Systems Engineering Based Enterprise Transformation - INPE 12 09 ENGEFLUX SE WEEK fv... · Systems...

Systems Engineering BasedEnterprise Transformation

George W. L. Sousa, PhDGeorge W. L. Sousa, PhD

© 2011 ENGEFLUX | developing high performance enterprises | all rights reserved

George W. L. Sousa, PhDGeorge W. L. Sousa, PhD

Introduction

George W. L. SousaINCOSE Ambassador in Brazil

Co-Founder & CEO at Engeflux Engenharia de Sistemas Ltda

Business Development Director at Fertilizantes Aliança Ltda

Co-Founder & Vice President at Enerflux Agroenergia Ltda


Co-Founder & Vice President at Enerflux Agroenergia Ltda

Invited Professor on Production Systems Engineering at PUCGOIÁS

PhD, Industrial & Systems Engineering (VIRGINIA TECH, 2004)

MS, Production Engineering (USP São Carlos, 1999)

Production Engineer (USP São Carlos, 1997)

Program

INTRODUCTION� Enterprises as Systems� Basic Principles of Good Enterprise Transformation� Transformation as a Learning Process

STRUCTURE AND PERFORMANCE• Performance Visibility


• Performance Visibility• Performance = F (Structure)• Strategic Design Decisions

SETTING UP A TRANSFORMATION PROCESS• Top Management Commitment• Organizational Structure• Engineering Approach

COMMENTS & QUESTIONS

Enterprises

Enterprises are an expression of human


Enterprises are an expression of humanorganization for the satisfaction of needs.

Some History

Time Managerial Achievements

5000 B.C. Sumerian priests were keeping inventories, loans and tax transactions

4000 B.C. Egyptians were using basic concepts of planning, organization and control

3000 B.C.

2000 B.C.

1000 B.C. Ideas of minimum wage and managerial responsibility stated in Code of Hamurabi


1000 B.C. Ideas of minimum wage and managerial responsibility stated in Code of HamurabiHebrews were using exception principle and designating staff positions within the systemThe Chineese had a fully develped government system

0

1000 The Italians were practicing double entry bookeeping and cost accountingEuropean Industrial Revolution, beggining in the British Isles (specialization of labor)Birth of the “American Production System” (machine tools and interchangeable parts)Stationary and moving assembly lines (management theories start to appear)MRP, JIT and OPT

2000 (systems engineering)

Source: Adapted from SIPPER, D. and R. L. BULFIN Jr. (1997, p.2-3). Production Planning Control and Integration. New York, NY USA, McGraw-Hill.

Management Maturity and Population Growth


Why we need high performance enterprises?


Humanity needs more energy.



All types of energy.



And more food.



And more water.



In a context of amazing technologicalachievements!



But also of increasing complexity andfrequent insatisfaction.



And undesirable effects such as hunger.



Thirst.



And dangerous dispute for scarce resources.

Enterprises

Enterprises are an expression of humanorganization.


organization.

Organizations appear when individualsunite in search of a purpose.

Global Village: web of enterprises


Figure source: (04/12/2011) http://www.history.ucsb.edu/faculty/marcuse/classes/2c/texts/GlobalVillageHandout063.htm

Enterprises as Systems

Enterprises are engineered systems.


Enterprises are engineered systems.



System: “a combination of interactingelements organized to achieve on or morestated purposes”.

Source: INCOSE (2007, p.1.5). Systems Engineering Handbook: a guide for system life cycle processes and activities.



ProcessesInputs Outputs

MatterEnergy

Information

MatterEnergy

Information



System of Systems: “interoperatingcollection of component systems thatproduces results unachievable by theindividual systems alone”.

Source: INCOSE (2007, p.2.2). Systems Engineering Handbook: a guide for system life cycle processes and activities.


Enterprise systems exist in a state of flux

i.e., continuous change along its life cycle.


i.e., continuous change along its life cycle.

Enterprise transformation is not optional, but critical to its ability to survive, evolve

and create value.

Source: (04/12/2011) http://oxforddictionaries.com/definition/flux

Program


STRUCTURE AND PERFORMANCE� Performance Visibility


� Performance Visibility� Performance = F (Structure)� Strategic Design Decisions

SETTING UP A TRANSFORMATION PROCESS� Top Management Commitment� Organizational Structure� Engineering Approach


1 of 5 | Top Level Management Commitment


Figure Source: (04/12/2011) Adapted from http://www.managementstudyguide.com/management_levels.htm.

2 of 5 | Differentiate Development fromOperation

(aircraft analogy)


OperationDevelopment

3 of 5 | Recognition of Intelligence


Enterprises as intelligent organisms.Figure Source: (07/12/2011) Adapted from http://blog.hpgroupseo.co.uk/google-analytics-intelligence/4561717

4 of 5 | Creative Tension


Figure Source: (04/12/2011) Adapted from http://www.lencoproductions.com/VisioningWKS_1.htm

5 of 5 | Transformation as a Process

PlanAct


Plan

DoCheck

Act

Program







Learning Process

REAL WORLD

INFORMATION FEEDBACKDECISIONS


FEEDBACK

MENTAL MODELS OF

THE REAL WORLD

Source: Adapted from STERMAN, J.D. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex World. Irwin McGraw-Hill. Boston-MA, EUA.

Learning Process


Figure Source: (09/12/2011) Adapted from http://www.cksinfo.com/construction/tools/hammers/index.html andhttp://www.made-in-china.com/showroom/alicehard/product-detailLbMJyIcUAqrZ/China-Common-Nail-6.html

If all we have is a hammer...

... everythingwe see is a nail.

Learning Process

REAL WORLD


VIRTUAL WORLD(theories & models)


FEEDBACK

STRATEGIES, STRUCTURES AND DECISION RULES

MENTAL MODELS OF

THE REAL WORLD

Source: Adapted from STERMAN, J.D. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex World. Irwin McGraw-Hill. Boston-MA, EUA.

Program









Increasing sophistication of performance criteria from stakeholders.



What is enterprise performance?

Performance is behavior over time.


Expressed by meaningful indicators.

Performance Visibility


Time

Time

Performance Visibility

We need to track enterprise performance over time to ensure overall system effectiveness,


time to ensure overall system effectiveness,

i.e. overall degree of mission accomplishment.

Program







Performance

time

Y

timeX


time

Z

time

P

time

W

time

Q

Structure

peopleMaterials

resourcessoftware


resourcesINFORMATION

energyEQUIPMENT

Processes

software

Performance = F (Structure)

time

Ytime

X

peopleMaterials

resourcessoftware


time

Z

time

P

time

W

time

Q

resourcesINFORMATION

energyEQUIPMENT

Processes

software


time

Ytime

X

Product breakdown Macro processes

LucroOpe ra ci onal

(EBITDA)Recei taTota l

CustosOperaci ona i s

EtanolProdução de

EtanolEntrega de

Etanol

Demanda Mens a l por Etanol

+

De mandapor Ca na

+

Custo deProduçã ode Etanol

+

++Rendime nto de Etanol na Cana

-

Cus to Uni tá rio de Produção de Etanol

+

Preço Unitári o do Eta nol

+

Ca ixa In ici al

Rendimento Mensa l de Ca na na La voura

LucroEconômi co

Impostos Cus to doCa pi ta l

- -

Fl uxo deCai xa Livre

Depre ci a çã o+ -

Mudanças noCa pi tal Fi xo e

de Gi ro

-

+

Capa ci dade deProces sa me nto de

Ca na

+

Estoque Des eja do de Ca na Di sponível Di ferença e ntreEs toque de

Ca na Des e jado eDi s ponível

++

Ca pa ci dadede Entrega de

Etanol

Capa cidade deProduçã o de

Etanol+

+

++

+

Carga Míni ma de Eta nol

-+Te mpo Di s poníve l no Ano pa ra Proce s sa mento de Ca na

-

Es toque Mínimo de Ca na para Proce s sa mento

+

Número de Mes es no Ano+

Capaci dade Má xi ma de Es toca ge m

-

+

+


time

Z

time

P

time

W

time

Q

Cana Di s poníve lpara Proce ss a mentoDis poni bi l i zação

de Ca naProcess a mento

da Ca na

+

Custo deProduçã o de

Ca naCusto Uni tá rio de Dis poni b il i za çã o de Cana

Área deLa voura

Impl anta daImpl antaçãode La voura

Encerra me ntode Lavoura

Demanda Anualpor Áre a de

Lavoura

+

Custo deImpl antaçãoda Lavoura+

Cus to deEnce rra me nto

da Lavoura+Cus to Uni tá rio de Ence rramento

Custo Uni tá rio de Impl a nta çã o

+

+

Rendimento Mensa l de Ca na na La vouraB: Processamento da Cana Disponív

el

B: Disponibilizaçãode Cana

Ca pa ci da dede CCT

+Ca na Di s ponível

em CampoProduçã ode Ca na +

+

-

+

+

Cus to deDi s poni bi l ização

de Ca na

+

+

Di fere nça deÁre a

+

+

-B:

Implantação de Lavoura

B: Encerra

mento deLavoura

+

Prazo pa ra Impl antação de La voura

+

Pra zo pa ra Des tru i çã o de La voura

+

Di s ponível

-

+ -

<TIME STEP>

+

+

Encerra me ntode Lavoura para

Renovaçã o

Te mpo de Vida Úti l da Lavoura

Te mpo Míni mo de Tra ba l ho de CCT

-

Custo de ge stãoda l a voura

Custo uni tário de ges tã o da la voura

Causal loop diagramswith stocks and flows

Organizational chart

Control architectures

Facilities specification


(aircraft analogy)


Figure Source: (09/12/2011) Adapted from http://www.rctoys.com/pr/2008/07/02/rc-model-airplane-aerobatics-part-1/ and http://www.123rf.com/photo_6580317_paper-airplane-makes-a-loop-over-the-city.html and airlinergallery.nl

Program







Enterprise Design Decisions


Source: Adapted from NAYLOR, J.B. et al (1999). Leagility: Integratinf the lean and agile manufacturing paradigms in the total supply chain. International Journal of Production Economics., 62, p. 107-118.

Enterprise System

IdentifyNeed

Design Solution

Build Solution

Use Solution

Retire solution

Design and Build


Design and Build Production

SystemOperate Production System

Design and Build Support and

Maintenance System

Operate Support and MaintenanceSystem

Source: Adapted from BLANCHARD, B. S. & FABRYCKY, W. J. (1998,p.22). Systems Engineering and Analysis.

Third Edition. Prentice Hall, Upper Saddle River, New Jersey. Third Edition.

Enterprise System


Network of processes.

Process Triggers

PUSH(Demand Forecast)


versus

PULL(Incurred Demand)

How process flow is controled?

FLOW STOCK FLOWPUSH


FLOW STOCK FLOW PULL


FLOW STOCK FLOWFLOW STOCK STOCK FLOW






Business Case


Business Case

Sustainable Development Challenge

� 70% increase in foodproduction by 2050

� Brazil will provide the


� Brazil will provide thebiggest agriculturalproduction contributionin the next decade

� Brazilian production is expected to increase in 40% by 2019

Source: FAO (Food and Agriculture Organization) e OCDE (Organization for Economic Co-operation and Development). (June 2010).

Food and Energy Agriculture


Food and Energy Agriculture


GO

The Challenge of Sustainable Operation


Source: Goiás Multimodal Logistic Plataform. http://www.plataformalogistica.go.gov.br/plataforma/4.htm Accessed in 12/04/2011.



Source: UDOP (2004) – União dos Produtores de Bionergia (http://www.udop.com.br/mapa/geral_mapa.php?estado=go)



Water & “vinhaça” irrigation Manual harvesting

Biomass transportationMechanical harvesting

Logistics



Logistics

Fermentation containers

Distilation columns

Ethanol storage


Electricity

Bagasse

Biogas Manure

Cattle Grains


Sugar Cane Ethanol

Animal FatBiodiesel

Vegetal oil

“Vinhaça”

Responsável

Produzir Etanoltc =

Responsáve;

ConsumirEtanoltc =

Etanol

Resp

on

sável

Sup

rir Etan

ol

tc =

Resp

on

sável

Sup

rir C

ana

tc =

Cana

Resp

on

sável

Pro

du

zir C

ana

tc =

Resp

on

sável

Gerar

Vin

haça

tc =

Responsáve;

AplicarVinhaçatc =

Bagaço

Res

po

nsá

vel

Ger

ar

Bag

aço

tc =

Responsáve;

ProcessarBagaçotc =

Resp

on

sável

Sup

rir Eletricid

ade

tc =

Resp

on

sável

Sup

rir Etano

l C

eluló

sicotc =

Responsável

Engordar Gadotc =

Responsáve;

ConsumirGadotc =

Gado

Res

po

nsá

vel

Sup

rir

Bag

aço

tc =

Vinhaça

Resp

on

sável

Sup

rir G

ord

ura

tc =


Responsável

Produzir Biodieseltc =

Responsáve;

ConsumirBiodieseltc =

Biodiesel

Resp

on

sável

Sup

rir Etan

ol

tc =

Res

po

nsá

vel

Sup

rir

Águ

atc

=

Água

Res

po

nsá

vel

Cap

tar

Águ

atc

=

Vinhaça

Resp

on

sável

Gerar

Vin

haça

tc =

Responsável

Suprir Canais

tc =

Res

po

nsá

vel

Sup

rir

Óle

otc

=

Óleo

Res

po

nsá

vel

Ob

ter

Óle

otc

=

Resp

on

sável

Gerar

Glicerin

atc =

Resp

on

sável

Pro

cessar O

leogin

osa

tc =

Oleoginosa

Pro

du

zirO

leogin

osa

Resp

on

sável

tc =

Responsáve;

Gerar ÓleoVegetaltc =

ÓleoVegetal

Responsáve;


Responsável

Suprir Óleo Animal

tc =

ÓleoAnimal

Responsável

Processar Gordura

tc =

GorduraAnimal

Responsável

Produzir Etanoltc =

Responsáve;

ConsumirEtanoltc =

Etanol

Resp

on

sável

Sup

rir Etan

ol

tc =

Resp

on

sável

Sup

rir C

ana

tc =

Cana

Resp

on

sável

Pro

du

zir C

ana

tc =

Resp

on

sável

Gerar

Vin

haça

tc =

Responsáve;

AplicarVinhaçatc =

Bagaço

Res

po

nsá

vel

Ger

ar

Bag

aço

tc =

Responsáve;

ProcessarBagaçotc =

Resp

on

sável

Sup

rir Eletricid

ade

tc =

Resp

on

sável

Sup

rir Etano

l C

eluló

sicotc =

Responsável

Engordar Gadotc =

Responsáve;

ConsumirGadotc =

Gado

Res

po

nsá

vel

Sup

rir

Bag

aço

tc =

Vinhaça

Resp

on

sável

Sup

rir G

ord

ura

tc =


Responsável

Produzir Biodieseltc =

Responsáve;

ConsumirBiodieseltc =

Biodiesel

Resp

on

sável

Sup

rir Etan

ol

tc =

Res

po

nsá

vel

Sup

rir

Águ

atc

=

Água

Res

po

nsá

vel

Cap

tar

Águ

atc

=

Vinhaça

Resp

on

sável

Gerar

Vin

haça

tc =

Responsável

Suprir Canais

tc =

Res

po

nsá

vel

Sup

rir

Óle

otc

=

Óleo

Res

po

nsá

vel

Ob

ter

Óle

otc

=

Resp

on

sável

Gerar

Glicerin

atc =

Resp

on

sável

Pro

cessar O

leogin

osa

tc =

Oleoginosa

Pro

du

zirO

leogin

osa

Resp

on

sável

tc =

Responsáve;


ÓleoVegetal

Responsáve;


Responsável

Suprir Óleo Animal

tc =

ÓleoAnimal

Responsável

Processar Gordura

tc =

GorduraAnimal

Program







Context


Context



Processo de Engenharia de Sistemas Organizacionais

(Organizational Systems Engineering Process)

PENSO is a registered trademark of Engeflux Engenharia de Sistemas Ltda.

Program







Top Level Management Commitment


Figure Source: (04/12/2011) Adapted from http://www.managementstudyguide.com/management_levels.htm

Transformation Dynamics

AAdminister

DDo the dumb


Source: Adapted from Harold Kurstedt´s teachings at Virginia Tech

Administer

BBuild the business

CCater to crises

Do the dumb

Management Roles

(aircraft analogy)

AB


OperationDevelopment

AAdminister

BBuild the business

Program







How to set responsibilities?

Management is often too focused onOPERATION.


We need to be sure someone takes care of DEVELOPMENT.

Enterprise System


Enterprise System

REAL WORLD


VIRTUAL WORLD(theories & models)


FEEDBACK

STRATEGIES, STRUCTURES AND DECISION RULES

MENTAL MODELS OF

THE REAL WORLD

The Developer´s Paradox


Who develops the developer?

Development Layer


DDDDEEEEVVVV EEEE LLLL OOOO PPPP MMMMEEEE

NNNNTTTT

Development Layer

PRESIDENT


PRESIDENT

DEVELOPMENT OFFICER DDDD

EEEEVVVV EEEE LLLL OOOO PPPP MMMMEEEE

NNNNTTTT

OPERATIONS OFFICER

LLLLEEEEMMMMEEEENNNNTTTT

AAAANNNNaaaaLLLLIIII

ZZZZ

PENSO: Analize | Design | Implement

PRESIDENT


IIIIMMMMPPPPLLLL ZZZZ

EEEE

D EEEE SSSS IIII GGGGNNNN

PRESIDENT

OPERATIONS OFFICER

DEVELOPMENT OFFICER

Program









ZZZZ

Problem & Solution

Problem



EEEE


ProblemDomain

SolutionDomain

Problem & Solution

How to define the best course of


How to define the best course of action?

Complexity of System Transformation

100%


IDENTIFICATION OF NEEDREQUIREMENTS ANALYSIS

INITIAL DESIGN

DETAILED DESIGN

IMPLEMENTATION OPERATION & DISPOSAL

0%

50%

Fonte: Adapted from BLANCHARD, B. S. & FABRYCKY, W. J. (1998, p.37). Systems Engineering and Analysis.

Third Edition. Prentice Hall, Upper Saddle River, New Jersey. Third Edition.

Modeling & Experimentation With the Real World


At some point, model testingrelies on faith.

Modeling & Experimentation With the Real World

At each transformation cycle, we need to be able to evaluate


we need to be able to evaluatethe impact of design and

implementation decisions in the real world.

Enterprise Transformation Process



ZZZZ



EEEE


Program







George W. L. Sousa, [email protected]


[email protected]

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