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Gloucester Community Development Corporation. Challenges. “You cannot build a model without a good understanding of the system you are going to simulate…” Jim Hines 2002. Purpose of Today’s Presentation. Share some insights in using SD for client projects

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Gloucester Community Development Corporation

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  • “You cannot build a model without a good understanding of the system you are going to simulate…”

Jim Hines 2002

purpose of today s presentation
Purpose of Today’s Presentation
  • Share some insights in using SD for client projects
  • Ask you for a peer-group review, i.e. which part of the following presentation could lead into a publishable paper?
the team
The Team

Our Client:

Dr. Carmine Gorga, Executive Director GCDC

Dr. Steve Kelleher, Marine Institute Massachusetts

Dr. Damon Cummings, a former Professor of hydrodynamics

and control theory at MIT

Joe Sinagra, Fishermen


Jeroen Struben, PhD Student MIT

SangHyun Lee, M.S Student Intelligent Engineering MIT

Peter Otto, PhD Student UAlbany

  • Introduction to the Project
  • A Step-by-step approach towards a model
    • Decomposition of the system
    • Reflection of current situation and Problem Definition
    • Key Variables
  • Scope and understanding
    • Dynamic Hypotheses
    • Overview on the different Sectors
  • Model initiation: building one Dynamic hypothesis
    • Model Components
    • Base model Behavior
gloucester s business goal
Gloucester’s Business Goal

To establish a commercialized fisheries operation Gloucester Fish, Inc. that utilizes a novel process that extracts fairly pure protein from underutilized fish species to potentially increase their value in an effort to revitalize the present fishing industry in Gloucester.


A substitute for crab meat….

surimi market
Surimi Market
  • Total market: 760,000 metric tons, growing at 10 – 20% per year
  • Japan represents 60 % of the market
  • Desired output for Gloucester’s surimi factory is 10,000 metric tons
phase 1 learning
Fishing fleet

# Fishermen

# boats needed for Surimi

Total # boats

Attractiveness of other fishing targets

Total fishing capacity

Willingness to join

Earnings per Fisherman

Area utilization


Total catch

Cost per trip

Equipment extension cost


Water availability

Water costs per unit

Water pollution

Perceived fish stocks

Actual fish stocks

Sustainable Yield

Community concerns


Potential market-size

Product attractiveness

Unit price

Product characteristics


Product quality (grade)

Product diversity

Unit costs


Barriers to entry

Number of competing ports

Total competing capacity

Accessibility of cross waters

Phase 1: Learning
  • Launch and operate
  • Desired capacity
  • Startup costs
  • Total Capacity
  • Extendibility
  • Marketing efforts
  • Total labor provision
  • FDA approval time
  • Total Sales
  • Diversification
  • Profitability
  • Finance and Community,..
  • Total value added
  • Directional
  • Private investor fraction
  • Risk of disintegration
  • Employee involvement
  • Reinvestment fraction
  • Government taxes
  • Community acceptance
phase 2 reflection
Phase 2: Reflection
  • Meeting with client to confirm problem statement and initial reference modes
problem statement objective
Problem Statement “Objective”
  • The decline of traditional fish species and the curtailing of fishing efforts by the Government require the fishing industry of Gloucester to identify alternative resources to sustain their industry…

…A Surimi factory – harvesting fast renewable fish stock – should compensate for the missing revenues from traditional white fish until their stock returns to a sustainable level…


Total Revenues

Revenues from

White Fish

Revenues from


1996 2002 2005 2012


Problem recognition… a response to a downward spiral…

  • Dynamics of “Total Potential for harvesting” is defined by the combined availability of and capacity for dark and white fish
problem statement
Problem Statement
  • Sustainability of Community depends on total revenues, stability, spread of revenues

Community QoL

  • H: Enough renewable resources
  • (both white and dark)
  • Reinvestment in plant
  • Rising stability reinforces happiness
  • F1: Too much success
  • Increasing revenues,
  • Increasing competition,
  • Stock depletion,
  • Unequal/unfair profits
  • F2: Lack of throughput
    • No Market
    • Delays in takeoff
    • Competition from other communities or
    • Fish stock takes longer to renew

1992 2002 2012


key variables

Operations Sector

Community Sector

Potential Factory Output

Potential Demand

Potential Return on


Revenues from Fishing

Sustainability of community

Attractiveness to Join


Resource Sector

Fleet Composition

Total allowable Catch (TAC)

# Fleet Days at Sea

Key Variables

Key Variables
phase 3 agreement
Phase 3: Agreement
  • Presentation of dynamic hypothesis
  • Definition for the scope of the project

Dynamic Hypothesis

  • Potential Factory output: The potential factory output should be determined by the availability of fish stock. Pushing the system based on the attractiveness will finally limit the factory output.

Potential factory




Operating profit

Dynamic Hypothesis

  • Revenues per boat: If operating profit of the factory is positive, it can reinvest in equipment and processing capabilities to increase attractiveness and effectiveness, which could cause too much pressure on the fish stocks.

Revenues per boat



Total Revenues

from fishing






1992 2002 2012


Dynamic Hypothesis

  • Revenues from fishing: Revenues can go up and remain high at sufficient re-investment in the plant, in order to maintain diversity in input and output. External partners might lead to high volume low quality through put



1992 2002 2012


Dynamic Hypothesis

  • Sustainability of Community: Too much success of the plant, can bring some revenues, while many have to fish for the low-stock white fish






phase 4 conceptualizing the model
Phase 4: Conceptualizing the model
  • First draft was presented to the client to:
    • Confirm the causal loop diagram
    • Focus on sensitive variables and parameters
    • Re-define scope of the model
the dynamic hypotheses around the key variables have been merged into three sectors
The Dynamic Hypotheses around the key variables have been merged into three sectors
  • Resource Sector
  • Community Sector
  • Operations Sector

Variables and links in Dynamic hypotheses themselves, generally cover more sectors!!

we have used the potential factory output hypothesis as a starting point for the model
We have used the “Potential Factory Output” hypothesis as a starting point for the model

The model of the hypothesis is built up of three main loops:

  • Factory Capacity and Output
  • Fleet Capacity
  • Resource Dynamics

Other hypotheses will be constructed on top of this


Dynamic Hypothesis

  • Potential Factory output: The potential factory output should be determined by the availability of fish stock. Pushing the system based on the attractiveness will finally limit the factory output.

Potential factory



basic model behavior
Basic model Behavior
  • Basic Demand
    • Step demand increase towards 15000 Surimi in the 10th month
  • Resource Depletion
    • Same case, with a lower fertility of pelagis

Lower Resource Fertility: Resource Depletion

Dynamics can be very sensitive to resource parameters

learning s along the way

A clear problem statement can act itself as true insight

Quote:“Opportunities for inshore fishing?!”

Quote: “Looking ahead to understand potential pitfalls has never been done before”

Quote: “Visualizing the connections between the variables helped us to better understand the dynamics in the system”

Comments / Issues

A clear, true problem statement is crucial. This implies effective kick-off meeting(s) and being in the driver-seat

Early involvement of true-stakeholders / knowledge experts is crucial for a good (mental) model

Using reference modes and causal loop diagrams makes it much easier for the client to understand the problems and dynamics

Learning’s along the way
your task
Your Task
  • Which part of this project would be of interest for a broader SD community, i.e. do you think we could hit a placement in the SD Review?