cochrane.org.ukca-global.org
COCHRANE a s s o c i a t e s
Peter Cochrane
The Curse of Optimization Future sustainability, technology, industry and society
Wednesday, 6 November 13
In a
connectedworld
of
f i n i t eresources
a stove-piped
V i e wis
dangerousWednesday, 6 November 13
Optimizing by € € € € aloneleads to brittleness andinstability often with severe ecologicaland socialdamage
Wednesday, 6 November 13
Today’s financial systems only produce one result
Countries, companies & economies
that look like thisare short lived
Wednesday, 6 November 13
In the long term this is fundamentally impossible... . . . y o u c an ’ t have it all at the same time!
Wednesday, 6 November 13
This is what business schools teach budding managers, butit is incomplete, andit is wrong!
Wednesday, 6 November 13
Brittleness
This is what business schools teach budding managers, butit is incomplete, andit is wrong!
Wednesday, 6 November 13
Brittleness
Cost of
OwnershipThis is what business schools
teach budding managers, butit is incomplete, andit is wrong!
Wednesday, 6 November 13
η
€ € €
Efficiency𝓷
Efficiency - far more sophisticated than ripping out cost or sweating assets
Wednesday, 6 November 13
η
Failure free operating cost with efficiency f1(𝓷)
€ € €
Efficiency𝓷
Efficiency - far more sophisticated than ripping out cost or sweating assets
Wednesday, 6 November 13
η
Failure free operating cost with efficiency f1(𝓷)
Failure cost with efficiency f2(𝓷)
€ € €
Efficiency𝓷
Efficiency - far more sophisticated than ripping out cost or sweating assets
Wednesday, 6 November 13
η
Optimum cost efficiency is
at the point (𝓷) where:
Failure free operating cost with efficiency f1(𝓷)
Failure cost with efficiency f2(𝓷)
€ € €
Efficiency𝓷
Efficiency - far more sophisticated than ripping out cost or sweating assets
Wednesday, 6 November 13
η
Optimum cost efficiency is
at the point (𝓷) where:
Failure free operating cost with efficiency f1(𝓷)
Failure cost with efficiency f2(𝓷)
€ € €
Efficiency𝓷
f1’(𝓷) + f2’(𝓷) = 0
Efficiency - far more sophisticated than ripping out cost or sweating assets
Wednesday, 6 November 13
η
Optimum cost efficiency is
at the point (𝓷) where:
Failure free operating cost with efficiency f1(𝓷)
Failure cost with efficiency f2(𝓷)
€ € €
Efficiency𝓷
f1’(𝓷) + f2’(𝓷) = 0
For the specific exponential case:
Efficiency - far more sophisticated than ripping out cost or sweating assets
Wednesday, 6 November 13
η
Optimum cost efficiency is
at the point (𝓷) where:
Failure free operating cost with efficiency f1(𝓷)
Failure cost with efficiency f2(𝓷)
€ € €
Efficiency𝓷
f1’(𝓷) + f2’(𝓷) = 0
For the specific exponential case:
C = Aexp(-a.𝓷) + Bexp(b.𝓷)
Efficiency - far more sophisticated than ripping out cost or sweating assets
Wednesday, 6 November 13
η
Optimum cost efficiency is
at the point (𝓷) where:
Failure free operating cost with efficiency f1(𝓷)
Failure cost with efficiency f2(𝓷)
€ € €
Efficiency𝓷
f1’(𝓷) + f2’(𝓷) = 0
For the specific exponential case:
C = Aexp(-a.𝓷) + Bexp(b.𝓷)
The optimum operating efficiency is found to be:
Efficiency - far more sophisticated than ripping out cost or sweating assets
Wednesday, 6 November 13
η
Optimum cost efficiency is
at the point (𝓷) where:
Failure free operating cost with efficiency f1(𝓷)
Failure cost with efficiency f2(𝓷)
€ € €
Efficiency𝓷
f1’(𝓷) + f2’(𝓷) = 0
For the specific exponential case:
C = Aexp(-a.𝓷) + Bexp(b.𝓷)
𝓷o = b - a__1 loge Aa
Bb_
The optimum operating efficiency is found to be:
Efficiency - far more sophisticated than ripping out cost or sweating assets
Wednesday, 6 November 13
The worst
case
Wednesday, 6 November 13
The worst
case
Only humans optimize...
Mother Nature goes for good enough....
...and in doing so achieves sustainablerelationships....a symbiosis....
Wednesday, 6 November 13
€ € € €
Society
Ecology
The minimumdecision set
Wednesday, 6 November 13
€ € € €
Society
Ecology
The minimumdecision set
tec
hn
olo
gy
Wednesday, 6 November 13
Even more fundamental to all this is the advance and adoption of new technologythat is unpredicted/not fully understood
Wednesday, 6 November 13
old processes and industries
Susta
inabil
ity is
impo
ssible
by op
timizi
ng
Wednesday, 6 November 13
The Future
Wednesday, 6 November 13
The Future PrintingInstructing
NetworkingCollaboratingProgrammingRepurposing
RecyclingReusing
Bio Nano
AI, ALITC
Wednesday, 6 November 13
Wednesday, 6 November 13
Machines are the biggest communicators
on the Planet
They dominate manufacture and production and are moving into design and general knowledge,
modeling and decision support
Wednesday, 6 November 13
even more than we do !
They need The Cloud
Wednesday, 6 November 13
The Internet cannot scale to 9Bn people
and over 50Bn machines on
line, but Clouds
can
Wednesday, 6 November 13
We are increasingly defeated by complexity,
but our machines are not !
Wednesday, 6 November 13
We are increasingly defeated by complexity,
but our machines are notNow outgunning humans on general and specific knowledge
Wednesday, 6 November 13
Ha l f L i f e o f Knowledge
Physics~13 yrs
Medical~ 4 yrs
Economics~ 9 yrs
Software~ 4 yrs
Marine Bio~ 2 yrs
Wednesday, 6 November 13
ITC is vital to our symbiosis
Material Technology the biggest game changer for industry and sustainability
Wednesday, 6 November 13
Thank You
ca-global.orgcochrane.org.uk
COCHRANE a s s o c i a t e s
Wednesday, 6 November 13