Seeing the big picture

Product design, manufacturing and ensuring the survival of the planet all depend on managing organisations so that everyone within them is working efficiently towards the same ultimate goal, rather than performing tasks in isolation with results that can often work against each other to everyone's detriment. We all know of what happens when managers cease to think in system terms – the automotive design group tasked to solve a vibration problem which they do by adding a weight to the centre of a panel, frustrating efforts by others to reduce overall vehicle weight. Or a design team that comes up with a wonderful concept that is either too expensive or practically impossible to manufacture or assemble. Or designers in one country working in metric measurements, while those in another, are working in tons, pounds and inches. Or worse, the A380 prototype where the wiring looms were not long enough because the team designing them in Germany was unaware that ribs had been added to the fuselage by the design team in France. Both had done their jobs, but they had not been coordinated. The solution of managing organisations and processes as whole entities has lately been given renewed impetus under the name, 'Systems Thinking', which comes out of the field of "System Dynamics", founded by Professor Jay Forrester at MIT. The seminal book about it is "The fifth discipline – the art and practice of the learning organization", by Peter Senge, the director of the Center for Organisational Learning at the MIT Sloan School of Management," originally written in 1990, but revised in 2006. Learning the right lessons from mistakes is crucial to any individual, organisation, company or country and a keen advocate of these concepts is Nabeel Zaidi, who is director of Education and Training Consultants in Watford, and a consultant with Excellence in Learning. He explained that training in systems thinking is crucial to success in any organisation, a view shared by Dr Ken Platts, who heads the Centre for Strategy and Performance at the Institute for Manufacturing at the University of Cambridge. Dr Platts says: "I think systems thinking is an excellent way of tackling most problems relating to organisations – it's the solution to people working in silos," even if, as he admits, the phrase itself is "overworked". He explains that most of his work is in manufacturing strategy – coordinating all the different parts of an enterprise. He says: "The key starting point is to have a clear idea of company objectives." For example, if it is to provide very rapid service, such as replacement parts for oil rigs, where downtime costs millions, and customers are willing to pay a premium to get their parts as soon as possible, the whole system needs to be oriented towards this with spare capacity in both design, technical support and manufacturing, so everything can be done without any delay. If, however, on the other hand, the company produces commodity nut and bolt fasteners, cost is probably paramount, and machines should be producing product 24/7. Hence, before going any further, the company has to decide which type of business it wishes to be in, after which the next step, he claims, is to identify which resources it already has and what capabilities it needs to build. Should it be that both functions form part of the company plan, Dr Platt argues that there should then be a "Factory within a factory", with one part producing standard products, and the other designing and producing rapid specials, but he points out that: "Within each area, there must be a consistent system." Within each system, there has to be the right resources – machines, human skills or perhaps some special technology that needs to be sourced or developed. Not only design and production, but other matters must be considered, including inventory control and quality control. The managers have to ask themselves when setting up a new venture or an old venture in a new field, if investments have to be made, but whatever path they follow, it is essential, Dr Platts insists, that they "Think through all the elements". While this all sounded very good and worthy, how can this be ensured? Dr Platts responds: "It has to come from the top – there must be recognition of what has to be done at board level. There needs to be a strategy for each level of the business. To do this, there needs to be an effective CEO, capable of strategic thinking, who can put objectives across to heads of departments who can in turn work with all managers. Changes need to be championed from above, but they cannot be imposed." As part of the process, Dr Platts suggests workshops. "Working through all the issues, publishing the processes," he says. (This is the strategy that has been adopted at EADS – see our report from Dassault's European Customer Forum). The Institute for Manufacturing has a long working relationship with industry, including SMEs, providing education, training and support. Apart from government-supported programmes, the future of which has yet to be settled, companies small and large can become members of the Institute, in a similar manner to being members of Pera or TWI, and have access to services. The IfM also offers a number of training courses and seminars. Dr Platts says: "A lot of it is about education. The leaders of industry need to take the message on board and develop a common purpose within their organisation. Most people want to do a good job. We just want to help them do it better." In this fast-moving and globally competitive world, Dr Platts emphasises that there is no way businesses can stand still, happy with the system they presently have and what they do now. "A company won't be making the same set of products forever. You therefore have to have a system to realise the next set of products and how it will interact with your present system. Different types of products require different types of systemic solutions." For example, he explains, electronic products have a very short design, develop, make and sell cycle, but don't have to be critically reliable, while aerospace products have very long cycles, but have to be totally reliable. And perhaps thinking of EADS and Airbus, he concludes, "Tthe more you manage the overall system, and employ properly managed engineering in the design process, the less fraught the process will be to get the product into production." Until this point, computer software and PLM systems have not been mentioned. However, these are obviously being seen as increasingly crucial to managing the overall enterprise system. Essential though these are becoming, they are only tools, and it is the management processes that are crucial – getting the overall system right learning the right lessons from mistakes. Nonetheless, computer and systems vendors are worth listening to. Bernard Charlès the CEO of Dassalt Systèmes forsees a merging between CAD, PLM and ERP systems to form overall enterprise systems in which all functions are integrated together. Furthermore, Siemens, when it acquired UGS, made it clear that they saw synergy between CAD and factory automation systems. When asked whether his company embraced systems thinking, Mark Daniels, business manager architecture and software for Rockwell Automation responded: "We strongly agree with that. Smarter manufacturing is definitely not looking at disparate pieces of plant. There is a need to integrate everything into one IT environment." He said that the idea of operating manufacturing plant or even complete enterprises as single integrated systems was becoming particularly popular in the food and beverage industries, where management wanted constant access to KPIs – Key Performance Indicators. He said they liked the idea of having 'Digital dashboards', a facility which Rockwell Automation possesses though its acquisition of Incuity, which Rockwell is now calling 'FactoryTalk VantagePoint'. Daniels said that the sort of information that operators of such plant were looking for were things like, 'How much energy does it take to make a biscuit?' 'Why does line three keep stopping?' Customers want to see actionable information." He points out that it is a good idea to implement this kind of integration when setting up a factory system, since, if machines and plant are purchased standalone: "You have to spend a lot of money to be able to extract this information subsequently." There is more than one way to implement such systems. Some companies, Daniels says, choose to start from an SAP system and, "Work downwards", while others want point solutions, and plant and machines that send information upwards. There are a lot of challenges. For examples, the suppliers of machines have to be persuaded to provide information on energy consumption in a form that can be fed into an overall factory system. "Historically", says Daniels, "companies regarded energy consumptions as fixed costs – bills for electricity, gas and steam just rolled in." Now, he says, "Smart people", realise they are variable costs, and target ways to reduce them. Says Daniels: "We have a lot of areas in which we can assist companies in such tasks", pointing out that it is not essential to purchase Rockwell hardware since communications are generally available using EtherNet/IP, which is now an open standard, and facilities such as VantagePoint are platform independent. Nonetheless, factories as fully integrated systems are still at a relatively early stage – Daniels telling us that, "Half a dozen food and beverage manufacturers are now just beyond the pilot stage." Nonetheless, he expected more to follow, now that energy costs are rising so that companies are seeing their reduction as a priority and companies are also becoming concerned to establish greener credentials – he said, "If I ask company operations directors, what are the top three things on your mind, nobody says, I want faster PCs, but they all say they want to reduce energy consumption and cuts costs." Design Pointers • Systems thinking is looking at matters as a whole, whether the system is a factory or an enterprise • While it is not easy to accomplish, failure to do so has led to major economic disasters in the past, and is likely to continue to have the same result in the future. • And while software tools and industrial communications are no panacea, they make efficient system management much more feasible than in the past