, please follow this link. To see the slides that were used in the 2011 ISDC, please click here(Jul 2011)

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Litton Industries Uses System Dynamics Simulation to Win a $500M Settlement in Shipbuilding Project Dispute

Litton Industries Uses System Dynamics Simulation to Win a $500M Settlement in Shipbuilding Project Dispute

Litton Industries Case: Part 1

(Narrated by Ken Cooper) 11:28 minutes

In 1980, Ken Cooper published his paper “Naval Ship Production: A Claim Settled and A Framework Built,” that described the now famous Litton Industries case. This case yielded a $500 million dollar settlement for Litton and launched the largest claim ever of System Dynamics commercial practice. Additional details for this case in Litton Industries in the Case Repository.

Litton Industries Case Part 2 – The Back Story

(Narrated by Ken Cooper) 4:05 minutes

Ken Cooper narrates interesting aspects of the Litton case that have never appeared in the published literature.

 

 

The Issue You Tackled

The Litton shipbuilding project modeling established lasting precedents on several fronts, ones that go far beyond winning $500 million for the client in a strongly contested legal battle. (See “Naval Ship Production: A Claim Settled and a Framework Built”, Kenneth Cooper, Interfaces, Vol. 10, No. 6, December 1980.)

In the System Dynamics world, it was the first large-scale modeling of a complex project. The Litton project modeling work, which began in 1976, introduced the basic dynamics, including the core “rework cycle”, seen in project models that have followed in the decades since. Indeed, project modeling has become one of, if not the most studied and practiced domains of SD modeling in the world.

This unprecedented use of System Dynamics in support of a legal dispute models the history of a project and poses the what-if question, “What would have happened, but for…?”. This became the most powerful means of quantifying damages, the “gold standard” for complex contract disputes.

The work raised awareness of System Dynamics in other arenas, from publications in project and engineering management journals, to the legal world, to the management science world outside SD (where it won multiple awards), to corporations in many industries facing persistent project performance problems, and beyond.

The story here focuses on the issues at stake for the client, and the seminal project that launched project modeling in System Dynamics.

What You Actually Did

The Litton work came to have large implications for arenas in business, law, academia, and the field of System Dynamics itself. But the origin of the work really begins with one person at Litton who was determined to find a better, more defensible, more accurate means of quantifying and explaining project cost and schedule impacts. The “story behind the story” of the Litton work illustrates the importance of an executive champion who is willing to venture out from the easy traditional path despite high stakes and formidable opposition.

The Results

The Litton claim modeling work ushered in an entire domain of System Dynamics modeling of project and program management. Not only did Litton remain an active SD client for two decades (all of which was proactive management aid), but the work was adopted by other shipyards, many aerospace contractors, construction firms, automobile companies, and more. And that was all at one SD firm. Project modeling has gone on to become one of, if not the, most studied and practiced areas of SD modeling in the world.

The “rework cycle” was not named such until well over a decade beyond the first 1980 publication, in a 1993 series of papers*, but its structure as designed for the Litton model in the 1970s remains a centerpiece of project models, one that has stood the test of time (decades) and hundreds of applications.

*“The Rework Cycle: Why Projects are Mismanaged” and “The Rework Cycle: How it Really Works…and Reworks…”, both published in PMNetWork February 1993, and “The Rework Cycle: Benchmarks for the Project Manager”, Project Management Journal, March 1993. Both PMNetWork and Project Management Journal are publications of the Project Management Institute. Ken’s Rework Cycle series was selected as among the best published papers of the year, and was combined and published in its entirety as a Special Report in Engineering Management Review, Fall 1993.

Name Modeling with Litton Industries
Modelers Kenneth Cooper
Client/Participant Litton Industries
Client Type Corporation
The Official Website For added information, or with any questions, see CooperSDNetwork.com, or contact Ken via email: Ken.Cooper@CooperSD.com

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Related Publications

Naval Ship Production: A Claim Settled and a Framework Built Download
The Rework Cycle: Why Projects are Mismanaged Download
The Rework Cycle: How it Really Works…and Reworks… Download
The Rework Cycle: Benchmarks for the Project Manager Download
The $2,000 Hour:How Managers Influence Project Performance Through the Rework Cycle Download
Managing the Dynamics of Projects and Changes at Fluor Download

Did You Know?

Franz Edelman Award and System Dynamics Application Award

The first published description of the project model (and the structure that would later become known as the Rework Cycle) was in The Institute of Management Sciences Journal Interfaces in December 1980, “Naval Ship Production: A Claim Settled and a Framework Built”, Kenneth Cooper. The work won global recognition in the Institute’s (now INFORMS) Franz Edelman competition for the best applications of any form of management science in the world.

Thirty years later, Ken received the same Edelman award recognition for his work with Fluor Corporation on a SD model-based system to avoid project disputes. See “Managing the Dynamics of Projects and Changes at Fluor”, Kenneth Cooper; this was also the 2009 System Dynamics Society Applications Award winner. Please review the Fluor Case here.

Commercial Applications of System Dynamics as Oral Histories page

In the winter of 2016, Ken Cooper visited the System Dynamics Society home office. During that meeting, a series of videos were recorded in which David Andersen interviewed Ken Cooper. In these videos, Ken narrates several of the high impact and more interesting commercial applications from his distinguished career. This series of nine short videos can now be found on the Commercial Applications of System Dynamics as Oral Histories page.

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