Socially Constructing Warships—

Emergence, growth & senescence of a knowledge-intensive complex adaptive

systemWilliam P. Hall

PresidentKororoit Institute Proponents and Supporters Assoc., Inc. - http://kororoit.orgDocumentation & Knowledge Management Systems Analyst (Ret.) Tenix Defence

william-hall@bigpond.comhttp://www.orgs-evolution-knowledge.net

Access my research papers from Google Citations

Melbourne Emergence

Tenix Defence’s $7 BN ANZAC Ship Project was the most successful Defence Project in

Australian History

2

Late 1989-2007 built & delivered 10 modern frigates– 8 to the Royal Australian Navy– 2 to the Royal New Zealand Navy– Different customers, different languages, different

systems– Plethora of engineering changes affecting everything– Stringently fixed price contract & delivery

schedule– Required to achieve 80% Australia/New Zealand

content– Fixed acceptance dates, major penalty/warranty

clauses How is ANZAC’s success measured?

– Every ship on time– No cost overruns– Healthy company profit ! A success by any

standard!– Happy customers

Tenix auctioned its Defence assets in 2007 because it could not complete a $500 M project for New Zealand– Failing to learn from Australia’s most successful defence project

ANZAC Frigates designed for modular construction

Modules can be builtanywhere appropriate standards and transportarrangementsexist

Modules are much easier & faster to fit out with kit and components when being fabricated or open

3

Complex processing fabrication & assembly forming completely operational ship from steel plate on 36 acre

(14.5 ha) site

INTEGRATION STEPS1. Steel plate stockyard2. Blast & prime plate3. NC plate cutting4. Fabricate panels5. Assemble units & blocks6. Blast/paint units &

blocks7. Assemble modules &

pre-outfit them8. Erect modules on

slipway8a. Receive off-site

modules9. Outfit & set to work10.Underwater & set to

work—a. Warehouse (components

& material receive & store)

b. Bar fabricationc. Machine shopd. Pipe shope. Kitting

4

a

b

b

c

d

e

Engineering

Admin

Staffparking

Receiving modules, erecting hull

5

Modules built in NZfor NZ ships

Erecting modules & launching ship

6

Note open structure to facilitate installation of 2 cruise diesels, LM 2500 gas turbine and main gear box

Note transporter under module to left

Click main picture for video

Launching!

7

Emergence & senescence of an

ANZAC ship

CONCEPT STUDIES

SYSTEM REQUIREMENTSHIGH LEVEL SPECIFICATIONS

RETIREMENT & PHASEOUT

DEPLOYMENT AND SUPPORT

CONSTRUCTION / PRODUCTION

SYSTEM TEST AND EVALUATION

DESIGN VALIDATION

SYNTHESIS, ANALYSIS,TRADE-OFF STUDIES AND

DESIGN OPTIMISATION

FUNCTIONAL ANALYSISAND

REQUIREMENTS ALLOCATIONLOWER LEVEL SPECS í

SYSTEMS &ENG DESIGN

í

In ServiceSupport(ISS)

í PRELIM DESIGN STUDIES í RFT AND BIDS

í

Mfg Resource Planing (MRP) MAINTENANCE MANAGEMENT

íLifecycle of a major engineering project

The product emergesfrom a complex web of millions of decisions

Points of decision:

Kauffman's (2000) "adjacent possible“Ellis & Rothman's (2010) “crystallizing block universe”

Time progresses from left to right

Grey area is the unchangeable block past (if it exists)

Dashed lines represent undetermined possible futures a particle can reach from present instant (“adjacent possibles”)

Ellis & Rothmann suppose that present instant is ‘fuzzy’ with quantum uncertainty until local area collapses or crystallizes into a determined path

Hall, W.P. 2011. Physical basis for the emergence of autopoiesis, cognition and knowledge

10

How does a ship come to be? Consider the temporal trajectory of an iron atom through the life of an ANZAC

Ship

Iron atom produced by nuclear fusion in core of star

Ejected by supernova as cosmic dust

Captured in formation of planet Earth

Precipitated as concentrated ore by geological processes

Controlled application of energy as work () to mine and refine ore

Smelt and forge iron into steel plate by via complex machinery

Transport plate from foundry to steel yard in Williamstown

Blast and prime plate following production design & schedule ()

cut plate into flat “parts” Shape, fit & weld parts into 3D

“panel” in parallel (‖) with many other parts

‖ Weld panels into “unit” [ Blast & paint unit ]‖ Weld units into “module” [ ‖ fit & install other components

and equipment into module]‖ Erect and weld module with

other modules into ship structure [ Complete ship fit out, set to

work] [ Deliver doco packages & train

crew] [ Sea trials & commission ship

into service ] [ In operational service] Maintain, change & refit Entropic senescence, decommissionScrapping & recycling

11

Consider the assembly of a bid to build ships(hydrographic vessels?)

OVERSIMPLIFIED!1. Read RFT / individual line items2. Collect source data/docs3. Decide response for each line

item4. Assemble required DIDs5. Author paragraphs responding

to each requirement6. Review/rewrite many times7. Assemble into documents8. Review/rewrite many times9. Assemble documents into

system-level Annexes10.Preliminary design & costing11.Print files and assemble review

volumes12.Management review & edit13.Final cross check against RFT

and proofing14.Assemble & deliver formal bid

12

Theoretical Framework

Mostly from Hall, W.P. 2011. Physical basis for the emergence of autopoiesis

, cognition and knowledge. Kororoit Institute Working Papers No. 2: 1-63

Evolutionary epistemology Karl Popper’s “general theory of

evolution”– Tentative solutions (trials)– Elimination of errors– What’s left worked at least once– Evolving time-line includes

solutions to what worked in past Accounts for evolution of

anticipatory systems Inseparability of

knowledge & life John Boyd’s OODA

– Includes choice,decision, andwilful action

14

AO

OBSERVE(Results of Test)

OBSERVATIONPARADIGMEXTERNAL

I NFORMATION

CHANGI NG CIRCUMSTANCES

UNFOLDING ENVIRONMENTAL

RESULTS OF ACTI ONS

ORI ENT

D

DECIDE(Hypothesis)

O

CULTURE PARADIGMS PROCESSES

DNA GENETIC

HERITAGE

MEMORY OF HISTORY

INPUT ANALYSIS SYNTHESIS

ACT(Test)

GUIDANCE AND CONTROLPARADI GM

UNFOLDI NG I NTERACTION WI TH EXTERNAL ENVIRONMENT

Non-equilibrium thermodyanmics drives emergence of knowledge-based living systems

15

Eddies in the flux become stabilized & self-sustaining via selected & inherited structural configuration

Slide 16

.. . .

.. ....

. . .

.. ....

Emergent autopoietic vortexes forming world 2 and world 3 in a flux of exergy to entropy

.....

. . .

.. ....

.. . .

.. ....

Flux along the focal level

Exergysource

Entropysink

Symbolic knowledge

Embodied knowledge

Autonomy

Autocatalytic metabolism

Material

cycles

17

Varela et al. (1974) define life as autopoiesisReliable knowledge makes systems living

Six criteria are necessary and sufficient for autopoiesis– Bounded

System components self-identifiably demarcated from environment– Complex

Separate and functionally different subsystems exist within boundary

– Mechanistic System dynamics driven by self-sustainably regulated flows of

energy from high to low potential driving dissipative “metabolic” processes

– Self-defining System structure and demarcation intrinsically produced Control information/survival knowledge embodied in instantaneous

structure– Self-producing (= “auto” + “poiesis”)

System intrinsically produces own components– Autonomous

self-produced components are necessary and sufficient to produce the system.

Autopoiesis is a good definition for life

Autopoiesis (Maturana & Varela 1980; see also Wikipedia)– Reflexively self-regulating, self-sustaining, self-(re)producing dynamic entity– Continuation of autopoiesis depends on the dynamic structure of the state in

the previous instant producing an autopoietic structure in the next instant through iterated cycles ()

– Selective survival builds knowledge into the system one problem solution at a time (Popper 1972, 1994)

By surviving a perturbation, the living entity has solved a problem of life

Structural knowledge demonstratedby self-producing cellular automata emerging in toy universes

18

What makes a system living?

Constraints and boundaries, regulations determine what is physically allowable

Energy (exergy)

Component recruitment

Materials

Observa

tions

Entropy/Waste

Products

Departures

Actions

ProcessesProcesses

"universal" laws governing component interactions determine physical capabilities

The entity's imperatives and goals

The entity's history and present circumstances

HI GHER LEVEL SYSTEM / ENVI RONMENT

SUBSYSTEMS / COMPONENTS

Constraints and boundaries, regulations determine what is physically allowable

Energy (exergy)

Component recruitment

Materials

Observa

tions

Entropy/Waste

Products

Departures

Actions

ProcessesProcesses

"universal" laws governing component interactions determine physical capabilities

The entity's imperatives and goals

The entity's history and present circumstances

HI GHER LEVEL SYSTEM / ENVI RONMENT

SUBSYSTEMS / COMPONENTS

Gliders – cycle in 4 steps

Gosper’s Glider Gun cycles in 14 steps

Rule: Live cell with 2 or 3 live neighbours livesDead cell with 3 live neighbours livesAll other live cells die

Autopoiesis may develop at several levels of hierarchical organization

19

Economic organizations may be autopoietic

20

Slide 21

Information transformations in the living entity through time

World 1

Living systemCell

Multicellular organismSocial organisation

State

Perturbations

Observations(data)

Classification

Meaning

An "attractor basin"

Related information

Memory of historySemantic processing to form knowledge

Anticipate, predict, proposeIntelligence

World 2

Hall, W.P., Else, S., Martin, C., Philp, W. 2011. Time-based frameworks for valuing knowledge: maintaining strategic knowledge. Kororoit Institute Working Papers No. 1: 1-28.(OASIS Seminar Presentation, Department of Information Systems, University of Melbourne, 27 July 2007)

Slide 22

Processing Paradigm(may include W3)

Another view

Decide!

Medium/Environment

Autopoietic systemWorld State 1

Perturbation Transduction

Observation MemoryClassification

Evaluation

Synthesis

AssembleResponse

Execute internal changes

Effect action

Effect

Time

World State 2

IterateObserved internal changes

World 1 World 2

Codified knowledge

World 3

Emergent complexity―

The ANZAC Ship, its crew and its engineering support infrastructure form a

knowledge-based, complex adaptive system

(ref slide 4 & slide 11)

Architectural overview for an integrated prime contractor-operator KM system for fleet

lifecycle

24

Covers engineering drawings,tech data & documentation,production planning & history,maintenance history, etc.

Tenix’s systemsfor ANZAC Frigatges

Tenix constructed a knowledge feedback loop for

maintenance knowledge

1. Engineers anticipate usage and maintenance requirements based on supplied doco, info & experience

2. Tech authors draft operational and maintenance doco

3. Tech data & doco loaded into ships’ AMPS

4. AMPS issues sched. maintenance instructions to maintainers

5. Completion reports entered into AMPS

6. AMPS issues maintenance and operational history data to CSARS

7. Support engineers identify problems & recommend engineering & doco changes to correct

8. Engineering / doco changes made & fed back into operational capabilities and maintenance requirements

25

Emergence and disintegration of the

shipbuilder as an autopoietic entity

Three generations ofSydney-based family companies as “owners”

Transfield Holdings 1988-1995 (private partnership)– Founded 1956 Franco Belgiorno-Nettis & Carlo Saltieri– Engineering projects (infrastructure & plant maintenance)

1988 Transfield Defence Systems founded to bid on ANZAC 1989 Sons, Paul Salteri & Franco Belgiorno-Zegna, MDs 1996 Gen 2 family differences split company – Defence

assets to Salteri; remainder plus Transfield name to Belgiorno-Nettis

1996-2001 Paul Salteri expanded beyond Marine– Tenix Defence: + aerospace, + land, + electronic systems – + civil infrastructure, + civil aviation, + computer

systems development, + local government data mgmt 2001 Robert Salteri (3rd generation) appointed as CEO

– 2007 auctioned “some or all” Tenix assets, finalized sale of all Defence assets to BAe Systems early 2008

– 2014 last infrastructure maintenance assets sold to Downer EDI27

A knowledge-based social network beginning to form an organization

28

"Faces" correspond to people/actors in the environment. a. A "human attractor" seeking knowledge to address an organizational imperative or need. b. Other seekers socially transferring knowledge relating to what the "human attractor" seeks to know

for the benefit of the emerging organization. c. Other actors not connected to the seeker's current interest. d. A knowledge transfer between individual actors. Line weights indicate strength of the connection. The open vertical arrows indicate the possibility that the community may assemble and generate knowledge that will be valuable in addressing organizational needs

Nousala, S., Hall, W.P. 2008 Emerging autopoietic communities – scalability of knowledge transfer in complex systems. First IFIP International Workshop on Distributed Knowledge Management (DKM 2008), Oct, 18-19, 2008, Shanghai.

Coalescence of a community of interest (CoI) around a "human attractor"

29

The human attractor seeks knowledge to solve organizational needs addressing high level imperatives and goals. Smiley faces represent people/actors receiving organizational/social rewards for helping to address the need. Such rewards reinforce the individuals' involvement. Open vertical arrows indicate the value/importance of the assembled, ordered and directed knowledge in addressing higher level organizational requirements. The light dotted line surrounding the attractor’s network indicates that participants and others begin to see the network as a specialized community addressing particular needs.

Stabilization around a human attractor and emergence of processes within the stabilized

community

30

Dashed arrows represent control processes. Solid arrows represent knowledge production processes. Knowledge about how to form and sustain the organization is still emerging. a. Organizational facilitator. b. Emerging boundary surrounding the organization by those who identify themselves as participants

in the organization and others in the community. c. Faces crossing the boundary are people in the process of being recruited and inducted into the

community.

Achievement of dispositional autopoiesis, where self-supporting practices have emerged

31

a. grey faces - monitoring processes providing feedback control to maintain and sustain the community. b. white faces – involved in production processes delivering a product to the broader organizational

environment. c. product quality control cycle provides corrective feedback to the production process. d. induction process recruiting new individuals into the community to satisfy new needs and to replace

attrition. e. environmental monitoring to feed observations into monitoring and control process. Note, this evolutionary stage still depends on tacit routines and tacit knowledge/acceptance by individual participants of their learned roles in the routines.

Semiotic autopoiesis – objectified and documented practices to form and maintain the organization

32

Grey faces – those following codified knowledge (a.) about how to manage internal and external monitoring processes providing overall feedback control. White faces – those following codified knowledge (b.) about the production process. Black faces – those following codified knowledge (c.) about the product quality control cycle. d. codified knowledge about induction process recruiting new individuals into the community to satisfy new needs and to replace attrition. e. codified knowledge about environmental monitoring processes. f. codified knowledge about how to establish and sustain the community itself.

Marine born in 1988 as an innovative new organization

soon acquired by the family company

Eglo Engineering with Dr John White lobbied to start Submarine project & joined a failed bid to win the Collins Class contract

In 1986-7 Eglo formed AMEC as a publicly owned consortium with ICAL, & (W) Australian Shipbuilding Industries to bid on pending ANZAC Ship project– Late 87 AMEC won bid to privatize dysfunctional Williamstown

Naval Dockyard in competition with private Transfield Defence Systems

1988 Transfield acquired all AMEC stock and renamed company to AMECON in early 88, retaining some staff from Eglo & Ical

Under Dr John White AMECON closed Dockyard– Terminated all existing Dockyard labor & management

staff– Established & assembled new dockyard staff

With ACTU agreement, replaced 23 unions, 30 awards & 390 classifications with 3 unions and 1 award and 2 classifications

Rehired selected dockyard people of “good reputation” and many years of living knowledge

Recruited / contracted engineering talent needed to bid/design ANZACs (other industry, Navy, overseas)

33

Defence systems started with the “Marine Division”

High turnover (generally < 3 yrs) in Williamstown senior mgmt– Hired to manage specific project phases– No tolerance for “mistakes”– No opportunity to learn corporate history or “on the job”– Once the work was mobilized, senior management contributed

little to effective workings of the ANZAC Ship Project (“ASP”) [Marine used as cash cow to support acquisitions] Engineering, technical and production staff were “body” &

“mind”– Plenty of 10 & 15 year pins (e.g., select staff rehired from WND)– Proud/excited to be designing, building & supporting Australian

ships– Major family turnouts to watch their ships being launched– Worked and often socialized as teams– Actively worked to understand what the Contract required– Made mistakes, identified problems and solved them– Worked very long hours to ensure project success

Large component of self- and emergent-management

34

Unique aspects of the ANZAC Ship Project Contract helped to determine how the

organization worked

Client project authority was bi-national (nationally variant ships)

Contract specified capabilities to be delivered not specific products/systems

80% Australia /New Zealand Industry Participation by value Foreign (German) design to be engineered & built in

Australia Fixed price contract (1989 $ with escalation) / fixed schedule

– Ships & systems– Shore based simulators, & complete ship crew training package– Maintenance knowledge and logistic support costs

Complete technical data / operational and maintenance documentation deliverables

Initial consumables + supply chain/rotable pool/insurance spares

Warranty requirement to prove over 10 ship-years that ships were operationally available (AO) at least 80% of time– Major test of design, engineering, training, maintenance

knowledge– Tenix required to develop acceptable methodology to prove this

Major liquidated damages for schedule milestone breaches

35

Problem areas requiring research, development & deployment of specialist

knowledge

Solved major problems & issues largely unique to defence proj.– Engineering subcontracts fully reflect prime contract obligations– Acquisition of required IP from system subcontractors to build,

document & maintain ships– Modular construction with dimensional control

methods/technologies– Welding technologies & training– Contract amendment & subcontract management– Cost & schedule control & reporting– Inventory mgm’t & tracking (Project Authority takes ownership

of most stuff when delivered on site)– Configuration management for tracking engineering

change control– “Issue 4” Safety critical documentation authoring &

management must track eng. changes throughout ship lifecycles

– Both human maintainers and computerized maintenance management systems must understand safety-critical tech data/documentation

Problems identified and managed locally– Internal solutions and innovation / Locally managed R&D

36

Senescence and demise

Executives never seemed to understand organizational imperatives for their own

company

What are “organizational imperatives”? (my usage differs)Things the organization must do successfully in order to continue its existence and flourish in its real world physical, environmental, and economic circumstances.

– Imperatives depend on the nature of the organization and its environment

– Imperatives exist independently of executive beliefs, strategies, goals and mission statements – physics always trumps belief

– Organizations failing to satisfy their imperatives in one way or another will not thrive and may fail

Imperatives for an engineering project manager (e.g., Tenix)– Qualify and win suitable contracts (find customers)– Successfully complete contracts won (satisfy customers)– Anticipate perturbations to ensure overall operational profitability– Maintain workforce able to anticipate and address imperatives– Comply with health, safety and environmental standards– Comply with governmental regulations– Satisfy all of the above imperatives

Don’t divert effort/resources to activities that don’t address imperatives

38

First imperative:Tenix Defence never learned to reliably win

contracts Never understood the power/dangers of electronic

documents– Put MS Word in hands of contract engineers and typists who

used complex wordprocessor like a typewriter– Multiple authors worked on same electronic files w/o config

control Internal R&D project proposed to replace MS Word authoring

environment with authoring & configuration management environment used in-house for ANZAC documentation– Would have reduced bid cost/hours by more than 50% allowing

resources to be applied to more/better crafted bids– Support engineering (but not IS) had expertise to implement it– Payoff time a year or less or immediately an “extra” bid is won

Executives / F&A did not believe or understand concepts Only 3 bids won (including Protector) in 17 years after

ANZAC Should have won Air Warfare Destroyer bid

– Tenix lost to ASC on a “value for money” basis– Scuttlebutt said that F&A had costed work not required

in RFT

39

Problems inherent(?) in the family business led to its demise in the third generation

All major ANZAC problems solved by 2001 acceptance of Ship 5

Strict command and control hierarchy was instituted under closeout GM to squeeze last cent out of “serial production”– Most engineers “outsourced” to labor hire companies,

hived off to other divisions, or made redundant asap.– Removed critical knowledge from company– Destroyed self-organized autonomy

Construction industry bean-counting mentality– Executives were used to hiring/contracting standardized

management & trade skills on a project by project basis– Management bonuses based on retrospective “Tenix Added

Value” Rewarded for past successes, not for anticipating the future

– Staff not allowed to do anything not booked directly to a cost code against a particular contract work item

Every half hour had to be accounted for in time management system

– Little thought or understanding of the value of unique personal knowledge, org. continuity & meeting organizational imperatives

40

Serial production & closeout of ANZACs Transfer of living knowledge blocked by isolating ASP

serial production from other activities– ASP behind security fence with swipe card access only– Non ASP staff required GM signature to visit ASP staff– Chatting around water cooler & coffee breaks seen as time

wasting Costly engineers/senior staff outsourced or given

redundancy IS decided to replace the working engineering KM

syst– Navy selected TeamCenter as their PDM system for ships in

service Land’s MatrixOne solution was offered Suspect selection – key Navy selectors became TeamCenter

employees– ASP chose TeamCenter because Navy was going to use it rather

than Matrixone CMIS system that was fully operational in Adelaide

– ASP and IS spent millions trying to implement TeamCenter as shipbuilder system for ANZAC Ships

Could not manage complexity of ASP Still wasn’t fully working when Tenix Defence taken over by BAe

Systems

41

The dead hand of absentee owners and Finance and Administration mentality killed

the company

Owners & senior execs worked from Tenix Tower in Sydney– Isolated from all operating divisions (closest was Pukapunyal)– Minimal provision for interstate travel between divisions & HO

Centralized command & control hierarchy– North Sydney was a “black hole”: information in – nothing out– Long chain of command with poor formal delegation of

decisions– Prior to 2001 many important decisions towards successful

solutions were made locally in default of / or even despite central authority.

Execs did not understand how to manage or value knowledge– Ignored findings of contracted KM audit, several consultants &

CIO– Did not understand value of tacit or explicit knowledge

Finance & Administration mentality– Knew cost of everything, value of nothing– Sr mgmt bonuses based on retrospective “Tenix Added

Value”– Information Systems a department under F&A

IS had little understanding/consideration of end-user requirements

F&A would pay millions for hardware & software but little for analysis & training

42

Tenix unable to successfully complete

$500 M Protector

Tenix Defense assets sold to BAE Systems 2007/8

Remaining Tenix Group sold to Downer EDI

2014