Ira A. FULTON Schools of Engineering Global Challenges in Industrial Engineering and Operations Management for the 21 st Century Ronald G. Askin, Professor

Ira A.

FULTONSchools of Engineering

Global Challenges in Industrial Engineering and Operations Management for the 21st Century

Ronald G. Askin, Professor and DirectorSchool of Computing, Informatics, and Decision Systems Engineering

Arizona State UniversityTempe, AZ 85287-8809 USA

[email protected]

School of Computing, Informatics, and Decision Systems Engineering

Kuala Lumpur, January 2011

Overview

• On-going global manufacturing and economic activity trends

• Where US manufacturing research and activity are headed

• What are the implications/opportunities for IEs globally?

• Where is IE’s future



Arizona and ASU

http://engineering.asu.edu/sites/default/files/gallery/IMG_0946.jpg

http://en.wikipedia.org/wiki/File:Lake_Powell_Above_Wahweap_Marina.jpg



Shaping the World

Politics and

Cultures

Environment and Nature

Economics and

Ingenuity



Manufacturing Trends and Status Today

• Global Production/Supply Networks

• Transit costs and speeds changing slowly

• Raw material availability, labor costs, markets vary globally

• Information access is level; education becoming level

• Transition from Mechanical/Physical to Electrical/Info Dominance

• Green for Sustainability (Financial and Environmental)

• Health applications are growing markets

• Nanomaterials are solutions on the horizon

Manufacturing Creates Wealth!

Services fleetingly facilitate life but limit wage growth due to

standardization, scalability and automation difficulty.



Globalization!



www.worldatlas.com

Fab

Intel Wafer Fab and Test/Assembly Facilities

Assembly/Test

Region Revenue Asia/Pacific 51% Americas 20% Europe 19% Japan 10%

It’s Markets, Resources and Economics



WTO: Peace and Prosperity Through Cooperative Commerce

153 Member Countries, 30 Accessions (in process) in 2009

WTO: A system of trading rules and forum for intergovernmental negotiation



Why is US IE Changing So Much So Fast?

• Thomas L. Friedman, Hot, Flat and Crowded

- Level playing field through logistics and global connections (web)

- American expectations for good wages, clean jobs/environment

- High competition outsourcing, off-shoring

• Opportunity of new science – bio, info, nano

• Growth of service expenditures (health care, finance)

• Dragged along by our engineering counterparts



But are We Changing?

• Of Top 20 Ranked SchoolsIndustrial and Systems Engineering Industrial and Operations Engineering

Industrial Engineering and Operations Research Industrial and Manufacturing Engineering

Management Science and Engineering Industrial Engineering and Management Science

Operations Research and Information Engineering Industrial and Systems Engineering

Industrial and Systems Engineering Industrial and Systems Engineering



Industrial Engineering and Operations Research Industrial and Systems Engineering

Industrial and Enterprise Systems Engineering Industrial Engineering

Operations Research/Industrial Engineering Industrial, Systems and Operations Engineering

• IIE Members vote Down Name Change in 2009



Industrial Engineering in the US – Past and Present

New Markets Outside of Manufacturing

1910 2010

HealthcareHomeland Security

Finance

Logistics

Info Services

EntrepreneurWe’ve grown out but have we grown up?



The Scientist/Engineer Today

The Doctor The Civil Engineer

CAT Scan PET Scan

Realtime tracking(Cameras, GPS)

Embedded structural health monitoring/control



Revolutionary Change in Technology

Moore’s Law Human

Genome Decoding

n 1990: $3B, 13 yrsn 2009: $350k, 13 weeksn 2015: $300, 13 min.

Gordon Moore's original graph from 1965



The IE Today

http://www.strategosinc.com/value_stream_mapping1.htm

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Methods have stagnated.Remaining traditional Manufacturing opportunities in US are limited.



IEs Improve Integrated Systems

How must faster/better/cheaper can we define, model, and improve a system today than in 1979?

Have we changed at the same rate as others over the past 30 years?

While the world became a ubiquitous information, global society, IE found better icons for flowcharts!

Today’s systems are complex and integrated. Why aren’t we flourishing most in complex environments?



Where Could/Should We Be?• Virtual Reality Models of Systems – miniature Ron sits on

the part and flows through the machine and plant

• Virtual Reality Models of datasets with automated coloring, sizing for outliers

• Automated Simulation/Optimization Models from Capital Asset files

• Automated model decomposers, data cleaners and preprocessors

• Full data history on shop and order status with real-time planning updates – customers manage their orders.

We’re too Cheap!



The Prevailing Business Attitude

Phil Knight, Founder of Nike

“There is no value in making things any more. The value is added by careful research, by innovation, and by marketing.”

Deputy Director, DARPA 7/19/2010

“To innovate we must make.”



World Gross Domestic Product

1970 1975 1980 1985 1990 1995 2000 2005 20080

5000

10000

15000

20000

25000

30000

35000

40000GDP by Region

AfricaAsiaCentral AmericaEuropeNorth AmericaSouth AmericaWorld

YEAR

CO

NS

TA

NT

19

90

US

BIL

LIO

NS

Data Source: http://unstats.un.org/unsd/snaama/dnlList.asp



GDP – Asia



GDP per Capita-Global Wealth Distribution

1970 1975 1980 1985 1990 1995 2000 2005 2008$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000GDP / Population

Africa

Asia

Central/Latin America

Europe

North Amer-ica

World

YEAR

19

90

US

D P

er

Ca

pit

a



GDP/Capita – Asia and US



GDP Growth Rate: Current GDP/1970 GDP

1970

1975

1980

1985

1990

1995

2000

2005

2008

0

1

2

3

4

5

6 GDP Growth Rate by Region

AfricaAsiaCen-tral Amer-icaEu-ropeNorth Amer-icaSouth Amer-icaWorldYEAR

GR

OW

TH

RA

TE

Asia Rising, Europe Falling

0

1

2

3

4

5

6

7

8Manufacturing Growth Rate by

Region

Africa

Asia

Central Amer-ica

Europe

North Amer-ica

South Amer-ica

WorldYEARG

RO

WT

H R

AT

E



Export Dependence by Region

1970 1975 1980 1985 1990 1995 2000 2005 20080

0.1

0.2

0.3

0.4

0.5

0.6Total Exports/GDP by Region

Africa

Asia

Central America

Europe

North America

South America

World

YEAR

PE

RC

EN

TA

GE

Asia growing rapidly



Export Importance by Country



Trends in Interdependency

1970 1975 1980 1985 1990 1995 2000 2005 20080

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Total Imports/GDP by Region

Africa

Asia

Central America

Europe

North America

South America

World

YEAR

PE

RC

EN

TA

GE



Import Percentages by Country



Import Export Growth Rates

1970

1975

1980

1985

1990

1995

2000

2005

2008

0

5

10

15

20

25Export Growth Rate by Region

AfricaAsiaCen-tral Amer-icaEu-ropeNorth Amer-icaSouth Amer-icaWorld

YEAR

GR

OW

TH

RA

TE

1970

1975

1980

1985

1990

1995

2000

2005

2008

0

2

4

6

8

10

12

14

16

18

20

Import Growth Rate by Region

AfricaAsiaCen-tral Amer-icaEu-ropeNorth Amer-icaSouth Amer-icaWorld

YEAR

Central America Gaining Net SurplusAsia Expanding Activity Rapidly



Observations

US has room to consume more of the world’s goods

US spends most on services, not products

Central America and Europe highly dependent on trade

US, Japan and South America too insular?

Japan continuing to wane

Growth linked to global trade, particularly for small economies



What’s the Role and Impact of Manufacturing?



Global Manufacturing Growth

1970 1975 1980 1985 1990 1995 2000 2005 20080

1000

2000

3000

4000

5000

6000

7000

8000

9000

Manufacturing by Region

AfricaAsiaCentral AmericaEuropeNorth AmericaSouth AmericaWorld

YEAR

CO

NS

TA

NT

19

90

US

BIL

LIO

NS

Europe, No. America losing ground;Asia gaining



Manufacturing Activity by Country



Manufacturing Importance by Region

1970 1975 1980 1985 1990 1995 2000 2005 20080.1

0.15

0.2

0.25

0.3

0.35

Manufacturing/GDP by Region

Africa

Asia

Central America

Europe

North America

South America

World

No./So. America , Europe losing ground

World relatively constant

Asia Gaining



Manufacturing Production per Capita

1970 1975 1980 1985 1990 1995 2000 2005 2008$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Manufacturing / Population

Africa

Asia

Central America/Latin AmericaEurope

North America

World

YEAR

19

90

US

D P

er

Ca

pit

a

Surprising relative growth consistency except Africa



Manufacturing per Capita by Country



Population Growth Rates

1970 1975 1980 1985 1990 1995 2000 2005 20080

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

6,000,000,000

7,000,000,000

8,000,000,000

Population Data by Year

Africa

Asia

Europe

North America

Latin America / Central America

World

YEAR

PO

UL

AT

ION

Despite problems, Africa is growing fastest



Population Growth Rates – Focus on Asia



The Rapidly Changing Landscape

Companies brace for end of cheap made-in-China eraBy ELAINE KURTENBACH, AP Business Writer Elaine Kurtenbach, Ap Business Writer –

Thu Jul 8, 12:57 pm ET

SHANGHAI – Factory workers demanding better wages and working conditions are hastening the eventual end of an era of cheap costs that helped make southern coastal China the world's factory floor. A series of strikes over the past two months have been a rude wakeup call for the many foreign companies that depend on China's low costs to compete overseas, from makers of Christmas trees to manufacturers of gadgets like the iPad. Where once low-tech factories and scant wages were welcomed in a China eager to escape isolation and poverty, workers are now demanding a bigger share of the profits. The government, meanwhile, is pushing foreign companies to make investments in areas it believes will create greater wealth for China, like high technology. shifting production to the inland areas …Massive investments in roads, railways and other infrastructure are reducing the isolation of the inland cities.

Maybe, but the growing market is still there!

http://www.engineeringchallenges.org/



US Industry Activity – Percent of GDP*

1947

1951

1955

1959

1963

1967

1971

1975

1979

1983

1987

1991

1995

1999

2003

2007

0

0.05

0.1

0.15

0.2

0.25

0.3

Agriculture

Manufacturing

Retail trade

Logistics

Information

Finance, insurance

Health care

* US Dept of Commerce, Bureau of Economic Analysis

Where will these lines go from here?



US Manufacturing Future

• Focus on design (shorter product life cycles, more customized

demands as choices proliferate)

• Focus on green manufacturing (sustainability)

• Focus on low volume, high precision, high tech products

• Focus on developing and using nanomaterial processes –

atomic scale layered composites

• Focus on renewable energy power sources

• Focus on defense industry

• High volume only when automated (low volume and product

flexibility relative to labor at least for awhile longer)



World wide Opportunities –Successful Approaches (Business 101)

• Identify competitive advantage (low cost of labor, primary materials)

• Identify market needs and means

• Ensure adequate infrastructure

• Find investors – gov’t, banks, parent companies

• Focus on a core

automotive parts assembly in Mexico first,

then build up to aerospace parts

• Low Cost Assembly originally in Asia (Is Africa the future?)

• Global Production Global Wealth Logistics Dominance



Where Do Manufacturers Build?

• Close to Raw Material and Parts Suppliers

• Close to Customers

• Adequate Labor Supply and Low Labor Rate

• Adequate Transportation Network (Air, Rail, Shipping, Roads)

• Favorable Community/Tax Situation

• Access to Utilities (power, water)

• Possible risk mitigation driven facility distribution

• Limited cultural/political hurdles



US National Academy of Engineering Grand Challenges

n Web page: http://www.engineeringchallenges.org/n View video (6 min)

Make solar energy economical – less than 1% today but large potential Provide energy from fusion – develop scalable, envir. benign method Provide access to clean water – affordable and available for all Reverse engineer the brain – combining engineering and neuroscience Advance personalized learning – speeds, styles, content for individual

Develop carbon sequestration methods – capture and store excess CO2

Restore and improve urban infrastructure – better design and materials for transportation, water, waste, power, etc. for livable cities

14 Grand Challenges for the 21st Century

http://www.engineeringchallenges.org/



NAE Grand Challenges cont.

Engineer the tools of scientific discovery – blending of engr. & science to explain nature

Advance health informatics – better everyday care and preventing bio attacks/pandemics

Prevent nuclear terror – protect society from increasing risks and proliferation Engineer better medicines – body sensing, personalized drugs, delivery

methods Enhance virtual reality – for training, treatment, communication, and

entertainment Manage the nitrogen cycle – better fertilization techniques and

recapture/recycle Secure cyberspace – protect essential infrastructure



IIE Fellows: Grand Challenges for Industrial Engineering

Reengineering Health Care Delivery Creating a Technology Oriented Culture Engineering a Sustainable Society Developing Better Decision Tools Mitigating and Responding to Disasters Point of Use Manufacturing Infrastructure Food Security

Fellows Report: http://www.iienet2.org/uploadedfiles/IIE/News/Grand%20Challenge%201.pdf



1. Reengineering Healthcare Delivery: An Integrated Approach

Demographics: Young and poor are fastest growing segment, U.S. and worldwide

Number of senior citizens growing fast (and baby boomers won’t go gently into the night)

Healthcare is largest U.S. industry Health care inflation rate 3 times overall rate Woeful under investment in info technology Excessive waste Medical info and treatment increasingly technology-

enabled

The Problem



1. Reengineering Health Care

Individual care needed – risk analysis, modeling/mining genomic info, personalized treatment scripts, safety/quality in individual led treatment

System improvements needed – QC, logistics, info technology, provider collaboration hierarchically and vertically, financial system and models

Science advances needed – treatment protocols, data mining/bioimaging, human sensing

The IE Role



2. Creating a Technology Oriented Society

Body of tech knowledge growing rapidly System size and complexity growing rapidly (U.S.) relatively wealthy – life is easy Many of brightest youth pursue pursue law, business U.S. youths perform poorly in math/science

The Problem



2. Creating a Technology Oriented Society

Get the word out about opportunities and need

Optimize available human resource

Jazz up what we do

The IE Role



3. Engineering a Sustainable Society

U.S. population will double this century World population will more than double Over 50% now live in urban areas Wealth increases ecological footprint Climate change will change geographic resource availability

What’s Your Carbon Footprint?

The Problem



3. Sustainable Society

Need sustainable transportation systems Efficient/effective governmental services – judicial,

social security, police/fire Designing scalable urban environments Designing efficient community structures connecting

urban (production, consumption) to rural (raw materials)

The IE Role

Can you live a healthy happy virtual life at home?

Is there an optimal city size?

How to tradeoff privacy and security?



4. Develop Better Decision Making Tools

The Problem

Modeled entities are growing in size Models are expensive to build, hard to sell Models are limited in scope, life-span Organizations have vertical and horizontal

boundaries (multiple constituencies)



4. Better Decision Making Tools

Better, more fully deployed, and relevant sensors Models to fuse, validate and evaluate data/information Improved models of human behavior Enrich “Rational” models with subjective behavior Risk analysis and interaction models of tightly coupled massive

technology-oriented systems and their failure modes/scenarios Rapid modeling and computational tools Scalable, maintainable, rapidly developable models More understandable models/More valid models Human embedded modeling paradigms and tools (immersion

and visualization)

The IE Role



5. Mitigating and Responding to Disaster

Natural and man-made disasters are happening more frequently

Societal expectation is for safer lives, quicker emergency care

Larger urban regions, tightly-coupled specialized lives, and climate change lead to more susceptible systems and larger scale impacts

The Problem



5. Mitigating Disaster

Optimal deployment of detection technologies (natural and competitive games)

Optimization of emergency response resource positioning and deployment

Managing transition from search to rescue to recovery and care

Integrated communications, logistics, and decision making

Real-time decision making with various info levels (resilient planning and control)

Resilient system(s) design Optimal deployment and use of sensing technology and

risk assessment models

The IE Role



6. Point of Use Manufacturing

Demand for Customized Products

Demand for Sustainable Manufacturing/Distribution

The Problem



6. Point of Use Manufacturing

Distributed (home) or neighborhood manufacturing New process development for solid free form fabrication Development of nano and mega technology for point of

use production Design of infrastructure for material delivery, user-driven

design

“It’s Not Easy Being Green”

The IE Role



7. Infrastructure Construction

Time to revolutionize infrastructure construction (progress has lagged)

Construction inefficient and quality variable

The Problem



7. Infrastructure Construction

Take advantage of advances in computing, robotics, materials, and management science to reduce cost, time, injuries, environmental impact

Design smarter structures

Determine optimal investments for infrastructure $

Allow maintainable, culturally appropriate, ergonomically safe construction methods and system designs

Why Can’t we manufacture structures in factories for field assembly with higher quality and productivity?

The IE Role



8. Safe, Available, Affordable Food & Water

Population growth, changing weather patterns, political strife, man-made biohazards, natural biohazards threaten worldwide

Current cultivation practices not sustainable and use non-renewable resources

Profits vs. Politics vs. Social Good Standard procedures, testing and traceability needed across food

supply chain Procedures for local food production and security needed

The Problem



8. Safe, Available Food and Water

Develop traceable supply and distribution networks (RFID, imaging, procedures, etc.)

Design and deploy maintainable solutions Perhaps assist in governmental planning for development

The IE Role



What Constitutes IE?

Manufacturing planning (process planning, tooling design/maintenance)

Production operations (planning, scheduling, quality assurance, material handling)

Engineering management (engineering economics, product services, facilities design/mgmt., distribution/logistics)

System modeling (information systems/flow, modeling and simulation)

Ergonomics/Human Factors

IE Today IE Tomorrow

• Additions? • Deletions?



Industrial Engineer 21st Century

We are the Information

Preparer

We are the Data Hunter/Gatherer



Conclusions

We are needed but we must Wander or Wither

We must Revolutionize on a Bigger, Broader, Faster Scale

We must integrate our strengths – humans, math models, computing, big picture/multiobjective comfort level, efficiency mindset



The Big Picture

But We Must Broaden our Workspace!

Opportunities Abound!



Questions/Comments/Complaints?

Ron Askin

School of Computing, Informatics, and

Decision Systems Engineering

[email protected]



Futurizing the BSIE Curriculum

Greater emphasis on global cultures Learning to serve on multidisciplinary, multicultural, politically

pressured teams Must bring unique value to the team (Systems thinking, Project

Management, Multiobjective Dec. Making, Dealing with Complexity & Uncertainty)

Dynamic, Nonlinear, Continuous Large-Scale Modeling (Not just Discrete Event Simulation and Desk Top LP)

Understanding Human Behavior and Preferences (Beyond HF) Risk Management and Mitigation as an integral activity Broader Science Knowledge (Biology, Ecology) Sophisticated Information Technology Users (Sensor Capability &

Network Design; Data Information Decision Systems) Systems Modeling of Urban Environments, Infrastructure Broader Mindset of Major Societal Impact and Socio-Technical

Problem Solving (not just making widgets)

What’s Your Ten?

Documents

Ira A. FULTON Schools of Engineering Global Challenges in Industrial Engineering and Operations Management for the 21 st Century Ronald G. Askin, Professor