Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Search in posts
Search in pages

Go Home

Litton Wins $500M Settlement in Shipbuilding Project Dispute

Nov 3, 2020 | Cases, Transportation

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

Do you want to know more?

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.

OTHER SUCCESSFUL APPLICATIONS

RSC Uses System Dynamics to Increase HVACR Sales Against the Tide

RSC Uses System Dynamics to Increase HVACR Sales Against the Tide “Using the proven Strategy Dynamic process focused our limited resources on organizing strategic issues, identifying the critical resources, and developing the insight to more rapidly create intuitive...

Achieving a Polio-Free World Through System Dynamics Simulation

Achieving a Polio-Free World Through System Dynamics Simulation EXECUTIVE Summary This System Dynamics model underpinned a 192 country resolution to eradicate polio globally and led the Bill and Melinda Gates Foundation to give Rotary International $100 million to...

MasterCard Halts Market Share Slide With Scenario Planning

MasterCard Halts Market Share Slide With Scenario Planning The Problem MasterCard, a major credit card company, once held a dominant market position US Market Share with only one primary competitor, Visa. They woke up one day and realized that, after six years of...

Upcoming Events

2022 SDS Policy Council Meeting

2022 SDS Policy Council Meeting

Monthly meetings of the Policy Council occur on the last Wednesday of the month with the exception of conference month.  All Society members are welcome to attend.  Login to see the meeting location which will be displayed here to members 15 minutes prior to the start...

Recent Posts

Practitioner Profile: Jack Homer, Homer Consulting

Practitioner Profile: Jack Homer, Homer Consulting Welcome to Practitioner Profiles, a series of up-close blog-length interviews with experienced System Dynamics practitioners.  We have a standard set of 10 questions and let practitioners take the responses in any...

Data & Uncertainty in System Dynamics

Data & Uncertainty in System Dynamics Jay Forrester cautioned that “fitting curves to past system data can be misleading”. Certainly, that can be true, if the model is deficient. But we can have our cake and eat it too: a good model that passes traditional System...

Join us

LET US BE PART OF YOUR JOURNEY

Do you want to lead your organization into the future by overcoming paradigms and creating change? With Systems Thinking and System Dynamics you will enable powerful decision-making and find the leverage points to improve profits, strategy, efficiency, sustainability, and more.

Rebecca Niles

Talk with Us

The most efficient way to align your needs with our offerings is to schedule a meeting with our Executive Director, Rebecca Niles

Engage a Systems Consultant

Looking for a Systems Consultant? Fill out this form and we will follow up with a call and, soon enough, the right person for the job.

Experience Systems Thinking

Bring in a facilitator to unleash the power of Systems Thinking in your organization. Fill out this form for a Beer Game facilitator and join the companies, and graduate and MBA programs that play this game all over the world. Contact us if a facilitator for a different game is needed.

WPI System Dynamics Fundamentals micro-course 1

Start Learning

Join the WPI Sytem Dynamics Fundamentals Course to understand the causes of dynamic behavior at a basiic level and much more! The course is self-led and self-paced.

System Dynamics Admins
System Dynamics Admins