TOCICO

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. He then references a few case studies, shares 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.