MIT System Design & Management Program

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MIT System Design Management Program
SYSTEM DESIGN AND MANAGEMENT
Infusing Systems Thinking Into
Organizations
JM Grace

28 Oct 2005
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STATEMENT OF PROBLEM

• Infusion and diffusion I/D
• Infusion -- to cause to be permeated with
  something to alter a condition
• Diffusion -- the spread of cultural elements
  form one area or group of people to another by
  contact
• Systems engineering and systems thinking
• Systems engineering is a branch of engineering
  that concentrates on design and applications of
  the whole as distinct from parts.. Looking at the
  problem in its entirety, taking into account all
  facets and variables and relating the social to
  technical aspects

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approach

• Lets start by drawing on concrete observations
  from I/D experiences at Arvin and ArvinMeritor
• Then lets explore the extension or generalization
  of these observations by adding your comments
  from your experiences
• Our goal is to begin to understand the infusion
  and diffusion issues for different types of
  companies and organizations.
• From these discussions I would hope we can
  develop a rationale and basis for a future
  systems engineering exchange

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bias or perspective of presenter

• Education
• Work experience
• Charge from Arvin and ArvinMeritor

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From my observations there are factors you should
consider when attacking the I/D issue in a
system We will discuss some of these factors and
then show how these factors played in the
infusion and diffusion systems thinking in two
corporations Your inputs will allow us to begin
to generalize the issues and approaches to a
broader range of companies
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Factors impacting the infusion and diffusion of
systems thinking

• Corporation
• Formation and evolution, culture, organizational
  structure, human resource philosophy, strategies,
  face to stakeholders
• Market and market conditions for the corporation
• Products and future products
• Corp. needs as expressed internally and
  externally
• Available platforms for promoting I/D of systems
  thinking

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Other items for consideration

• sources of systems expertise
• plan for spreading the capability
• tools etc. to work with
• competencies you can draw on
• change agents in the firm
• help from outside of the company
• sources of best practices from across your and
  other industries

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NOW LETS STEP BACK AND LOOK AT WHERE THESE ITEMS
CAME FROM AND WHY THEY WERE IDENTIFIED
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FORMATION AND EVOLUTION OF ARM

• Arvin and Meritor ( Rockwell Automotive)
  independent US companies for a long period. Tier
  1 suppliers. Mature products. Some growth by
  acquisition.
• Arvin
• Business unit independence
• Some Participative management
• Significant management development
• Meritor
• Business unit independence
• Strategic planning formalized
• Technical Road Map exists
• Top down management
• Process focused in name
• Succession development

• Developed cultures leaders dominantly business
  trained US nationals
• Little assimilation of Arvin or Meritor
  acquisitions
• ATQPS et al main process focus across company
• Scholars program entrenched
• Strategic processes exist but are weak in
  implementation
• Little formal management development

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Features of Arvin

• Business unit independence
• Some participative management
• Manufacturing focus
• Lean quality systems in place and operating
• Product engineering
• Business unit focus, no central engineering
• Technology council exists
• Scholars program exists with a long history
• Little assimilation of acquisitions

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Evolution of the approach to systems at Arvin

• Broad general charge for engineering systems
  development given
• Understanding of BUs state of engineering
  needed
• Focused on working with teams on specific
  problems
• Eg PD and manufacturing launch process
• Planed, developed and recruited for an advanced
  engineering unit

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Evolution of Arvins approach to systems

• Started discussions with various universities,
  OSU, M, Purdue on relevant technology issues
• A conference on technical supply chain issues at
  MIT was pivotal
• Discussed a number of aspects of conference with
  Arvin management
• Continued discussions at MIT with D. Whitney
• Whitney gives introduction to SDM
• After further study and discussion we decide to
  utilize SDM program and start with 3 entrants
• Cadre formation and change agents

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Evolution of Arvins approach to systems

• Developed an Arvin technology board with inside
  and outside personnel MIT and TU Aachen
• TB undertook an examination of the technology
  issues Arvin should consider
• Systems issues
• Product development
• Product preceding technologies
• TB brings visibility to systems thinking and its
  potential

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So what did we learn at Arvin?

• Understanding of BUs business and technical
  characteristics are key
• Technically self contained units creates diverse
  systems
• Within some units options exist for systems
  thinking
• Staff position relies on relations and
  credibility
• Budgetary authority or flexibility is needed
• Initiation of PPT projects with universities, SDM
  program,
• Support from business unit head can be critical
• Outside credible sources for knowledge in new
  areas is needed
• It was an ongoing effort to move management
  thinking in areas of technology and new
  technology

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Features of Meritor

• Meritor ( Rockwell Automotive)
• Top down management
• Business unit independence
• Process focused in name
• Manufacturing focused
• Quality via firefighting
• Strategic planning process formalized
• Technical Road Map process formalized
• Innovation process exists and is utilized
• Product engineering business centric
• Central advanced engineering exists strong
  engineering history
• Engineering council exists
• Little assimilation of acquisitions

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Evolving nature of ArvinMeritor

• ArvinMeritors characteristics (merging of two
  common cultures!)
• Management top down
• Business unit independence
• Manufacturing focused
• Quality systems are not to level of Arvin
• Strategic planning process formalized
• Technical Road Map process formalized
• Innovation process exists and is utilized
• Product engineering business centric
• Central advanced engineering exists at
  headquarters
• Product development process rationalized
• Engineering and Technology Councils brought into
  existence

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As you know.

• The evolutionary nature of the merged company
  must be recognized.
• Mergers are messy and time consuming
• There is much jockeying for influence
• Directional changes are not seen at all levels as
  they are developed
• It is a tough environment to develop a consistent
  strategy with regard to systems and it is an
  environment where you must be opportunistic and
  fleet of foot

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Implications of ARM characteristics on systems
thinking

• Management top down
• Business unit independence
• Manufacturing focused
• Quality systems are not to level of Arvin

• Upper management must be involved
• If focus is on components this can be a definite
  stumbling block
• Infrastructure critical
• Typically not systems thinkers
• Manufacturing was a driver for many
  considerations
• Manufacturing strategy is evolving for multiple
  products in a plant vs. a single product in a
  plant
• ATQPS did aid in systems thinking

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Implications for systems thinking

• Strategic planning process formalized -BSR
• Technical Road Map process formalized - TRM
• Innovation process exists and is utilized
• Product engineering business centric

• Opportunity for introducing systems thinking- a
  platform
• TRM is a ready platform for systems thinking and
  systems development
• Great platform for realizing systems thinking if
  it has visibility
• Hindrance if BU is component centric
• Hindrance if infrastructure is BU centric
• Hindrance if PD is independent of manufacturing

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Implications for systems thinking

• Central advanced engineering exists at
  headquarters
• Product development process rationalized
• Engineering and Technology Councils brought into
  existence

• Great platform for introducing and advancing
  systems eng.
• Virtual PD platform
• Can facilitate systems engineering analysis if
  company wide
• Great platforms for introducing change and
  identifying rationale and impact of systems
  engineering
• EC good for visibility of SDM
• Must be visible to upper mgt.

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corporate factors having influence on systems
thinking your perspective

• Factors

• implications

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Criticality of platforms

• platforms of various types are used to generate
  forums for change
• Examples of platforms
• Positional ---- VP of engineering and technology
• Groups ---- advanced central engineering
• Modeling ---- virtual product development
• Engineering and technical councils---
• unify the engineering community on goals
• focus many change agents to common needed thrusts
• BSR and TRM link technical strategy to business
  directions
• Educational philosophy and leadership development
  programs

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Lets consider platforms that may exist in your
companies and how they may affect or systems
I/D

• Platforms

• effectiveness

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ARM product structure

• Exhaust and Emissions elements
  C,L
• Ride control products shocks and struts
  C,L
• Roofs, doors, latches, L
• Wheels
  L
• Brakes
  C
• Axles and drive lines
  C
• Specialty vehicles
  C
• Trailers
  C
• Suspension systems
  C,L
• Springs, torsion bars, stabilizer bars,..
  L

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ARM product structure

• Mechanical products
• Generally metallic structures
• Axles, drivelines, brakes, suspension system
  elements
• Bearings and Seals (tribological systems)
• Catalyst components ceramic substrates
• Electro mechanical products
• ABS and EBS, transmissions,
• Doors, roofs, access control, suspension systems

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PRODUCT STRUCTURE IMPLICATIONS FOR SYSTEMS
THINKING

• STRUCTURE IMPLICATIONS

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Market and Market place for products

• Global Market place
• US, Europe, Asia, South America
• OEMs in light vehicles
• Ford, GM, D-C, BMW, MB, Fiat, PSA, Renault,
  Toyota, Honda, Nissan
• OEMs in Commercial vehicles
• Freightliner, International, Specialty
  products,..
• Commodity vs. specialized products
• Drivers cost, quality, functionality,
  technology

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Market place factors

• OEM strategies
• Systems vs. components
• Follow production sites
• Supply chain strategies
• General trends for interactions with OEMs
• Trends in manufacturing

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Influential ARM market factors

• Cost focus
• Potential for module and systems work evolving at
  different rates with different OEMs in LVS
• Systems and module business opportunities linked
  to manpower savings at OEM esp in commercial
  vehicles
• Infrastructure and processes are avenues for
  increased systems thinking
• Global distribution of PD and manufacturing
  driven by follow source strategy promotes systems
  thinking

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How do your market characteristics affect the
diffusion of systems thinking ,- ?

• feature

• impact

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Corporation needs and their implications

• Internal
• Resource allocation for development of products
• Product launches
• Evolution of engineering staff capabilities
• Education of systems engineers
• External needs
• Satisfying expectations for systems
• Satisfying expectations for product life cycle
• Satisfying expectations for competency

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Identification of corp. needs from your
perspective

• Type, source and impact of needs

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ARM Organizational Elements and implications

• Is strategy driving the organization or the
  reverse?
• Business groups
• Business units
• Reward structure
• Strategy for groups and units
• Organizational aging
• Personnel development plans

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Organizational features you see impacting I/D of
systems

• Feature

• Impact

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What worked and what did not ?

• Staff position is useful platform but.
• High level management recognition of need to
  organize for systems still to be developed
• Engineering Council excellent platform but needs
  greater management awareness/involvement
• ENGINEERING COMMUNITY NEEDS TO BECOME A BODY
  POLITIC
• Central engineering is an excellent platform.
• TRM process improved and is great platform but.
• BSR tremendous opportunity but needs to be taken
  seriously and linked to strategic
  implementation..

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What worked and what did not ?

• SDM and Certificate solid contributors to SE
• VPD great tool SE maturity model next??
• More integration of SDM cadre is an opportunity
• Better use of SDM thesis is an opportunity
• SDP could be an excellent tool for I/D but could
  not convince HR to use it properly

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What about SEX next?

• System engineering exchange
• Use to set up exchange of ideas on systems
  infusion and diffusion within companies
• Expand to exchanging other aspects of systems
  engineering and systems thinking
• Develop SE I/D maturity model
• Expand to companies in ESD not just those in SDM