1. take the lead in system innovation
a call to arms
take the lead in system innovation
Peter Kalish
GE Global Research
PROMODEL User’s Conference
May 2006
I attended my first PROMODEL conference in 1991, as my wife entered her last two weeks of pregnancy with my 2nd son. At that conference, I told a story. It sounded a lot like Goldratt’s “The Goal”. It had the dinosaur manufacturing manager that couldn’t see beyond his operator’s efficiency ratings. It had upset customers and out-of-control reject rates. There were cycle time problems and frustrated executive teams. At that 1991 conference, I described how I used ProModel (DOS) to prioritize quality improvement efforts. I related the critical meeting where the skeptical business leader locked us in a room, intent upon commanding us to abandon our silly models and get to fixing the problems…and how that meeting ended very differently…with the business leader buying into the system changes that were needed and setting in motion a series of events that took a product line from its deathbed to a best practice in GE.
It was a great story and I was glad to have had the experience…to have had the opportunity to tell the story to a bunch of kindred spirits at the conference. Only after another decade of doing similar work did I realize what that story was about. It wasn’t about the cool routines I wrote or the statistical analyses I performed. It was about a single word (next slide)…

2. { us }

3. of Our Skill Set and Our Vision
better communication tools
(telephone, networks, internet, cell phones)
faster communication of consumer alternatives
increasing consumer demand for new products
faster new product
introduction
Market Forces are
Increasing the Value
of Our Skill Set and Our Vision
accelerated delivery of new production (or service) systems
better system designers

4. the pace of market change is almost scary
Diffusion of Technology into US Households
SOURCES: U.S. Bureau of the Census (1970 and various years); Cellular Telecommunications Industry Association (1996); The World Almanac and Book of Facts (1997).

5. the technology adoption lifecycle (Geoffrey Moore, Crossing the Chasm)
early market
the
chasm
the
tornado
mid-market
late market

6. adoption lifecycle accelerated
e.g., VCR
(1980 – today)
e.g., telephone (1910 – today)

7. systems…

8. simulating the early market…questions
how many products can I launch simultaneously?
how will existing operations be impacted by a new product?
how might the manufacturing process look?
key stakeholders >

9. early market tools modify resource plans to meet product launch dates
identify impact of key technical risks
coordinate efforts in cross-functional teams
assess viability of marketing plan ($$ allocation)
manage resource (people, equipment) interdependencies
project revenue stream under different scenarios
design pilot production facilities
analyze supply chain alternatives
project throughput from conceptual design of factories

10. simulating near the “chasm”…questions
do my suppliers have enough capacity?
can I produce orders if the market takes off?
can I distribute products when the orders come in?
key stakeholders >

11. tools for jumping the chasm
run scenarios on different market segments
assess impact of targeting options on sales force
anticipate risk of stretching resources too thin
design supply chain
design factories
assess stress on resources due to poor market targeting
design order fulfillment workflow systems

12. simulating in the tornado…questions
how can I improve my workflow?
do I have enough cash to support runaway orders?
do we have a sufficiently large sales force?
key stakeholders >

13. tools for managing the tornado
identify throughput increase opportunities
assess staffing plan
collaborate with suppliers to increase capacity
identify workflow deficiencies and opportunities
assess sales force effectiveness programs and incentives
support financial projections (revenue and cost increases)

14. simulating the mid-market…questions
am I doing things most efficiently?
can I improve product or service quality?
are there other sources of revenue for this product?
key stakeholders >

15. tools for mid-market navigation
design product line upgrades for new market segments
assess impact of quality improvement alternatives
design spare parts production facilities
find cost takeout opportunities
design service offerings
perform risk analysis on long term service agreements

16. simulating the late market…questions
how can I change the product to improve margins?
can I expand my service and spare parts business?
should I divest myself of this product line?
key stakeholders >

17. tools for riding the late market
improve productivity (more with less)
assess product redesign costs
analyze product line consolidation alternatives
perform due diligence for acquisition/divestiture
improve productivity in services (more with less)
assess service upgrades, cost and revenue implications

18. back to superman our role as systems innovators…
know the product (service) lifecycle better than anyone in our organizations
use simulation tools to be persuasive
know what the key issues are
address those issues visually and through data
act and speak with confidence (“do you believe?”)

19. learn from Marc Antony “…for Brutus is an honourable man”
“persuasion”…only now do I really understand what ProModel has offered me in my career. It’s not just a cool modeling tool. It is an instrument of persuasion. My role at GE isn’t to come up with just a technically good solution. It’s to make changes. And making changes means persuading others. That’s what we’re all here to discuss. The technical part of the presentations at this conference are interesting, kind of like picking up a book of brain teasers. But we’re not paid by our employers to solve fun riddles. We’re paid to move mountains.
All of us, at this conference, are unique individuals. We have both the intellect and passion needed to make significant changes in our work environments. If we shoot short of that goal, we’re letting ourselves and our organizations down.
I show an image of Marc Antony because his speech, in Shakespeare’s Julius Caesar is one of the few things I actually remember from high school English class. I remember the power of persuasion that Shakespeare designed into that speech. Moving a hostile crowd to change its view through persuasion is one of those things I find exciting in my career. Simulation has given me that power. And that’s what I want to discuss today.
I’m going to spend the next 30 minutes or so talking about “the mountain” we’re capable of moving…and how we can make that happen with simulation.
“…for Brutus is an honourable man”

20. persuasion, an example… capacity entitlement at GE Solar
{notional data}
throughput
percent of current raw material input

21. four things to remember…
1. our time has arrived
2. there is no shortage of opportunity
3. don’t just talk, be persuasive
4. be confident, you have earned it