World Class Systems Engineering - the 5-layer
Model
by Prof. Derek K Hitchins
Why Yoda? Why not?
One of the ways to look at the world is as a series of systems
within systems within systems...you know, like those Russian
Babushka dolls.
You can start at quarks and end up at the Universe, if you
keep going up, or vice versa if you keep going down.
Systems engineering, then, can refer to the development of
projects, businesses, industries and even to national
socioeconomic systems.
But, many projects can make a business, many businesses can
make an industry...perhaps there is something more to this
Systems Engineering appears to be all things to all people - or,
put another way, it seems that many people, with many divergent
viewpoints, lay claim to:-
"using the systems approach"
or being
"the real systems engineers"
To bring some order to this seeming anarchy, yet without
suggesting any restrictions on the creativity and energy that such
divergence implies, I have proposed a 5-layer model of systems
engineering, as follows:-
Industrial Systems Engineering, or engineering of complete
supply chains/circles. Many industries make a socio-economic
system. A global wealth creation philosophy. Japan seems to
operate most effectively at this level
Business Systems Engineering - many businesses make an
industry. At this level, systems engineering seeks to optimize
performance somewhat independent of other businesses
Product Level. Many products make a system. The tangible
artifact level. Many engineers and their institutions consider
this to be the only "real" systems engineering
The 5 layers form a "nesting" model, i.e. many products make a
project, many projects make a business, many businesss make an
industry and many industries make a socio-economic system.
Clearly, these statements are only approximate.
A socio-economic system has more in it than just industries.
A business has more in it than just projects, and so on.
Nonetheless, the 5-layer model provides a useful basis for
illustrating how each level "lives within", and contributes to, the
one above. For that reason, each layer will be presented in turn,
starting at the bottom - Layer 1.
Level 1 - Product Systems Engineeering
Level 1 is the systems engineering of artifacts
Words in blue indicate basic engineering approaches aimed at
the creation of an artifact somewhat in isolation from other
artifacts, together with which it might form of a larger system.
Words in black, in the figure above show the various factors
and considerations necessary to ensure that the artifact is
conceived, designed and created as part of a wider whole, into
which it will fit like a hand in a glove
Experienced engineers work in this fashion as a matter of
course. Hence many are inclined to suggest that systems
engineering is little more than common sense. and they're right,
except that common sense can prove singularly uncommon...
Level 2 - Project Systems Engineering
Level 2 Systems Engineering is the System or Project Level
There are many patterns, or strategies, that can be, and are,
followed at this level. The figure above shows a classic approach,
going from top to bottom, with the generation of options and of
criteria being conducted in parallel. Criteria for a good solution to
the requirement are derived from:-
that customer/user requirement,
the environment into which the eventual product or service
will be placed, including other systems with which it will
interact
the business objectives of the company concerned
the capabilities of the company,
the resources available to the company
Note that:-
The eventual test and integration environment is developed
from the requirement and in parallel with the primary product or
service
Systems engineering persists throughout the project phase,
maintaining coherence and balance between the developing parts of
the eventual product or service
There are several approaches other than the classic one shown
above. Options include:-
Waterfall, in which
each phase of a project (e.g. requirements analysis, design, implementation,
maintenance) is completed before proceeding with the next - assuming no rework...
Spiral, or Helical,
involving the use of prototypes to elicit better understanding of the requirement
and to explore potential solutions
Evolutionary, in which new systems are incremental "improvments"
on previous tried-and-trusted systems
activities which might otherwise be sequential are overlapped to reduce
time to completion
designs anticipate the needs of development, production, assembly, etc.
Sashami - like waterfall, but with some overlap between phases
Regression - which allows each phase to linger throughout the project
Chaos - breaks the rigid notion of phases and allows them to come
and go as the project evolves.
Once rework breaks out, most projects de facto tend towards chaos.
Managers may become unduly concerned about this state, which may offer
the best performance in complex situations
Goal-oriented,
in which the objective is to create the emergent features of a goal system
by synthesis and without reduction
All of which is running "underneath" the following overview model of Level
2 Systems Engineering:-
Level 3 - Business Systems Engineering
Business Level Systems Engineering is represented in the figure as
having two main strands:-
The first strand runs left to right along the bottom, with
suppliers providing parts which are assembled and then sold into a
market at the right.
The second strand runs from centre-right, anti-clockwise. It
represents the business creating new products or variants which
are eventually inserted into the flow of products passing through
the first strand
Red lines indicate co-operation with suppliers. Businesses
vary considerable in the degree with which they co-operate. Some
do not, while others encourage joint conception, design,
development, etc., involving potential suppliers at every stage.
At this level, it becomes evident that any business must balance
the two strands, and that any business is really part of some larger
organization.
Supply Chain Systems Engineering is an example of Industry-level
SE:-
The figure shows a typical supply circle, i.e. a supply chain
that closes the loop through recycling.
Goods and services flow clockwise around the loop.
Control and wealth flow anti-clockwise
Goods in use become obsolescent due either to failure or to
innovation
Failure causes customer dissatisfaction so, although they
will buy a new product, customers may well choose a different
supplier
Innovation causes customers to perceive their current
product as outdated or outmoded, so encouraging them to buy a
new product while the old one may still be working. If
innovation is too fast, customers can feel cheated, so there
are limits to product replacement speed.
The figure shows typical metrics which can be formulated at
this level
The whole process of circulation might be co-ordinated,
possibly be a Keiretsu.
While this is possible, it may not be acceptable within
some socio-economic systems (Level 5).
Alternatively, the whole circle may develop behind a lead
supplier who organizes his suppliers, who then organize their
suppliers, and so on.
Competing Supply circles provoke each others price
reductions and continual innovation...
Looking at the supply chain of the previous figure in more detail
reveals how the different categories of systems engineering nest into
each other. The lead company, the one that delivers to the market, is
shown being supplied by one of several second tier suppliers.
Together with the other companies in the supply chain, they are
subject to supply chain systems engineering, which seeks to maintain
a steady flow of products into the market place, while at the same
time minimizing Work in Progress, and other forms of overhead that
increase the unit production cost (UPC).
Each of the companies in the chain/circle is also concerned with
its own manufacturing processes, which have to be consistent with the
overall supply chain ethic - hence manufacturing systems engineering.
Also within each company, there will arise a need to design and
develop replacement products, new products and existing product
upgrades. So, we can see project systems engineering running
vertically. since the products are made from supplied parts, project
systems engineering runs in parallel in the supplier companies, too.
Joint IPTs, Integrated Product Teams, form to coordinate the
activities in the companies. Such teams may be ad hoc, and
comprised of only 5 - 7 people needed to make commercially and
technically viable decisions.
Within the projects, there will be subsystems, and therefore
subsystems engineering will be evident as shown in the figure,
working at artifact Level 1.
We can also see Market Systems Engineering, making up the set. Part of Market
Systems Engineering is heijunka, production smoothing. This operates
in part by adjusting marketing and advertising. If demand is falling off, then
advertising is increased to restore the steady flow of particular goods. (The
whole system may be manufacturing and selling many different products/goods
in parallel, of course.) Similalrly, if demand is rising, advertising may be
tailed off, again to maintain level production rates. It can be shown that steady
production rates for a product passing through the supply system result in minimal
work-in-progress (WIP); both raising, and lowering, the production rate result
in increased WIP, which contributes to raising UPC. Steady is best, hence heijunka.Part
of the skill, of course, is to recognize when a product has run its course,
and to neatly fit a new or modified product into the manufacturing stream without
a hiccup.
So, in this overall figure, we can see four of the five layers of
systems engineering at work, each layer nesting in the one above.
Notes:
The creation and continual adaptation of the volume supply chain to changing
markets, fashions, and competition, indicate that here we have a different
form of systems engineering. The system in question is global, it does not
have an obvious lifecycle, and systems engineering is on-line, live and interactive.
Like an animal, the system in question metabolizes, continually replacing
parts with newer parts, continually adapting its size, throughput, etc., with
the Prime Directive of long term survival, rather than short term profit per
se.
An excellent reference for such systems and for this different approach
to systems engineering is the book: "The Machine that Changed the World,"
by Womack, Jones and Roos, published as a result of a 5-year, 5million dollar
study by MIT into the future of the automobile
Level 5 - Socio-Economic Systems Engineering
Socio-Economic Systems Engineering is difficult-to-impossible to
represent in a figure. Above, see my best shot to date. It takes the
form of an N2 chart, so called because it has N rows and N columns,
making N2 squares altogether.
Participants in the system ar entered in the shadowed boxes,
while other boxes represent the interchange between participants.
Output from any participant are in its row.
Input to any participant are in its column.
So, taking any square off the leading diagonal, it is
simultaneously in the row and column that connects two particular
entities.
Confused? Well, Raw Materials Industries give energy, metals,
woods, plastics and composites to Manufacturing Industries - Row 1,
Column 2. See?
Now, looking at the whole figure, you have a birds-eye view of the
socio-economic system, with the major systems and their interchanges.
The regulation, by politicians and economists, of the interchange
patterns, can lead to Planned or Free-Market Economies:-
Planned economy controls variety, interactions, matches
outputs to inputs, including imports and exports. Economists
predict the future, predictions fail, system weak through lack of
variety, adaptability
Free-market economy encourages variety, promotes chaotic input
/output connections. Economists predict the future, predictions
fail, system robust, adaptable through connected variety but its
behaviour is uncertain
And, of course, changes occurring at this level filter all the way down through
the levels to the bottom, affecting the way that industries, businesses and
projects organize and behave. The same is true in the reverse, upwards, direction;
changes in project performance impact on business, which has an effect on the
Industry, and hence on the economy.
If you could imagine a globe representing the World, with one of these socio-econmic
models on each and every nation and, further, if all the models were interconnected
to show the flows ofmoney, goods and services between nations, then you would
have the basis for a global socio-economic model. Now wouldn't that be
something...
