About a year ago bottlenecks were plaguing Southwest Airlines's cargo operations, frustrating handlers and delaying flights. Known for unconventional approaches such as open seating, Southwest turned to the Bios Group, founded in 1996 by Santa Fe Institute luminary Stuart A. Kauffman to transform academic notions about complexity into practical know-how. Bios simulated Southwest's entire cargo operation to decipher so-called emergent behaviors and lever points--the key elements in complexity science. The goal was to find which local interactions lead to global behaviors and, specifically, what part of a system can be tweaked to control runaway effects.
Bios deftly built an agent-based model, the favored device of complexity researchers. Software agents--essentially autonomous programs--replaced each freight forwarder, ramp personnel, airplane, package and so on. The detailed computerized model revealed that freight handlers were offloading and storing many packages needlessly, ignoring a plane's ultimate destination. To counteract the emergent logjam, Bios devised a "same plane" cargo-routing strategy. Instead of shuffling parcels like hot potatoes onto the most direct flights, handlers began simply leaving them onboard to fly more circuitous routes. The result: Southwest's freight-transfer rate plummeted by roughly 70 percent at its six busiest cargo stations, saving millions in wages and overnight storage rental.
This article was originally published with the title Complexity's Business Model.