2.4 Gazz -- Gas Logistics

The name "Gazz" is a combination of two words: Gas (as the focus was on gas logistics, enabling gas flow from reservoirs to markets), and jazz (as the effort was compared to an improvisation over the gas value chain). The project team also wanted a short, striking name that would stimulate the curiosity among users and customers.

2.4.1 Background and objectives

The background of the Gazz project was a perceived need to communicate how holistic thinking within gas logistics could benefit the Statoil corporation as a whole. Decisions made in one business unit influence the performance of other units, and uncoordinated local optimization had been observed leading to non-optimal total performance.

The main objective of the project was to create a software tool that would enable any employee (and in particular, decision makers) in the company to investigate relationships between elements of the production chain and consequences of strategic decisions through active experimentation with a simulation model of the Statoil gas business: What happens if we introduce another pipeline between two production units? What if we increase the capacity of a processing plant? What if we introduce another gas storage? Hence, the objective of the project was to create an environment for enterprise modeling, and not enterprise models per se.

A main source of inspiration was the off-the-shelf simulation game SimCity (Maxis, 1996). In SimCity, the player is a city mayor and makes decisions regarding where to locate factories, power plants, police stations, houses, roads, etc. in a city. City income is generated from taxes and invested by the mayor. A set of predefined (but implicit) rules govern behavior of inhabitants of the city: If the mayor collects too much tax, people move and total taxes go down. If she collects too little, there are problems financing public services, like police, fire departments, etc. The underlying rules controlling behavior emerge to the player while playing the game.

The idea of the Gazz project was to develop a similar game for Statoil's gas business. The player could locate various constructs, like reservoirs, production platforms, pipelines, processing plants, etc., and afterwards run simulations showing the dynamics of selected variables, e.g., economic income or production volumes. The purpose was to initiate creative and strategic thinking, and function as a basis for strategic discussions within the company. Hence, even if the game was based on simulation and computation, the stress was put on being a tool for understanding both static and dynamic aspects of the gas value chain. One of the project team members stated:

"We are not going to make a system that do the thinking for people. We are going to get people on the track of something."
Investigation of the project is based on observation (taking part in 9 out of 11 project meetings), studies of project documentation (minutes from meetings, foil copies, an evaluation report) and experience with the Gazz modeling tool (being an artifact, Yin, 1989:94). A students project extending the initial version to handle methanol production and sales in addition to gas (PS, 1995) was also looked into.

2.4.2 Enterprise models

The main deliverable from the project was the computerized tool for modeling and simulation of the Statoil gas production chain. However, the focus in this presentation is the enterprise models that can be created using the tool. Development and implementation of the modeling tool is of subordinate interest.

The modeling language available to the modeler (the player) comprised physical elements of the production chain. Each element had a set of predefined attributes associated. Attributes were mainly related to physical capacities and economy (initial investments and operating costs) and could be adjusted by the modeler. Figure 2.6 provides a sample snapshot from the modeling tool interface. The vertical bar at the far left contains all main elements:

Figure 2.6: Sample enterprise model developed in Gazz

Each element in the model had a parameter sheet associated, with predefined default values. In this way, simulation could start with as little effort as possible. Each simulation could be saved as a scenario and compared to other scenarios to see how strategic decisions would influence the overall gas value chain. The behavior of enterprise models created in Gazz is deterministic, i.e., with an identical initial state and a given stimuli one will always get identical response. Hence, the game metaphor was not exploited to the fullest extent (there were no random events).

2.4.3 Organization of modeling

The Gazz game is a single-user modeling tool. Hence, there is no formal organization involved in a modeling effort. The game was intended to be distributed in the organization with a series of predefined scenarios, each illustrating a potential area for overall optimization of the gas business.

Requirements to user competence depend upon intentions of playing the game. If the purpose is to uncover the underlying rules of the game, accurate knowledge of cost parameters and capacities is not vital. Hence, one may experiment with various values and learn about qualitative properties of the models. However, if the player wants to compute correct quantitative values, detailed knowledge of actual parameters is required. The original purpose of Gazz was the qualitative aspect, i.e., to make sense of the underlying rules, not necessarily compute accurate values.

2.4.4 The enterprise modeling process

The overall process of enterprise modeling using Gazz is rather simple: Development of the Gazz modeling tool was done using Powersim simulation software (Powersim, 1996) and a commercial C library. Powersim is a modeling and simulation package for continuous-time simulation based on the concepts of stock and flow found within the system dynamics tradition (e.g., Senge et al., 1994:179ff) . A significant amount of work was spent on design and implementation. Much work was put into the game in order to hide complexity from the player and create a game with an intuitive interface.

2.4.5 Problems and particularities of Gazz

One major problem with the game was to get the underlying simulation model right. The model grew very complex in order to take into account various peculiarities of the gas production and transportation, and the results from simulations were not reliable (in the sense that one could actually loose money when simulating scenarios where the player knew that Statoil were making good money today). Hence, there was a problem of credibility. What started out as a problem of communicating qualitative relationships ("if I introduce this element here, it will influence the behavior of the element over there") turned out to be a quantitative problem ("if I change the parameter value to X over here, the operating cost of the element over there will change by an amount of Y kroner").

Another observation is that enterprise modeling in the Gazz project in effect was divided between the project team and the end user (the player): The project team developed a tailored, restricted language for the end user to utilize when modeling. The language was tailored in the sense that elements of the language are well known, concrete objects to anyone working in the petroleum business (e.g., platform, pipeline, processing plant). It was also restricted, as the different element types and their attributes were defined in advance, they could not be extended. The end users were only allowed to change parameter values, not add element types or parameters.

The project team used several concrete examples in their internal discussions. The examples illustrated different scenarios in which holistic thinking improved the overall solution as compared to sub-optimizing alternatives.