Friday, December 14, 2012

Alvaro Madero, SDM '12: Trekking to Silicon Valley

By Lynne Weiss

Alvaro Madero
Photo by Kathy
Tarantola Photography
While SDM '12 Alvaro Madero was still working toward his B.S. in electronic systems engineering at the Instituto Tecnológico y de Estudios Superiores de Monterrey in Mexico, he and a friend were hired to reconfigure 250 routers that had come with the wrong firmware. "The client expected us to take about a week to complete, but we did it in 10 hours." Madero went on to explain that he and his friend used a virtual keyboard that allowed them to enter the reconfiguration just once. "Then we ran it 250 times."

The company that hired Madero to do that job was a startup named CARSA (Consultoria y Asesoria de Redes S.A. — Consulting and Assessment on Networks). Needless to say, CARSA was eager to hire Madero when he finished school. At first his role was to provide technical support to the sales team, but over time, he shifted to consulting in pre-sales meetings to develop strategy.

When Madero decided to pursue a graduate degree, he realized that he did not want to stop being an engineer to pursue a conventional MBA. Nor did he want to limit himself to a technical degree. In 2010 he discovered SDM on the MIT website and realized "this is what I want: a combination of engineering and business."

Shortly after matriculating in SDM in January 2012, Madero joined the 2012 SDM Tech Trek, the first in several years. The trek took about 25 SDM fellows to California's Silicon Valley, where they visited eight different companies, including Tesla, First Solar, Silver Springs, TIBCO, Yammer, Cisco, Google, and Intel.

Madero was so enthusiastic about the trek that he volunteered to co-lead the next one, scheduled for March 25-29, 2013. In creating an itinerary, he and co-lead Michael Seelhoff first sought out contacts within targeted companies across various industries who understand the strategic value of bridging the gap between engineering and management. "Most professionals who have managed projects involving engineers understand how SDM [fellows] can add value," Madero said.

Because one company wanted to interview visiting SDM students in 2012, this year's trek will allow time for interviews, in addition to group tours. The 2013 trek will include both companies visited last year and new ones as well.

For Madero, who sees his future in IT, the SDM Tech Trek offers an opportunity to get to know the companies and their cultures firsthand. "From the outside, we can only imagine what it might be like to work in a company," Madero explained. "But it's a whole different experience to see it from the inside."

Companies interested in hosting a visit to their facilities by SDM fellows should contact Joan S. Rubin, Industry Co-director, System Design and Management.

Wednesday, December 12, 2012

SDM Fellow Establishes MIT's First Mining Club

By Sarah Foote, News@MITSloan

Juan Esteban Montero
Photo by Kathy
Tarantola Photography
Shortly after Juan Esteban Montero began MIT's System Design and Management program last January, he looked for students who shared his passion for the natural resources industry. He was able to find only a few students at MIT Sloan with this interest. Seeking out ways to meet other MIT students interested in mining led Montero to create MIT's Mining, Oil, and Gas Club (MOG).

"The club is doing very well thanks to a great group of leaders. We started with just five students from MIT Sloan and mechanical engineering and now have 120 members from all five schools at MIT," Montero said. "We started with small events and then created a lecture series to bring experts to campus. Many MIT students are now learning about the challenges of the natural resources industries and at the same time, these industries are interested in the projects and research MIT students are working on."

Montero noted that the club has also sparked interest outside of MIT. "The Chilean government has expressed an interest in working with MOG. Universities in Canada and Japan are also interested in the club's research, and people from everywhere are getting in touch with us. Today, we received an email from the Yazd University of Iran expressing interest in our club."

Montero believes MOG will continue to grow and has a lot of potential for its members. "Two companies have asked if they can come to campus to recruit MIT students. We haven't even reached out to recruiters yet, so this is a great opportunity for our members," he said. "We're creating a career director position within the club to represent it in a more formal way. We also plan to connect with MIT's career fair to make sure mining companies are represented in the future."

From Chile to Cambridge
Growing up in Santiago, Chile, Montero wanted to be an engineer as a child. Mining in Chile is a major component of the country's economy, and Montero wanted his career to have an impact on society, and he knew that mining was the way to achieve this.

"I really enjoyed working in the mining industry because it is the main industry of the Chilean economy and my work had an impact on the country. I was lucky to work for the most important mining company in the world, BHP Billiton, and see the impact of my work in different aspects − such as creating jobs. As my responsibilities grew, I knew I wanted to expand my managerial and engineering skills," Montero said. "I conducted research online to find a master's degree program that would combine my interests and that's when I found SDM. Coming to MIT is the best decision I've ever made. The community here is inspiring and I'm really enjoying SDM and MIT."

As part of his SDM degree requirements, Montero will write a thesis on the mining industry. (SDM is jointly offered by MIT Sloan and the MIT Engineering Systems Division). His research will include the application of flexibility in the engineering design of major mining projects. He is working with Professor Richard de Neufville on the project.

"It takes months, millions of dollars, and a lot of disciplines to design mines. I want to look into different alternatives in a way that is less expensive and easier to compute. I want to find ways for mining companies to explore opportunities that are not visible with current methodology," Montero said. "Every class I have taken at MIT has been amazing from the managerial and the technical side — and all of them will be helpful as I work on my thesis."

Montero's interest in mining and energy doesn't end with the club or his thesis — he is also a business development researcher for BroadRock Renewables, a clean technology company based in New York.

"I'm working on a market research project for BroadRock. I got this opportunity through SDM and I'm learning a lot from it," Montero said. "MIT is also giving me the opportunity to visit with Keio University's SDM Department in Tokyo this January. I'll work with them on a systems thinking approach for the mining industries in South America and Japan to collaborate. Japan is a very important stakeholder of the natural resources industry and shares significant commonalities with Chile as a major seismic country."

Note— Students who are interested in joining the Mining, Oil, and Gas Club should visit the website or send an email to the club officers.

Monday, December 3, 2012

SDM's James Utterback: burgeoning innovation where technology streams collide

James Utterback
Where diverse streams of knowledge and technology collide one may find exceptional opportunity for innovation. James Utterback is the David J. McGrath jr (1959) Professor of Management and Innovation at the MIT Sloan School of Management and Professor of Engineering Systems within the MIT Engineering Systems Division. His research focuses on innovation and entrepreneurship. In collaboration with Simon Fraser University's Elicia Maine, Utterback analyzed startups that span nanotechnology and biotechnology and found that the companies that brought together materials, chemistry, physics and biology were more successful. "Creativity is a combinatorial process," said Utterback. "The more elements and chances there are to combine, the more you can expect to have startups and innovations."

Utterback is slated to moderate a symposium titled Confluence of Streams of Knowledge: Biotechnology and Nanotechnology that Maine and he organized for the American Association for the Advancement of Science (AAAS) annual meeting in Boston in February, 2013. Speakers at the symposium include such luminaries as MIT's Robert Langer and Caltech's Nathan Lewis.

The symposium will cover examples like tissue engineering, which brings together developmental biology, engineering and materials. Speakers will draw the distinction between traditional interdisciplinary collaboration, where specialists work on separate parts of projects, and work at the confluence of technology streams, where there is concurrent multidisciplinary collaboration.

The overall hypothesis can be generalized in lots of ways, said Utterback. Companies that have a greater range of users might produce more innovations, or fields where users are active and have tools to help create products might be more innovative, he said. Similarly, firms that organize multidisciplinary laboratories such as historically Bell Labs and Xerox PARC might be expected to create important innovations. "It's a matter of how many connections are being made and how many sparks can be struck."

Utterback was the Technology Management Section (TMS) Distinguished Speaker at the Institute for Operations Research and the Management Sciences (INFORMS) 2012 annual meeting in October. His talk, titled "An Ecology of Innovation," calls for thinking of new products as experiments in the market. Innovation and startups are processes of experimentation that create and exploit rapid changes in the market. Typically established firms invest heavily in development efforts long past the time that rewarding improvements might be expected. Rather than seeking to reduce uncertainty and concentrate effort, companies might consider fostering greater experimentation, Utterback said. He is writing a book on the subject with Boston University's Fernando Suárez.

Utterback is a founding faculty member of the SDM program as well as the Sloan Fellows in Innovation and Global Leadership, and the Leaders for Global Operations programs. "I like fields where engineering and management come together," he said.

The goal of the SDM program is to build up the skills and effectiveness of people who design reliable and effective complex systems, said Utterback. He gives the students in the program high praise. "It's a lot of fun to teach them; they always have new questions," he said. "You can never anticipate everything they're going to bring into the classroom." A key advantage the SDM program offers is its emphasis on primary sources over textbooks, said Utterback. "SDM is bringing a lot of current research into the classroom, which is one of MIT's traditional strengths."

Friday, November 30, 2012

Cultivating Egypt's Social Entrepreneurs

By Lynne Weiss

Ayman Ismail
When Professor Ayman Ismail went to visit his home in Egypt early in 2011, he had no idea he was walking into a revolution. Three weeks after he arrived, however, demonstrations began in Tahrir Square, and Ismail saw he had a positive role to play.

Ismail, who today holds the Abdul Latif Jameel Endowed Chair of Entrepreneurship at the American University in Cairo (AUC) School of Business, received both his Ph.D. in international economic development and his master's in city planning from MIT. Selected by the World Economic Forum as one of Egypt's two most influential and inspirational leaders of 2012, he discussed the prospects for social entrepreneurs in Egypt at an October 11 event co-sponsored by the MIT System Design and Management (SDM) Speakers Series and the MIT Egyptian Students Association.

He began his talk by describing the situation in Egypt when he arrived there some 20 months ago. On a macro level, Egypt's economy was strong—levels of foreign investment, economic growth, and foreign currency reserves were increasing. Domestically, however, there were problems. Poverty was at 42%. Poverty in Egypt means living on around $1.70 a day. The unemployment rate was high and labor unrest was increasing.

In the wake of the revolution, investments have slowed and foreign currency reserves have declined from $35 billion to $15 billion. Poverty and labor unrest are still widespread.

Ismail believes, however, that Egypt offers reasons for optimism. First, Egypt now has its first democratically elected civilian president in over 60 years. Second, it has a healthy middle class with significant disposable income and a desire to build a safe, stable society. And third, Egypt's burgeoning entrepreneurial activity gives Ismail further reason for optimism.

While small businesses such as corner groceries have long been the traditional backbone of Egypt's entrepreneurial economy, today Egypt has an increasing amount of contemporary innovation and is home to many of the same types of technology-based start-ups that one finds in Cambridge or Silicon Valley. One of the most exciting ventures is a business to develop solar-powered water pumps and desalination stations for Egypt's desert climate. Another uses patents on nanoparticles for diagnosing hepatitis C.

Ismail is co-founder of Nahdet El Mahrousa, a nongovernmental organization that provides incubation services and seed funding to young social entrepreneurs. He also leads the Entrepreneurship and Innovation Program (EIP) at AUC. "That's my baby," he grinned, as he spoke enthusiastically about the huge network of mentors that EIP has created to strengthen the entrepreneurial ecosystem. "I hope to come back next year to tell you about our success."

Ismail ended his talk by offering a final reason for optimism. Egypt's network of 18 national and numerous private universities provides a solid foundation of technical education. Ismail said, however, that the country's most interesting entrepreneurs are not necessarily those with the best academic background, but those who bring something unique at this moment of massive political, economic, and social change: a mix of "business skills, street savvy, spirit, and tenacity." Revolutionary, indeed.

Tuesday, November 27, 2012

Elizabeth Cilley Southerlan, SDM '12: Complex Systems for Healthcare, WiSDM, and More

Elizabeth Cilley Southerlan
Photo by Kathy
Tarantola Photography
From military bases to Vermont farms, Elizabeth Cilley Southerlan, SDM '12, has followed her interest in complex systems. Now she's a fellow in MIT's System Design and Management (SDM) Program, where her interest has become a passion for improving complex health care systems and for helping to build strong communities within MIT and SDM.

Southerlan came to SDM from Accenture, where she was a management consultant with the firm's retail and health care practices. For the latter, she managed projects in health care analytics and clinical transformation.

In looking to build on her training in industrial engineering and experience in health care management consulting, Southerlan opted for SDM. She believed that SDM's MS in engineering and management, rather than an MBA, would enable her to increase her business acumen as well as her understanding of engineering principles. SDM also offered courses to help Southerlan gain a better appreciation of how organizations function and develop a multi-disciplinary perspective on factors affecting health care over the long-term.

Southerlan is currently conducting research under faculty from the MIT Engineering Systems Division's Sociotechnical Systems Research Center Specifically, she is applying systems thinking to the process of analyzing and mapping potential changes in the US Military Health System's (MHS) treatment of post-traumatic stress disorder (PTSD). By examining how PTSD is handled at different levels of the MHS, from a single unit or facility through entire service branches and military itself, she aims to map out a better understanding of how the military is currently addressing the problem, how it might improve care, and what steps it could take to achieve that.

Southerlan's research draws on a method known as Enterprise Architecting, that was discussed in an SDM course taught by Professors Deborah Nightingale and Donna Rhodes. The approach involves comparing behavioral health care systems at the scale of a particular Marine base, with those of the Navy, and of the MHS as a whole. Southerlan also broadened the comparison to include military health care internationally.

Each scale of system is analyzed through the "elemental lenses" of strategy, infrastructure, processes, products, services, knowledge, information and organization. In theory, grasping the interrelationships and interdependencies of the elements in these systems can produce better outcomes.

In a separate project at the Veteran's Administration hospital in Boston, Southerlan examined the hospital's use of data, from patient admissions to clinical outcome, identifying strategies for improving staff-wide access to data and better aligning decision-making with information flows.

Southerlan's work in health care management benefits from her training in industrial engineering and her lifelong appreciation of the medical profession (she grew up in a family of health care practitioners). She also pursued a concentration in life sciences as an undergraduate at Penn State.

"I have always been passionate about improving health care," she says. Her goal is ensuring that the organizational and administrative side of health care enhances, rather than hinders, delivery of care. For instance, while she sees the potential upside of the current push toward electronic health records, "it can be frustrating and sometimes seems ad hoc. It's a new language, which can be inefficient now, but has long-term potential," she says.

Southerlan, who holds a B.S. in industrial engineering, spent several weeks this past summer studying food production as part of a certificate program in sustainable food systems from the University of Vermont. While not directly tied to her health care management studies, the experience dovetailed with her interest in diet and exercise as preventive medicine, and added data to her expanding health care systems model.

In addition to her dedication to improving the delivery of health care, Southerlan also believes that a well-balanced life is essential to success. She has lived these words as the social chair and student life representative of her SDM '12 cohort, as well as the COO of Women in SDM (WiSDM) and director of logistics for the MIT 2012 Career Fair (school wide).

In her social and student life roles, Southerlan has worked to increase the professional and social relationships shared by her classmates and students outside of SDM. She worked with other WiSDM leaders and SDM staff to organize and present the first WiSDM Symposium, which took place during the annual SDM conference. The women worked together to bring in three accomplished female leaders across a wider variety of industries to discuss the application of systems thinking in their organizations.

Southerlan worked with the other career fair directors to organize and facilitate the largest and most well-attended career fair in MIT's history. While the event was school wide, Southerlan helped form a partnership between the annual career fair organizers and participants and SDM. This provided her classmates with opportunities to work side-by-side with industry representatives of their choice while also increasing SDM's industry relationships.

Tuesday, November 20, 2012

Eric von Hippel: user innovation and the revolution in consumer product design

By Eric Smalley

Eric von Hipp
Many people are product designers, even if they don't know it. In fact, millions of people have become innovators but are generally not recognized as such. They are the tinkerers who modify products to suit their needs, and they represent a paradigm shift in product design and development. SDM's Eric von Hippel is measuring this trend and developing strategies for businesses to adapt to the changing landscape.

Von Hippel, the T. Wilson (1953) Professor in Management at the MIT Sloan School of Management and Professor of Engineering Systems in the MIT Engineering Systems Division, studies the sources of innovation and develops new processes to improve product development.

He recently conducted a study of consumer product innovation in the US, the United Kingdom, and Japan, and found that innovation is as much the province of product users as it is product producers. "Data shows there's a huge amount of activity and it's invisible," said von Hippel. "People assume that the producers are the innovators so they don't measure user innovation at all."

Von Hippel and colleagues determined that consumers in each of the three countries spend billions of dollars on product innovation. They estimated that US consumers spend one third of the amount that businesses spend on consumer product research and development in the US. The researchers described the work in the paper "The Age of the Consumer-Innovator," published in the fall 2011 issue of MIT Sloan Management Review.

The innovation paradigm shift from producer-centered to user-centered is catching many businesses flat-footed, von Hippel said. "Some new companies are built around that concept," he said. But "many traditional companies still don't get it at all, so we're in a transition. To convince people that the world is different now is not an easy task."

The key is to help businesses tap into the wellspring of consumer innovation. "Many of the things that companies develop internally are already developed by user communities," he said. "If companies could simply get these lead users to work with them, they could do a much more successful job of innovation," he said.

To support user innovation, businesses need to organize product development systems to accept prototypes developed by users, said von Hippel. Businesses also need to create developers' toolkits and user forums, give credit to user innovators, and avoid the stifling effects of unfocused intellectual property protection strategies.

Von Hippel is writing a book that describes changes in innovation, including user innovation and crowdsourcing.

Von Hippel joined the MIT faculty in 1973. "My father was a professor here too, and I actually have been hanging around the place since I was 12 years old," he said.

One aspect of MIT that stands out is the faculty's high level of practical experience, which is particularly useful for teaching in the SDM program where most of the students are midcareer professionals, said von Hippel. Another aspect is the high degree of collaboration. "Professors are very accessible and there's no real sense of hierarchy," he said. "People are delighted to work with each other across levels."

Thursday, September 6, 2012

Tina Srivastava '11: Making Services a Higher Priority

By Ted Bowen
Tina Srivastava
Photo by Kathy Tarantola Photography
Maintaining systems is less glamorous than designing and implementing them. You might say it's not rocket science. Tina Srivastava, SDM '11, whose c.v. includes a good deal of rocket science, is looking to add luster to operations and maintenance, essential and under-appreciated practices that are especially critical at a time when many organizations face tight budgets. Srivastava, who studied aeronautics and astronautics as an undergraduate at MIT, has been working to make services central to the discussion of an organization's efficiency and adaptability.

The vehicle for this change in emphasis is the Lean Enterprise Self Assessment Tool (LESAT), which is a product of the MIT Lean Advancement Initiative (LAI), a consortium of industry, government and academic organizations. The tool helps organizations gauge their readiness to adapt to new conditions, change course, and modify strategy when necessary. LAI consultants, including MIT students, work with organizations to implement LESAT, often conducting regular reviews. The highly technical LESAT is sometimes combined with the management services of a Deloitte or McKinsey as part of a wider review.

LESAT was designed for organizations involved in product development, rather than services like operations and maintenance. As her SDM thesis, Srivastava has outlined an extension of LESAT for servicing existing systems, which encompasses operations, maintenance, upgrades, repairs, and overhauls. The scope is broad. The extension is intended to help organizations get the most out of core systems, such as airline reservation systems; to help governments and utilities maintain critical infrastructure; to improve supply chain management; and to extend the useful life of a host of other "in-service systems".

Srivastava presented the work, "Lean Effectiveness Model for Products and Services: Servicing Existing Systems in Aerospace and Technology," in July at the annual conference of the International Council on Systems Engineering (INCOSE) in Rome. In drafting the LESAT extension, Srivastava collaborated with the INCOSE In-Service Systems Working Group and aerospace and technology giants Boeing, Pratt & Whitney, and Raytheon and reviewed relevant literature to derive best practices.

The idea is to get more out of systems and to improve product design by learning from the experience of operating and maintaining existing systems. Srivastava notes that 70 percent of the total life cycle cost of US Department of Defense weapon systems goes to servicing existing systems. In general, spending on services accounts for an increasing portion of organizations' budgets as they buy fewer new systems.

The proposed LESAT extension emphasizes the use of service contracts, formal inclusion of operations and maintenance staff in cross-department decision-making and better coordination between the users and maintainers of products and the developers of those products. It also encourages organizations to realistically factor the cost of maintenance in their budgets.

The process can help managers work past preconceived notions, according to Srivastava. "Oftentimes enterprise leadership is surprised to find the underlying root cause in an unexpected place," she said. "For example, they might think manufacturing is too slow and hurting profits, but it could be a trust relationship with a supplier."

The proposed methodology feeds back into product development, benefitting from experience in the field to improve product refinements and redesigns. The LESAT approach to services also helps organizations assess whether they are better off repairing equipment in-house or externally.

At the same time, Srivastava identifies barriers to this approach, including a general bias among top employees against services jobs versus new product development, corporate strategies tilted toward selling new systems, and equipment depots too fragmented and committed to too many individual internal groups to participate effectively in planning and development processes.

In a related presentation at the INCOSE conference, Srivastava and MIT colleagues Victor Piper and Jose Aria discussed their review of the U.S. Army's abandoned Future Combat Systems (FCS) modernization program, a complex 'system of systems'. Their analysis, which grew out of a systems engineering class project at MIT, identified shortcomings in traditional systems engineering approaches. In particular, FCS managers failed to anticipate delays in beginning production, the project's ballooning number of lines of code, and significant cost overruns. They stuck with the same planning approach despite the ongoing problems. The project's complexity also made it hard to account for conflicts of interest among stakeholders, according to Srivastava.

From early on, Srivastava has combined advanced technical design with management, notably heading a team of 40 MIT students in the design, construction, testing and launch of a satellite. "I was always interested in strategic technical decision making as a way of improving efficiency and effectiveness," she said.

Srivastava is active in Women in System Design and Management (WiSDM). Prior to her term as an SDM fellow, Srivastava was a senior systems engineer at Raytheon and will return to the company as deputy technical director of electronic warfare.

Tuesday, July 10, 2012

Patrick Wineman, SDM '12: Systems Engineering and Management — On the Job and in the Classroom

By Kayla Ngan

Patrick Wineman
Photo by Kathy
Tarantola Photography
Patrick Wineman, a first year student in MIT's System Design and Management Program (SDM), will be the first to tell you about the importance of on-the-job training. In fact, were it not for the ten years he has spent working for the Navy as Lead Systems Engineer for the Countermeasure, Anti-Torpedo — a new Navy weapons defense system — and as Technical Project Manager for the Surface Ship Torpedo Defense, he might have not gained the systems engineering and management perspective he has today. From coordinating multiple organizations on technical issues to create a comprehensive product to offering guidance on multimillion dollar budgets, Wineman certainly has experience. Yet, despite the on-the-job exposure to system design and management he has gained, Wineman decided to return to school to learn more about these subject areas and further refine his skills in the classroom.

After graduating from Stanford University in 2002 with a BS in mechanical engineering, Wineman thought about going for his master's degree. He considered Stanford's co-terminal fifth year master's program for mechanical engineering, and even stumbled upon MIT's SDM Program, but eventually decided he first wanted to work with mechanical design immediately. Ultimately, he wanted to first gain work experience — which he says, in retrospect, gave him long-term direction.

In 2003, Wineman joined the Navy as an ocean/mechanical engineer where he designed, analyzed, and oversaw the fabrication of the Anti-Torpedo Torpedo Impulse Launch Test Fixture and the Submarine Centered torpedo tracking array. Soon after, he was promoted to the position of testing and evaluation engineer in the Surface Systems Branch of the Undersea Defensive Warfare Systems office. Then, in 2007, when Wineman became the Lead Systems Engineer for the Countermeasure, Anti-Torpedo and the Technical Project Manager for Surface Ship Torpedo Defense, he became more heavily involved with both systems and management. Wineman explains, "I really grew into my role as the Lead Systems Engineer by taking on more project management and systems responsibilities. By working for the Department of Defense, I gained exposure to higher levels of systems engineering earlier in my career than I would have otherwise."

However, as he took on more and more responsibilities, he decided he wanted to return to school to solidify the systems engineering and management concepts that he had not learned as an undergraduate. Wineman explains that he looked at many graduate and MBA programs, but very few had curriculums that involved both technology and management in a structured way. In the end, after applying for and receiving the Department of Defense SMART Scholarship to fund his technical degree, Wineman enrolled in the SDM Program.

"Before coming to campus, I was really excited by the experience and diversity of my cohort. Now that I'm here, I enjoy that others are able to bring their own experiences and challenges in and outside of the classroom to the discussions," says Wineman.

After Wineman graduates from SDM, he plans to return to the Navy and hopes to apply the principles he's learned in the program to his work.

Tuesday, June 26, 2012

Looking for reproducible results

By Ted Smalley Bowen

James Truchard
James Truchard and his partners at National Instruments (NI) saw a business opportunity in one of the most routine tasks in science and engineering — the design of test and measurement systems. With a little tweaking, a common set of building blocks could meet a wide range of requirements, sparing labs the effort and expense of inventing their own systems. Four decades after the company's founding, NI's products help control everything from kindergartners' Lego robots to the CERN Large Hadron particle accelerator.

Truchard, NI's co-founder, president and CEO, met with fellows of MIT's System Design and Management Program on June 12, 2012 to discuss his experience guiding the University of Texas spinoff from startup in 1976 to the 6,300-person publicly traded company whose 2011 revenue topped one billion dollars. In the second SDM Speaker Series event of the year, the engineer-turned-executive described some of the factors that helped him and his partners successfully harness their technical ideas. [Note: Truchard was contacted after the event for this article.]

Truchard's formula involves a strong dose of prudence. A PhD in electrical engineering, he co-founded NI while working fulltime as a managing director at Applied Research Laboratories at the University of Texas at Austin. The company was self-financed and he moonlighted for three years, putting in some 100-plus hour weeks and sacrificing time with family, but it helped keep the company autonomous.

Bootstrapping can be difficult, but "people get venture capital and end up owning four percent of the company. And you need an exit plan, which is a challenge if you're trying to plan long-term," he said.

He emphasized the need for startups to generate revenue quickly. "He first established contacts with institutions and academia and understood their needs before starting to develop products," said SDM Fellow Marwan Walid Hussein. "This meant that his first products were relevant and on trend."

Truchard focused on the balancing act required to maintain a technological edge while managing a large organization. NI offers employees, many of whom are hired right out of school, technology and management tracks, allowing them some flexibility in shaping their careers.

"He sees it as a challenge finding a balance between being a technically driven company and one that's top-heavy with management. There's really no single good answer for this," said SDM Fellow Rajesh Nair, whose resume includes several startups. "I was also interested in his discussion on how you get creative types, who are by definition non-conformists, to focus and work together."

The company allows employees to pursue their own projects within regular work hours, and has hired and bolstering R&D during economic slowdowns. "In 2001 and 2009 we used the opportunity to pick up some talent and scale up R&D, where we had been under-investing. We told Wall Street what we wanted to do and warned them profit would be down," he said.

This reflects Truchard's preference for long term planning. In his summary, yearly plans address budgets, projects, and personnel assignments; five-year plans identify market opportunities and promising technologies (which for NI include electric cars and mobile devices); the 10-year horizon deals with the company's evolving vision; and a 100-year span is useful for airing the company's philosophy, which stresses innovation, integrity, and respect. "If you do that, each 90 days should add up and you just publish the results," he says. "There's some scrambling, but long-term should trump short-term."

Chunguang Charlotte Wang SDM '10 and SMART Coops Team Win Community Choice Award in MIT IDEAS Competition

Chunguang Charlotte Wang
By Lynne Weiss

Charlotte Wang of MIT's System Design and Management Program (SDM) and her teammates received a Community Choice award of $1,500 in MIT's annual IDEAS Competition and Global Challenge. SMART (Sustainable Management of Agricultural Resources and Trade) Coops is a mobile banking and payment platform to connect farmers in the Philippines to their agricultural cooperatives and in turn to banks, input suppliers, government agencies, and crop buyers via SMS text messaging.

The Philippines, with a young and educated workforce, has a growing economic presence. Agricultural production increased by 4.3% in 2011, but poor infrastructure limits agricultural efficiency and farmers typically earn about $4 a day, much less than their counterparts in China or Brazil. There are about twelve million farmers in the Philippines, with about 85% of them considered small. Agricultural cooperatives allow farmers to act as a single entity when applying for loans, buying inputs such as fertilizer and pesticides, selling their products, and investing in infrastructure such as refrigerated warehouses, rice mills, or fish-canning facilities. Even so, the network of small-scale farmers is fragmented and farmers often pay as much as 20% interest on loans. The goal of SMART Coops is to provide farmers and their cooperatives with tools that will give them more power in the supply chain.

MIT's IDEAS (Innovation, Development, Enterprise, Action, and Service) Competition is an invention and entrepreneurship contest that rewards projects for underserved communities. Now in its 11th year, it is known as "the Oscars of social impact at MIT," according to Alison Hynd, one of the 2012 presenters. The Community Choice awards were given to the three teams to receive the most on-line votes.

Wang heard about SMART Coops when Danny Castonguay, Sloan '13, sent an e-mail to the Sloan community asking for help from people experienced with start-ups. Wang said she was immediately attracted to the opportunity to use her background with strategy, policy, and processes on a project to aid people in the developing world. Prior to entering the SDM program, Wang worked for Washington State to implement a new HR system and bring lean processes to state-controlled liquor stores. At MIT, she was part of the PolyChroma team that won the Berkeley-Stanford Green Entrepreneurship Competition in 2011, and she and her husband Zhiyong Wang, SDM '11, entered the 2011 IDEAS Competition and Global Challenge with their Inner Mongolia Sustainability Project (EnerLong) which seeks to minimize soil erosion in Mongolia through sustainable energy development. Wang said she responded to Castonguay's e-mail right away and met with him and Leah Capitan, another member of the SMART Coops team.

"These efforts are never a one-person thing," Wang said. She explained that her background in processes, energy sustainability, agriculture, and social policy was useful to the SMART Coops team, but that Leah Capitan brought the necessary knowledge of and connections to the Philippines. Castonguay and Capitan will spend the summer of 2012 in the Philippines to develop a collaboration between SMART Coops and the University of the Philippines in Manila through MIT AITI (Accelerating Information Technology Innovation).

Wang, who received her degree from SDM in June 2012, said she did not expect to work on projects such as SMART Coops, PolyChroma, and EnerLong before entering the SDM program. But she recalled that during her first week at MIT, Pat Hale, Director of the System Design and Management Fellows Program, urged Wang and her peers not to limit their thoughts to what they had done in the past or imagined they would do. Wang said SDM courses gave her a strong foundation for branching out into new areas of research. "They push you," Wang said. "Courses like System Architecture are really hard! My brain was aching when I took it—but it gave me the tools for in-depth thinking about the details of a project and at the same time the ability to keep pulling back to look at the big picture."

Wang's plan for the immediate future is to continue work on Enerlong. The goal of this innovative technology design and consulting start-up is to provide comprehensive advice on sustainable development by using data about energy consumption, transportation routes, and population density to formulate designs for smart growth and energy management as well as operations services to fuel China's rapid economic growth.

This summer Wang will be a Senior Fellow in the first Harvard China SEED (Social responsibility, Empathy, Empowerment, and Dedication) Camp. The Harvard China SEED Camp connects Chinese students studying abroad to networks of social innovators and entrepreneurs within China. Wang hopes her future will give her a chance to teach as well as entrepreneurial opportunities. "I envision myself as a bridge between the United States and China," she said. "I hope to see EnerLong succeed and would love to share my experience with others."

Monday, June 18, 2012

Nirmalya Bannerjee, SDM '11: Connecting the Dots with SDM

By Cody Ned Romano

Nirmalya Bannerjee
Photo by Kathy
Tarantola Photography
A former project manager for Apple, Nirmalya Banerjee sums up his experience in SDM by drawing upon the wisdom of his company's founder. "Embrace different opportunities," Steve Jobs said, "because you never know how and when you'll be able to look back and connect the dots."

Banerjee's resume is a testament to Jobs' advice. An Indian national scholar in mathematics, Banerjee began his career as an electrical engineer, followed it with an MBA in marketing and went on to work as an SAP consultant. After five years as a consultant, he wanted to grow and explore new horizons.

Interdisciplinary courses such as System Dynamics drew Banerjee to SDM. He also appreciated that SDM integrated engineering and management via systems thinking. Diving into the curriculum, Banerjee earned close to 178 academic credits in just 13 months. This included studying Negotiation at Harvard Business School and learning basic Chinese. "SDM", says Banerjee, "was an immensely enriching experience. It provided unparalleled opportunities to learn and compete with the best and brightest minds and to network with industry leaders of the future."

"SDM is the place where I'm trying to connect the dots," Banerjee said. "It is where I'm trying to integrate all that I've learned through my education and experience to develop a holistic perspective for the future."

In addition to his formal studies, Banerjee worked on an MIT project aimed at improving public health in India. Nearly half of Indians who develop cataracts go blind because of untimely detection. The equipment for detection is too expensive and is not readily available in the rural medical centers. To facilitate this, Banerjee, along with his team, helped develop a plan for delivering affordable technology for residents of Indian cities and villages — a smartphone app and a clip on device that scans the eye for cataracts. Their project won the MIT Global Challenge Choice Award, which provided $10,000 in funding.

Prior to matriculating at SDM, Banerjee worked at Apple Singapore as a project manager where he led a team of 32 consultants who supported the SAP system, Banerjee focused on developing innovative process changes to tackle global challenges. A significant change he initiated by involved redesigning the Asia Pacific month-end closure process of business activities. This resulted in greatly reduced closure time and created more opportunities for the business teams to carry out critical order fulfillment operations. These new processes introduced by Banerjee have since been standardized as the team's regular business processes.

Banerjee's SDM thesis, which reflects his continuous commitment to redesigning and simplifying complex business processes examines conflict mediation in the multi-vendor scenario from a systems perspective. It provides a quantitative angle to a qualitative concept, such as conflict and mediation in a multi-sourcing environment, using system dynamics modeling and sensitivity analysis. "Other project managers should be able to use my research to identify which conflict factors should be the key focus areas for information technology project managers in a multi-sourcing environment and which mitigation strategy(ies) work(s) best to increase the productivity and output of their teams," he said.

After he graduates from MIT in June 2012, Banerjee will work for Open Access Technology International (OATI), an energy software company located in Minneapolis. There, as a development manager, he will apply systems thinking to create software solutions for emerging fields like smart grids and energy trading. By moving into the energy sector, the professional who began his studies in electrical engineering is coming full circle. Yet he will enter the industry with a fresh perspective, having integrated all that he has learned, embracing the new opportunities and continuing to practice what he learned at SDM — connecting the dots.

"This is an ongoing process for me and I will continue to interface with both MIT and SDM," he said. I want to contribute to the program and the Institute in any way possible, and use my education to make a larger impact someday. This is when I will know that I have finally connected all of the dots."

Friday, May 18, 2012

Jon Hickey, SDM '12: Systems Thinking and Complex Project Management

By Lynne Weiss

Jon Hickey
Photo by Kathy Tarantola
Why would someone with two master's degrees want to pursue a third? Ask Commander Jon Hickey, SDM '12, whose career spans 18-years in the United States Coast Guard (USCG).

"MIT is what initially attracted me because I had served under many Coast Guard officers who had attended MIT programs," said Hickey, who holds bachelor's and master's degrees in civil engineering and a second master's in project management. "What I saw in these mentors was what made them superior problem solvers: an ability to turn issues on their side, develop solutions, and foresee unintended consequences."

MIT's System Design and Management (SDM) program attracted him next. Although he also considered another program focused primarily on leadership, Hickey says that SDM "appealed to me because it offered opportunities to refine and improve my existing technical expertise as well as to strengthen my skills in leadership, management, and systems thinking."

In Hickey's first SDM course, Dr. Qi Van Eikema Hommes' "Systems Engineering," he was part of a team that worked on a project to apply the Systems Theoretic Accident Model and Processes (STAMP)–based Process Analysis (STPA) to avoid hazardous conditions during integration of renewable energy systems into the electrical grid. Hommes worked closely with the team, then encouraged them to write up their project and submit it to INCOSE—the International Council on Systems Engineering. The paper was accepted, and as lead author, Hickey will present it at the organization's annual symposium in Rome in July 2012.

As valuable as the SDM classes are, Hickey said his SDM cohort is equally important. Although his fellow students are also mid-career professionals (several of whom, like Hickey already hold two master's degrees), he said the diversity of their roles, experience and industries and SDM's team-based class assignments help enlarge his capacity for seeing situations from various viewpoints. Moreover, the bonds he is forming will last throughout his professional career.

After he receives his MS in engineering and management this summer, Hickey will move to New Orleans to oversee a $4 billion project devoted to building a new fleet of USCG patrol boats that will meet modern maritime safety, security, and stewardship mission requirements. Armed with his SDM education, he will use systems thinking to address the technical, managerial, and socio-political components of this multi-year effort and to emulate what he so admired in his USCG mentors who also studied at MIT: the ability to turn issues on their side, see the unintended consequences, and solve complex problems.

Thursday, April 5, 2012

Elon Musk, SpaceX, Tesla

Innovation, Global Impact, and Achieving Success

By Kayla Ngan

Elon Musk is a company creator—and an excellent one at that. In addition to being co-founder of Zip2 Corporation, Tesla Motors, and PayPal, Musk founded Space Exploration Technologies (SpaceX). He currently serves as CEO and CTO at SpaceX and as CEO and Product Architect at Tesla. In short, he is no stranger to entrepreneurial success. From conceiving the world's largest Internet payment system, to constructing the first private spaceship to successfully return from Earth's orbit, to designing the first electric sports car, it would seem that Musk has company creation down to a science.

Elon Musk
Photo courtesy of SpaceX
On Thursday, March 15, 2012, MIT's System Design and Management (SDM) Program held its first Speaker Series event of the year by inviting Musk to speak with its fellows. The series encourages industry leaders and SDM Fellows to share insights and experiences pertinent to challenges and advancements in business and technology. The session, which was open to SDM Fellows only, was very well-received by those in attendance.

Throughout the hour, Musk spoke about innovation, global impact, and his personal philosophies on achieving success. He also highlighted the importance of diversity of skills, personalities, and mindsets that are necessary for a business to grow and prosper.

When asked how he arrives at new ideas for new ventures, Musk explained, "the Internet, sustainable energy, and space exploration were the three ways I thought technology would most affect the future of humanity and I wanted to be involved in that." He described his recognition of the "need to accelerate the advent of electric cars" and his vision for people to live on other planets and therefore making it possible for humanity to become multi-planetary. To turn these dreams into reality, Musk's solution was to start companies.

Launch of Dragon spacecraft via
Falcon 9 rocket in December 2010
Photo by SpaceX/Chris Thompson
Nowadays, Musk splits his 90-hour work weeks between SpaceX and Tesla Motors—about 45 hours per company—and claims that it's "not really that much." Through these endeavors, he has identified critical thinking, attention to negative feedback, and reasoning from first principles—the most basic, elemental laws in a given field—as crucial for thriving in the workplace. Musk explained that people should embrace negative feedback from others as if "they're giving you gold" and then adjust their actions accordingly. As for first principles, Musk stressed that fundamental truths in an industry, not analogy or past precedent, should be used to determine if a product will work.

For many in attendance, Musk's mention of first principles was a welcome reminder of what they've learned previously. As Neil Gadhok, co-chair for this event, commented, "I was glad to hear his discussion on reasoning from first principles, as it aligned with my own experience and what we have been taught at MIT. I and certainly many in the SDM cohort will keep the ESD.34 System Architecting principles and Elon's insights in mind as we return to industry."

Though Musk certainly has his hands full now with his upcoming launch for SpaceX, some might wonder what else he has up his sleeve. Musk told the audience, "Double decker freeways would be awesome."

Tuesday, April 3, 2012

WiSDM: 2011 Report

By Melissa Rosen, SDM '11

Women in SDM (WiSDM) is a student-focused organization, conceived and led by women in MIT's System Design and Management (SDM) program. Its mission is to empower female leaders and to enhance the ongoing learning experience for SDM students and alums. WiSDM's five-year goal is to achieve a balanced SDM cohort.

WiSDM members from the SDM classes entering in 2011 and 2012 include (left to right)
Top row: Carina Ting, Kathleen Voelbel, Katie O'Brien
Middle row: Andrea Ippolito, Solhee Lee, Tina Srivastava, Genevieve Flanagan, Elizabeth Cilley, Aleksandra Markina-Khusid
Bottom row: Lesley Yu, Farrah Tazyeen, Melissa Rosen, Leena Ratnam, Haibo Wang
Photo by Kathy Tarantola Photography
In 2011, in order to build and strengthen its foundation, WiSDM focused on designing and implementing several initiatives to reach out to women who have an interest in engineering and management. These efforts included:
  • Launching a WiSDM page on the SDM website which explains what WiSDM is, why it was formed, and how to get involved. The page includes profiles of SDM students, alumnae and faculty, as well as information on other women's groups at MIT.
  • Inviting women from industry who could be prospective SDM applicants to WiSDM's annual MIT SDM Conference on Systems Thinking for Contemporary Challenges.
  • Hosting a pre-conference "Breakfast for Engineering Leaders" that highlighted the role of women in engineering leadership.
    Deborah Nightingale, who is a Professor of the Practice of Aeronautics and Astronautics and Engineering Systems, the Director of the Center for Technology, Policy, and Industrial Development, and Co-Director of the MIT Lean Advancement Initiative, presented a special keynote at this event (see sidebar).
  • Collaborating with other women's groups at MIT such as the Society of Women Engineers (MIT SWE and the Graduate Women at MIT (GWAMIT) to co-host a mentoring panel for female undergraduates. WiSDM panelists discussed their extensive industry experience and why the SDM program might be of interest to these students. WiSDM members also participated in the Gordon-MIT Engineering Leadership (GEL) program's weekly leadership labs by offering guidance to undergraduates.
  • Supporting the GWAMIT Fall Leadership Conference and Spring Empowerment Conference in 2011 as well as the Sloan Women in Management (SWIM) Conference in 2012. These events drew some of industry's most powerful women in engineering and management, including Marissa Mayer, VP of Google; Laura Sen, CEO of BJ's Wholesale Club; and Bettina Hein, CEO of Pixability. Hein is an MIT Sloan alum and founder of SheEOs, a network for female CEOs and founders of growth companies. Through WiSDM's interface with Hein, the group is now using Pixability's services to create a WiSDM marketing video. 
  • Welcoming nine new members from the 2012 SDM cohort. Several have already assumed leadership roles in the SDM and MIT communities. They include Katy O'Brien, Co-Chair of the SDM Leadership Committee; Elizabeth Cilley Southerlan, Social Co-Chair; and Leena Ratnam, Co-Lead of the SDM Tech Trek and an organizer for the SWIM conference's sponsorship team.
In addition, two women from the 2011 SDM cohort, Andrea Ippolito and Melissa Rosen (WiSDM President) were nominated for the 2011 SDM Student Award for Leadership, Innovation, and Systems Thinking. Ippolito is Co-Chair of the Sloan BioInnovations Conference and Co-Director of the MIT 100K Accelerate Contest. Another WiSDM leader, SDM '11 Tina Srivastava, is a mentor for GEL and organizer for the 2012 SWE Regional Conference for professionals and collegiate members which was hosted by MIT.

WiSDM's major initiatives for 2012 include the following:
  • Collaborating with MIT SWE, GWAMIT, GEL, and industry to develop and implement a mentoring program to serve women both within and outside of MIT who are interested in learning about SDM.
  • Enlarging WiSDM membership to include men to assist in reaching out and promoting SDM to prospective female applicants.
Please contact for more information or to get involved.

Professor Deborah Nightingale presents keynote at WiSDM's "Breakfast with Engineering Leaders"

Prior to the start of the 2011 annual MIT SDM Conference on Systems Thinking for Contemporary Challenges, WiSDM members welcomed over 30 early-to-mid-career industry women to a "Breakfast with Engineering Leaders" at the MIT Faculty Club. Deborah Nightingale, who is a Professor of the Practice of Aeronautics and Astronautics and Engineering Systems, the Director of the Center for Technology, Policy and Industrial Development, and Co-Director of the MIT Lean Advancement Initiative, delivered a keynote presentation.
Professor Deborah Nightingale delivered a
keynote address at WiSDM's "Breakfast for
Engineering Leaders" in October, 2011
Photo by Alex Thomas, SDM '11

Professor Nightingale spoke about the challenges and rewards of a career that combines engineering and management, as well as the value of understanding and applying systems thinking. She described her beginnings as a computer scientist in her hometown of Dayton, Ohio, and her path to MIT via the several senior executive positions she held at Allied Signal Engines.

SDM '11 Tina Srivastava welcomes
guests at WiSDM's "Breakfast for
Engineering Leaders"
Photo by Alex Thomas, SDM '11
Professor Nightingale also shared several lessons learned along the way. Perhaps the most important of these lessons was that "Systems thinking works everywhere." She explained that her background in systems engineering and her broad-based perspective in engineering and management enabled her to navigate across departments by thinking holistically about the people, processes, information, and technology involved. Her training has helped her to balance competing objectives while she held leadership positions in operations, engineering, and program management.

Other insights Nightingale provided included a discussion on the tendency of engineers to resist change and how the soft stuff is really the hard stuff. She stressed that engineers often get caught up with methods and design and forget that people are needed for implementation. She emphasized the importance of understanding workplace culture in order to better elicit and manage sustainable change.

Professor Nightingale concluded by sharing her views regarding the importance of having passion for one's work, asking for opportunities to broaden your experience, networking, and finding work-life balance.

Friday, March 30, 2012

Eugene Kwak, SDM '12: From SpaceX to SDM

By Amy MacMillan, News@MITSloan

Eugene Kwak
Photo by Kathy Tarantola Photography
SDM student Eugene Kwak literally had a front-row seat in the ambitious private-sector space race.

Kwak, who is a member of the SDM class that entered in 2012, was the lead flight termination systems engineer for the Falcon 9, the first liquid-fuel spacecraft launched into orbit by a private company, Space Exploration Technologies (SpaceX). After launching from Cape Canaveral Air Force Station on June 4, 2010 (Kwak's 31st birthday), the unmanned rocket completed two orbits around the earth.

As lead engineer for SpaceX, Kwak's job was to design and monitor a system that would blow up or cut off the fuel supply of the Falcon 9 rocket in case it malfunctioned or went off course toward a heavily-populated area.

"There was a technical, as well as a political aspect, since human safety is involved," Kwak said. "I had to deal with multiple organizations, such as the Air Force, NASA, and the FAA, among other entities." Kwak spent many hours working with the Air Force to ensure that SpaceX met the thousands of technical requirements that allowed the company to launch from Cape Canaveral. During the launch, he was "on the console" in charge of subsystems and leading his team in running tests on the rocket. It was a job that definitely had its "stressful moments," he admitted.

Kwak, who has an MS in mechanical engineering from the University of Southern California, said he was humbled by the experience of being involved in the historic launch.

"The people I was surrounded by were truly brilliant. It was like a David vs. Goliath situation because we were competing against giants like Boeing and Lockheed Martin, in a market which has not been too kind to new entrants," Kwak said.

SpaceX was recently chosen as one of Technology Review's "50 Most Innovative Companies of 2012" and was awarded a $1.6 billion NASA contract to carry cargo to the International Space Station.

Kwak is a full-time, on-campus SDM student, and he will most likely not return to SpaceX when he graduates, because he plans to pursue a career in product management.

"I love technology and I want to apply it across different industries, not just aerospace," he said.

The SDM program, which resides within the MIT Engineering Systems Division and is jointly offered by the MIT School of Engineering and the MIT Sloan School of Management, culminates in an SM in engineering and management and is just the right fit for Kwak, as he needs formal management training, but does not want to abandon engineering.

"I thought it was really important to bridge the gap between the business side and the engineering side and I thought this would be the best program for me," he said.

Kwak is also a vice president of the MIT Sloan Asian Business Club and is a member of the Management Consulting Club.

Thursday, March 15, 2012

Marwan Hussein, SDM '12: Complexity and Interplanetary Space Systems

By Eric Smalley

Marwan Hussein, SDM '12
Photo by Kathy Tarantola Photography
Marwan Hussein, SDM '12, is truly a man of the world. German-born and of Iraqi descent, he lived in Jordan before moving to Canada, and his work takes him to places ranging from the Arizona desert to the Arctic. His job is literally out of this world.

Hussein is a space systems engineer. His latest work for Canadian aerospace firm Optech Incorporated involved leading the design and development of critical guidance and navigation systems for a pair of robotic landers that are slated for launch. "One is on a NASA mission that is going to an asteroid four years from now and the other one is on an Indo-Russian mission that's going to the moon in 2014," he said.

Having a commercial airline pilot for a father accounts for Hussein's peripatetic background and interest in aerospace. Having a vocation that involves systems that span considerable chunks of the universe accounts for his interest in MIT's System Design and Management (SDM) program.

Hussein's experience includes developing space mission concepts, designing critical spacecraft sub-systems, leading multidisciplinary teams, and managing multimillion dollar programs for NASA and the Canadian Space Agency. Much of his work involves introducing innovative designs, yet reducing cost and complexity through the use of commercial off-the-shelf technologies.

Hussein was a co-investigator in several NASA and Canadian Space Agency (CSA) field tests where he worked with astronauts on new rover and sensor prototypes in the Arizona desert and in an impact crater in Devon Island in the Arctic. Such tests aim at preparing for future missions that will see humans return to the moon and set foot for the first time on Mars. His new ideas and dedication in these expeditions earned him awards from NASA.

Hussein's interest in complex systems emerged as he took on increased responsibilities. "I was first working on certain spacecraft subsystems, such as vision and guidance," he said. "As I progressed I was assigned more responsibility in terms of leading the mission's design and managing teams of 10 to 15 engineers, so I was starting to look at the big picture."

"It was clear to me two years ago that I lacked the systems perspective, the holistic engineering perspective on how to develop these complicated systems of systems," Hussein said.

He searched for a graduate program that could give him a formal education in systems thinking. SDM, with its focus on system architecture, product design, systems engineering, and management, was the clear choice, he said.

Hussein's goal is to think from a holistic perspective and apply system dynamics and systems engineering principles to building orbiters, landers and rovers. In short, he's looking for SDM to give him the skills to design and manage the next-generation of planetary exploration systems.

When he finishes the SDM program, Hussein will either return to Optech or get involved with a startup. One of the appeals of MIT is its strong culture of startups, he said. If he does go the startup route, it could well be in the emerging field of commercial space exploration.

Hussein has already lent his consulting expertise to commercial space startups, including one of the entrants to the Google Lunar X Prize competition. The competition will award $20 million or more to the first private company to successfully land and operate a lunar rover by 2015.

These days, most movers and shakers in the space industry are seriously looking to the commercial space exploration market, said Hussein. Perhaps in a few years he'll be one of them.

Wednesday, March 7, 2012

Business cycle tracking method spots downturns - SDM Pulse, Spring 2012

By Felipe Bustos, SDM ’11

Problem statement: Although manufacturing represents 12% of the US economy and the Obama administration is emphasizing manufacturing as a way to stimulate the creation of highquality jobs, most data related to manufacturing are expensive and suffer from inherent biases.
A new metric: For their thesis project, Bustos and co-author Fernando Barraza, SDM ’10, developed a metric that characterizes US manufacturing using a simple, yet meaningful, mathematical representation derived from public data.
The metric, Manufacturing Composite Index of Leading Indicators (MCI), taps data from the US
Census Bureau and the US Bureau of Labor Statistics that includes:
time series for new orders
total inventory
capacity utilization
average weekly hours of manufacturing
Initial findings: After several months of intensive data mining, Bustos and Barraza compiled graphs plotting the MCI against GDP for several subsectors. When they benchmarked the Primary Metals subsector MCI against the US Manufacturing Gross Domestic Product (GDP), they found that this MCI anticipates fluctuations in the GDP by 5 to 9 months. They had found a metric capable of signaling recessions.

Figure 1. This chart shows the correlation between
the MCI and US manufacturing GDP. The MCI anticipates
the GDP by 5 to 9 months.
 The MCI would have indicated the recessions of 2001 and 2007/2008 well before the official government declarations. For example, the 2001 recession began in March and ended in November of that year. The official declaration was not issued until November 26. The MCI would have given its first warning of the recession in March.
The MCI correlates with GDP on 18 of 20 manufacturing subsectors defined by the North American Industrial Classification System. In looking at industry subsectors, Bustos and Barraza found that some lead their respective GDPs more than others. Food products, petroleum and coal products, primary metals, and fabricated metals turn out to be prime movers in manufacturing.
Using the MCI
Businesses can use the method as a management tool in several ways:
delaying expansion or acquisition plans to wait for better prices
renegotiating contracts for raw materials
adjusting hiring plans
decreasing capacity utilization to reduce inventory
shifting sales strategies

Figure 2. This chart shows the Inventory Coverage index for the Machinery
Manufacturing subsector. The green band is the safe zone for inventory
levels and the pink band is the warning zone. The blue line is the industry
average. The yellow and green lines are Caterpillar’s and John Deere’s
inventory levels respectively.

In addition, investors can use the MCI method to adjust their valuations of companies.
Businesses can also create Inventory Coverage indexes for each subsector. These allow businesses to identify safe inventory levels for their sectors, track how their sectors perform against this benchmark, and react accordingly.
The research work that Bustos and Barraza conducted demonstrates how a systematic approach to data analysis can offer significant understanding of fluctuations in the complex US manufacturing economy.
About the Author
Felipe Bustos is a Captain in the Chilean Air Force. He serves as an advisor to the CEO of Empresa Nacional de Aeronáutica (ENAER), the Chilean national aircraft maintenance, repair, and parts manufacturing company. He recently completed MIT’s System Design and Management (SDM) Program and earned an MS in Engineering and Management.