WINTER 2003
ENTERPRISE SYSTEMS Much of engineering is associated with design, development, and deployment of tangible artifacts such as airplanes, automobiles, bridges, buildings, chemical plants, computers, factories, networks, roads, ships, televisions, and trains. Some have argued that industrial and systems engineering (ISyE) suffers from the lack of a primary tangible artifact. This, they assert, makes it difficult to explain what we do, and how we add value to the economy and society.
This lack is suggested as one of the reasons that entering freshmen in engineering do not choose ISyE as often as electrical or mechanical engineering. On the other hand, many graduating seniors are in ISyE. Many of Georgia Tech's 12,000 ISyE graduates — roughly 25 percent — have achieved top leadership positions (i.e., CEO, president, etc.) in their organizations. So, the lack of a tangible artifact, if that is the case, does not seem to hinder people's careers.
How do people achieve such notable success? After talking with many hundreds of successful ISyE graduates, it is clear what they do: they create and grow enterprises using the concepts, principles, models, methods, and tools they gained from their ISyE education. The whole enterprise is the purview of these engineers. Their artifact is the enterprise. Their focus is the breadth of things an enterprise does in pursuit of success, whether success is defined as corporate profits or delivery of public services. For this reason, ISyE graduates are, by far, the most diverse set of engineering graduates in terms of industries, positions, and career paths.
EVOLUTION OF ISyE More recently, our attention has broadened yet again to include logistics and supply chain management. This has led to focusing on processes both within and among production facilities, as well as upstream suppliers and downstream distributors. The optimization of supply chains to minimize costs and maximize profits has yielded very impressive results.
An even broader view is now emerging: the whole enterprise. Within a company, this often includes the end-to-end value stream from, for instance, business capture, to product development, to manufacturing and assembly, to product support, and finally infrastructure that includes finance, IT, human resources, etc. ISyE is now concerned with understanding how all of the elements of an enterprise play together, as well as how this understanding can be used to maximize value.
However, even this broader view is too narrow. The combined forces of networking and globalization are making the boundaries of enterprises much less crisp. Telecommuting and outsourcing results in people often being in different times and places, while also becoming partners rather than employees. Command and control management is fading because there are fewer situations where this relationship makes sense.
The broader enterprise includes the company, its suppliers and distributors, customers, other stakeholders in the economic and social environment, and perhaps even competitors. Resources, incentives, and regulations become the fabric of business, rather than who reports to whom. The private and public sectors lose their crisp distinctions. Public policy influences important microeconomic decisions, with significant macroeconomic consequences.
ENTERPRISE SYSTEMS ISyE approaches to such issues are empirically based while also being axiomatically oriented. Real world data and case studies are central, both as sources of insights and as means to evaluate ideas and results. The axiomatic orientation revolves around the ISyE concepts, principles, models, methods, and tools that have long been our profession's "bread and butter" and distinguish us from business schools.
Enterprise Issues Another pervasive underlying issue is uncertainty. The current and future states of enterprise systems are usually uncertain, more so the further into the future one considers. Uncertainties can surround the nature, magnitude, and timing of relationships and variables. Identification of relationships (for example, competitive positions) and estimation of variables (for instance, market demands) are usually central concerns within enterprise systems endeavors.
Yet another pervasive issue is control. In general, this concerns assuring that relationships and variables have desirable characteristics. More specifically, control includes allocation of resources and management of incentives and regulations. Optimization of control is sometimes possible. In many cases, control is limited to measurement and feedback as a basis for human monitoring and decision making.
Another overarching issue is design. In the context of enterprise systems, design is concerned with value streams and their relationships with market characteristics, product design, supply chains, manufacturing processes, service delivery processes, etc. This focus on value streams dictates an enterprise-wide perspective. Narrower perspectives will inevitably result in "suboptimization," whereby functions such as logistics or manufacturing may be optimized to the detriment of the broader enterprise.
Enterprise Goals A central challenge for leaders is to design and manage agile, secure, and sustainable enterprises that create high value while not compromising privacy. To some extent, this challenge will be addressed by new technologies developed by a myriad of disciplines in science and engineering. However, the essence of this challenge is not technological.
Understanding the nature of organizations — how they can change, and how they are inclined to change — is the key to creating these types of enterprises. Much of the knowledge needed is coming from the behavioral and social sciences. From an engineering perspective, ISyE needs to create models, methods, and tools that can leverage the concepts and principles from these sciences. We need to translate basic knowledge into design practices.
We also need to infuse these design practices into engineering education. Topics that need to be integrated into the ISyE curriculum include:
There are, of course, many other similar topics. This list serves to provide the "flavor" of the possible impact of enterprise thinking on ISyE education.
RESEARCH AND EDUCATION Key to such transformation is understanding the nature of emerging enterprise technologies (i.e., collaborative tools, web services, etc.) and assessing their implications for organizational practices and policies. Short-circuiting the often very long adoption cycle for new technologies can provide strong competitive advantages. On the other hand, only a minority of technologies should be expedited into practice.
Research also must address the behavioral and social aspects of enterprise transformation. Organizational change can be quite difficult, especially if management does not realize that it is an underlying issue. Research needs to focus on the nature of organizational culture and how cultural change can best be fostered. Obvious components of this include incentives, rewards, training, and education. Clarity of vision — and sustained leadership commitment to it — is, of course, an overarching success factor.
All of the above need to be addressed with a portfolio of concepts, principles, methods, and tools of ISyE and a wide range of other disciplines. ISyE, with its systems orientation, is the natural "integrator" of these diverse perspectives. ISyE's methods and tools for formal modeling of systems are essential elements of in-depth understanding of enterprises in terms of such concepts as responsiveness, stability, observability, and controllability.
Our great facility with modeling and simulation also plays a central role. The ability to simulate organizational changes prior to committing to them is highly desirable. Also of great interest is the ability to experience organizational changes, via organizational simulation, prior to proceeding with these changes. Beyond modeling, this requires innovative approaches to visualization and interaction.
We also need to focus on the security of enterprises, in terms of physical, fiscal, and information security. This involves both understanding the nature of economic, social, political, and physical threats, and the ways in which countermeasures interact with enterprise practices and processes. It also involves recognizing and developing best practices for managing security — rather than assuming a solution can be "installed."
This brief summary of selected research areas represents a rich set of potential Ph.D. dissertations, as well as grist for numerous Ph.D. seminars. It is also easy to see a wealth of M.S. projects or theses. The results of this breadth of research will, over time, become integrated within B.S. education. We also see numerous avenues for offerings in professional and executive education. Finally, we expect to experience a steady flow of staff members from our sponsors - including both private and public sectors - who will serve as visiting researchers and degree candidates within this overall endeavor.
ORGANIZATIONAL IMPLICATIONS Success will require collaborators ranging from engineering and economics to architecture and art. Of course, not all initiatives require all disciplines. Nevertheless, when the full spectrum of enterprise-level issues is considered, the range of potential collaborators is quite large.
The question of how to organize such diverse collaborations has led us to talk with a variety of people who have undertaken similarly broad initiatives. One lesson learned is to avoid over-organizing. The consensus is to create flexible, initiative-driven teams, making maximal use of concepts for virtual organizations. The incentive and reward structures for these teams need to be crisply aligned with the visions for each initiative.
Interestingly, successful pursuit of this organizational model within an academic environment will, to a great extent, be a transformational initiative for the academic enterprise itself. Using desired enterprise impacts to drive initiatives, as well as tailoring faculty incentives to these drivers, will be novel in a university setting. If all goes well, it may be transformational indeed.
CONCLUSIONS The benefits of this ISyE initiative will be broad and substantial. Our stakeholders include a wide range of private and public enterprises, as well as the economy and society more broadly. The benefits these stakeholders seek include high-value impacts on quality of life, including economic, social, and physical security. Our profession has long focused on providing these benefits. Now we have the opportunity to deliver these tangible and substantial benefits to a wide range of constituencies.
Industrial and Systems Engineering Perspectives
By William B. Rouse, H. Milton and Carolyn J. Stewart
Chair and Professor
ISyE is the engineering discipline that deals with the whole enterprise from an engineering perspective with engineering methods and tools. Historically, our discipline focused on the shop floor with stopwatches, clipboards, and methods engineering. Our scope soon broadened to include manufacturing processes. ISyE methods and tools expanded to consider manufacturing systems in terms of elements of manufacturing processes and relationships among these elements.
A major new initiative within ISyE is enterprise systems. This initiative is focused on both looking at the enterprise as an overall system and understanding the nature of systems that support enterprises. We need to address both strategic and operational issues. Examples of strategic issues of interest include modeling uncertainties and risks associated with major strategic investments and large-scale transformation of enterprise processes and cultures. Operational issues include, for instance, supply chain characterization and optimization, as well as revenue management in highly volatile markets.
A set of fundamental questions underlies this portfolio of strategic and operational issues, as well as our empirical and axiomatic approaches to addressing these issues. An overarching issue is complexity. Systems with many elements, many interconnections, many attributes, and many stakeholders are common domains of study and application for ISyE. A typical goal is to understand and model enterprise systems with these characteristics.
Agility is a pervasive enterprise goal: the ability to flexibly respond to and take advantage of opportunities and challenges. Security is an increasingly common goal, especially in the past couple of years. A related goal is privacy, which may be challenged by security pursuits, e.g., sensing technologies as well as our being connected all the time, everywhere. Sustainability as a goal is concerned with minimizing consumption of non-renewable resources and production of waste.
An enterprise orientation has important implications for research and education in ISyE. This research focuses on the nature of enterprises as systems. Of particular interest is how enterprises can and should be transformed to leverage technology-based inventions — both products and processes — to create market innovations in private as well as public sectors.
The breadth of this vision of enterprise systems is difficult to pursue within the confines of a single academic unit. Successful pursuit of this vision will require strong multi-disciplinary collaboration across academic units at school, college, and university levels. Anyone who has been immersed in academia knows that such collaboration is not necessarily a natural act.
The "bottom line" is simple to state, but nevertheless difficult to accomplish — an ideal challenge for ISyE. Enterprise systems in ISyE are concerned with understanding and managing the complexities associated with large-scale private and public enterprises. This includes characterizing and estimating uncertainties and risks. It also includes optimization and control to allocate resources, monitor their deployment, and assess consequences. Above all, enterprise systems involves seeing and addressing the system as a multi-disciplinary whole.
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