>

http

://

>Watch for the red dot indicating expanded stories online

sdm.mit.edu/pulse continued on page 14

in this issue

1 Energy Supply Alternatives for European Southern Observatory

2 Publisher’s Welcome

2014 MIT SDM Conference Preview: Leadership and Systems Thinking

3 SDM Student Leadership Award

4 Determining Causes of Quality Loss in Complex System Design

7 SDM Class: January 2014

8 MIT Natural Resources Workshop

10 A Systems Approach to Education Reform

13 Fall Tech Trek Report Spring Tech Trek Preview

16 Calendar

on the web

SDM ’14 Student Profiles

> George Clernon

> Christopher Choo

> Sagini Ramesh

> Jillian Wisniewski

SDM ’14 Student Blog

> Jim Barkley, jimit.net

Artist’s rendering of European Extremely Large Telescope. © ESO/L. Calçada

SDM Alums Use Systems Thinking to Help Power Chilean Observatory

The challenge: With crystal clear skies and dry air, the European Southern Observatory (ESO) is located in one of the best 1,000 square kilometers for astronomic observation on the planet. In the next 10 years, the ESO plans to expand its facilities by constructing the European Extremely Large Telescope (E-ELT) on a mountain in Chile known as Cerro Armazones (see image at right). The E-ELT will be 22 kilometers from the existing Paranal Observatory. The addition of the E-ELT will triple the electricity consumption in an area that is currently isolated from the grid.

The planned construction of the E-ELT and the challenges faced by the current energy system encouraged ESO to re-evaluate its energy supply strategy. Working with the Chilean Energy Ministry and ESO, inodú, a company founded by SDM alumni Donny Holaschutz and Jorge Moreno, developed solutions that could help the latter cope with planned increases in energy consumption, identify energy efficiency measures, and satisfy the need for electricity in a more reliable, cost-effective, and environmentally friendly manner. The project led by inodú is part of a long history of collaboration between the Chilean government and ESO, and it aligns with the goals of the Chilean Energy Strategy 2012–2030, which aims to scale up the deployment of renewable energy projects and energy efficiency measures.

The approach: To re-architect ESO’s energy system and identify sustainable energy-efficiency measures, inodú used an integrated set of methodologies grounded in systems thinking. The company began by investigating the facts and key stakeholders’ perceptions of how the energy system should create value for current and future observatory operations. The team visited the Paranal Observatory facilities to evaluate the existing energy system and to learn what is needed for a night of observations. Finally, inodú engaged local suppliers of batteries, solar panels, wind turbines, and various types of fossil fuel generators to explore what potential energy solutions are available in the market.

Jorge Moreno, SDM ’11, left, and Donny Holaschutz, SDM ’10, visit the Paranal Observatory.

pulsesdmvol. 9, no. 1 spring 2014

The newsletter of the Massachusetts Institute of TechnologySystem Design and Management program

2

First and foremost, please save the date—October 8, 2014—for the annual MIT SDM Conference on Systems Thinking for Contemporary Challenges. This year’s event will focus on the importance of leadership and systems thinking in all phases of one’s career—emerging, evolving, and established. Speakers will discuss how to apply this notion to a company’s life stages as well.

The conference will be preceded by a half-day, back-to-the-classroom session on the afternoon of October 7. MIT faculty will present their latest research in the practical application of systems thinking, whether to industry, nonprofits, and/or academia. For more details, as well as registration information, visit sdm.mit.edu/systemsthinkingconference/2014/. We invite you to join us.

Meanwhile, we hope you will explore this edition of the SDM Pulse to learn how systems thinking has been applied to:

• Energy efficiency. System architecture helped the Chilean Energy Ministry and the European Southern Observatory identify ways to cope with planned increases in energy consumption and improve energy efficiency.

• Automotive safety. SDM alumna Stephanie Goerges reports on her SDM Best Thesis Award–winning research, which employed system theoretic process analysis at Cummins to determine the causal factors that lead to accidents or loss.

• Education policy. SDM alumni describe their “aligned workforce model,” a web-based simulation of the economy that illustrates how to match firms’ changing needs with educational offerings and the evolving skill sets of the workforce.

In addition, this issue includes articles on SDM’s spring and fall tech treks, which illustrate how companies are engaging with the SDM program.

As always, we welcome your feedback and suggestions.

Sincerely,

Joan S. Rubin Industry CodirectorMIT System Design and Managementjsrubin@mit.edu

Welcome

sdmpulse spring 2014 sdm.mit.edu

Save the Date!

October 8

2014 MIT SDM Conference on Systems Thinking for Contemporary ChallengesSystems Thinking for Emerging, Evolving, and Established LeadersOctober 8, 2014, 8:30 a.m.–5 p.m.Wong Auditorium, MIT

SDM Information Evening October 8, 2014, 6–9 p.m.Bush Room, 10-150, MITDetails/registration: sdm.mit.edu

Related Events

October 7

Preconference Back-to-the-Classroom Session Latest Research in Systems Thinking and How to Apply ItOctober 7, 2014, 2–5 p.m.Wong Auditorium, MIT

Reception for SDM Alumni and StudentsOctober 7, 2014, 6–9 p.m.Catalyst Restaurant, 300 Technology Square, Cambridge, MADetails/registration: sdm.mit.edu

sdm

P r e v i e w

3

Wilfredo “Alex” Sanchez Honored for Leadership, Innovation, Systems Thinking

Wilfredo “Alex” Sanchez

Suzanne Livingston

Marianna Novellino

On March 10, 2014, the SDM community convened for the presentation of the Class of 2013 MIT SDM Student Award for Leadership, Innovation, and Systems Thinking. The award, created by the SDM staff in 2010, honors an SDM student who, during his/her first year of matriculation, demonstrates the highest level of:

• strategic, sustainable contributions to fellow SDM students and the broader SDM and MIT communities;

• superior skills in leadership, innovation, and systems thinking; and• effective collaboration with SDM staff, fellow students, and alumni.

All nominees and the winner are selected by the SDM staff.

This year’s winner, Wilfredo “Alex” Sanchez, received a cash prize. He was honored for numerous contributions, including:

• serving as chair of SDM’s Student Leadership Council;• coordinating logistics for the MIT Career Fair attended by 6,000 students—including

contracting, catering, mail service, hotels, and parking for 400 organizations and 1,500 human resources representatives as well as corresponding with 400 organizations to raise SDM’s visibility in advance of the event;

• assisting with SDM Silicon Valley Tech Trek outreach and recruitment efforts; and• fostering an environment of inclusion for all SDM fellows by serving as an active

member of SloanLGBT, participating in an LGBT panel during fall 2013 Sloan Innovation Period, and meeting with Sloan LGBT AdMITs during campus visits.

Finalists for the award included SDM ’13s Suzanne Livingston and Marianna Novellino. Both were cited for several significant contributions, including serving as key members of WiSDM (Women in SDM) and cofounding (with others) the MIT Product Management Club (PMC).

Since its founding in spring semester, 2013, the PMC: • grew from fewer than 20 members to over 300;• offered meetings and workshops for students with experts from Microsoft,

LuckyLabs, Google, Cisco, Yelp, the venture capitalist community, and product management educator John Mansour;

• created a well-attended (80+ students) mock interview event that brought experienced project managers from Google, IBM, Akamai, and others to MIT to help students sharpen interviewing skills;

• became the first SDM-initiated club to be recognized by Sloan, which provides significant funding and marketing opportunities; and

• established a partnership between MIT and the Boston Product Management Association (BPMA), enabling all MIT students to attend BPMA events and recruiting sessions at reduced membership rates.

In addition, Novellino:• Served as managing director of MIT’s 2014 Sustainability Summit and as a panel

coordinator for the 2013 Sustainability Summit; • Helped coordinate 32 events during 2013 as a member of the SDM Student Life

Committee; and • Currently works on water supply systems in rural communities in India as a Tata

Fellow.

Congratulations and thank you to all!

Stephanie Goerges is the

winner of the 2013 SDM Best

Thesis Award. An alumna of the

SDM master’s and certificate

programs, she is currently in

charge of worldwide technical

functional excellence, systems

engineering, in the Engine

Business Unit of Cummins, Inc.

Thesis advisor: Qi Van Eikema

Hommes, research affiliate

and lecturer, MIT Engineering

Systems Division.

System Theoretic Approach for Determining Causal Factors of Quality Loss in Complex System Design

The challenge: The inability to meet a product’s performance objectives results in quality loss for the customer. Typically, product design organizations use methods such as failure modes and effects analysis (FMEA), fault tree analysis (FTA), and robust design throughout the development process to determine the design weaknesses that could lead to quality losses.

As automotive products become more complex, predicting the capability of a system to meet key performance objectives using these methods becomes more difficult due to an increase in the causes of quality losses. These include component interactions, software design flaws, and the presence of unanticipated noise factors.

The approach: In the hopes of finding a more suitable method for analyzing complex systems, hazard analysis methods were reviewed. Safety, like quality, is an emergent property of the system, and current hazard analysis methods include the use of FMEAs and FTAs.* Therefore, this was an appropriate area to explore for improved quality methods.

System theoretic process analysis (STPA) provides a method to determine the causal factors that lead to accidents or loss by treating accidents as control problems. Causes for inadequate control are expanded to include not only component failures, but also interactions between system elements as well as between the system and the environment in which it operates. The STPA process does not assume that all elements of the system, including software, have been designed or implemented correctly.

The process: Stephanie Goerges, SDM ’11, adapted STPA for quality losses, noting that the language of safety appropriately conveys severity: “safety,” “accident,” “hazard.” In many industries, failure modes identified as contributing to a hazard or accident are treated with increased attention and level of analysis. To distinguish less severe forms of quality losses from those that contribute to accidents, Goerges developed terminology that conveys a more appropriate level of severity.

The proposed STPA terms for general quality loss used were:• Instead of “accident,” the more general term “loss”; • Instead of “hazard,” the term “undesired system state”; and• Instead of “unsafe control actions,” the term “inadequate control actions.”

Example of STPA for quality losses: This study involved a technology change to an existing system component. Though the functions of the system were unchanged as a result of the technology migration, the manufacturing processes and detailed component design—e.g. part dimensions or material selection—were impacted.

sdmpulse spring 2014 sdm.mit.edu

About the Author

* Leveson, N.G., Engineering a Safer World: Systems Thinking Applied to Safety. MIT Press, 2012.

4

MANUFACTURINGPROCESS

DESIGN PROCESS

OPERATING PROCESS

ActuatorCommands

Sensor Feedback

OperatorActions

I & TFeedback

Quality Data

DFM Data

ProductDevelopmentOrganization

Design Process

EmbeddedController

End of LineInspection

and Test

Manufacturing Process Operating Process

ChangeActions

Analysis & Test

Feedback

ManufacturingSpeci�cation

ManufacturingSpeci�cation

DesignSpeci�cation

Warranty Data

Performance Data

Applying STPA involved two preparatory steps:

• Step 1: Identify system loss and undesired system states. The quality losses for this system included (1) the inability to meet tailpipe emissions standards, (2) increased warranty claims due to decreased component reliability, and (3) increased system cost due to overdesign. Eleven undesirable system states were identified that could lead to quality losses for the system. An analysis of the system’s functions identified the undesirable states.

• Step 2: Outline hierarchical control structure. The hierarchical control structure has been divided into three distinct sections: the operating process (green), the manufacturing process (blue), and the design process (red). Detailed control structures for each of these sections were developed. Eight control actions were identified for the system across the three sections. (See Figure 1.)

continued on page 6

Figure 1. This hierarchical control structure reveals the interrelationships between various processes.

5

continued from page 5

bes

t th

esis

System Theoretic Approach

The findings: Applying STPA to all inadequate control actions within the three areas of the hierarchical control structure yielded 125 possible causal factors that could lead to the losses identified in preparatory Step 1.

One of the causal factors identified by analyzing the inadequate control action that led to an undesired system state in the operating process was a noise factor out of expected range. The proposed solution was to add a process model of the noise factor in the controller that will impact the operation of the appropriate control action. This is an example of a causal factor due to a software design flaw (specifically a missing process model) that was not identified using traditional quality analysis methods.

The results: As part of the new product development process, a functional FMEA and FTA of a similar scope to one of the operating processes was conducted. The STPA process identified more causal factors than the FMEA or FTA. There were no causal factors identified by the FMEA or FTA that were not identified by the STPA (Figure 2). Causal factors identified by both the STPA and FMEA are marked on the control loop diagram by yellow hexagons. Causal factors identified by both the STPA and FTA are marked on the control loop diagram by blue triangles.

Recommendations to sponsoring company: The STPA of this study yielded 19 recommendations for the sponsoring company. Examples of recommendations include adding embedded diagnostic algorithms to the system, determining the correlation between the measurement systems of the sponsoring company and one of the component suppliers, and initiating a project to improve the change management process in new product development.

Control Input 2

FMEA

Measure Signal 1 Measure Signal 2Control Input 1

FMEA

B

FTA

DesignSpeci�cations

Embedded Controller

Model 2Model 1

FTA

FMEAFTA

Operating Process

Failure Identi�ed by Functional FMEA

Failure Identi�ed by FTA

FMEA

Legend

FTA

Noise 7 Noise 8

Actuator 2Command

Actuator 1Command

FMEA

Other Controllers

Measured Signal 2

Measured Signal 1

Input 2 FMEA

Input 1 FMEA FTA

A Input 3 FMEA

Input 4

FTAFMEA

Noise 4

FMEA

Noise 3Noise 2

FMEA

FTA

Noise 1

FMEA

Part to PartVariation

FMEA

Degradation over Time

FMEA

Other outputs

Primary output & Actual Signal 2

FMEAFTA

Actual Signal 1

sdmpulse spring 2014 sdm.mit.edu

Figure 2. Control loop diagram pinpoints causal factors that could lead to loss.

6

Snapshot: SDM Class of January 2014

7

On January 6, 41 early to mid-career technical professionals formally matriculated as SDM’s class of January 2014. Fellows in this cohort, as in previous years, come from diverse industries, including energy, healthcare, software, defense, information technology, consulting, automotive, aerospace, and the military.

Demographics:• 35 men• 6 women

Sponsorship:• 18 company-sponsored • 23 self-sponsored

Average age / average previous work experience: • 34 / 10 years

Citizenship:• Canada, China, India, Ireland, Mexico,

Morocco, Nigeria, Singapore, South Africa, Thailand, United States

Nathan BowerSoftware Engineer, Chenega Corporation“I want to work as a system/software architect designing or integrating complex systems. SDM’s emphasis on systems thinking will help me reach this goal.”

Christopher ChooFormer Manager, Track Infrastructure, Power and Communications, Singapore Grand Prix“SDM is ideal for someone like me who has varied interests across both engineering and management disciplines.”

George ClernonEngineering Tools Manager, Analog Devices“There’s an ongoing application of my SDM learning…in my everyday work.”

Jillian WisniewskiCaptain, US Army“My SDM education will enable me to apply systems engineering and OR (operations research) concepts, and to effectively teach them to my future (West Point) students.”

MOG Update: MIT-Chile Natural Resources Workshop in Chile

The mission of the MIT Mining and Oil & Gas Club (MOG), cofounded by SDM students, is to increase awareness and interest within the MIT community concerning the global scale of the natural resources industry while simultaneously promoting MIT to stakeholders in this sector. Following is a brief summary of its latest effort excerpted from an article by Renato Lima de Oliveira, MIT Ph.D. student in political science. The full report is available at sdm.mit.edu/miningtrip.

In December 2013, an interdisciplinary group of researchers, faculty, and students from MIT and Harvard traveled to Chile to explore innovation and technology transfer in the mining industry as well as a vision for the future of cities that are impacted by the exploitation of natural resources. Initiated by the MIT Mining and Oil & Gas Club (MOG), which was founded by several SDM students in 2012, the MIT-Chile Natural Resources Workshop was organized in partnership with MIT-Chile, a program of the MIT International Science and Technology Initiatives (MISTI) and the MIT Sloan Latin America Office.

SDM ’12 Juan-Esteban Montero, a native Chilean and a MOG founder, said, “We selected Chile because mining has been its most important industry for the last century. This trip enabled us to work with professionals from every part of the industry, including engineers, community leaders, and government officials, and to build and strengthen their relationships with MIT.”

The MIT Chile group at the Advanced Mining Technology Center at the University of Chile

sdmpulse spring 2014 sdm.mit.edu8

Juan-Esteban Montero (center) and John Helferich (left) with Diego Hernández, ex-president of Corporación Nacional del Cobre de Chile (Codelco-Chile), the largest copper production company in the world, at the Copper 2013 Conference in Santiago, Chile

http

://

>

To read more about the MIT-MOG Chile trip, visit

sdm.mit.edu/miningtrip

Activities during the one-week trek included:

• Attending the Copper 2013 Conference. Several MIT faculty members and students delivered presentations, among them Nancy Leveson, professor of aeronautics and astronautics and engineering systems, who described a model of evaluation that leads to safer systems called Systems-Theoretic Accident Model and Processes (STAMP). Leveson later introduced STAMP at a meeting of the Chilean Safety Association and ESD Ph.D. candidate John Helferich, SDM ’10, described STAMP and its uses for food safety to members of the MIT Chile Club.

• Visiting the Advanced Mining Technology Center (AMTC) at the University of Chile. The group learned about projects that included developing physical models of completely automated mineral extraction for underground mining and driverless cars for mining applications.

• A 1,000-kilometer journey to Antofagasta, where they toured the Escondida mining operations. The largest copper mine on earth, the Escondida mine employs 15,000 workers and produces 5 percent of the world’s output of copper. A visit to the Komatsu factory and talks with local stakeholders and social entrepreneurs followed, as well as participation in Antofagasta’s first “hackathon” to explore the city’s future 200 years from now.

“With its sound planning and impressive execution, this trip surpassed our highest expectations, adding real value and leaving a strong impression on all those involved,” said Jorge Le Dantec, SDM ’13, president of MOG. “We [are now] analyzing scenarios for visiting East Africa, Brazil, or Australia, where the extractive industries are facing particularly interesting challenges.”

9

Daniel J. Sturtevant, Ph.D.,

is an SDM alumnus and

recent graduate of the MIT

Engineering Systems Division.

He is a researcher at Harvard

Business School and founder of

silverthread, Inc., which focuses

on reducing technical debt.

Jeanne Contardo, M.A., Ph.D.,

is a senior consultant for the

Business-Higher Education

Forum, where she focuses on

the development of unique tools

and resources that can influence

education change and workforce

alignment, including online

simulation models. Read more at

www.bhef.com.

10 sdmpulse spring 2014 sdm.mit.edu

About the Authors Using SDM Techniques to Drive Educational Reform

The challenge: Many CEOs are concerned about the future American workforce because• interest in science, technology, engineering, and math (STEM) fields remains low;• college costs consistently outpace inflation; and• graduates lack both the hard and soft skills needed to succeed professionally.

Despite a stunning sum being spent on education in the United States—nearly $600 billion for K-12 schooling alone in 2013—by most indications, the results remain mediocre.

Thirty years ago, the National Commission on Excellence in Education published the landmark report A Nation at Risk: The Imperative for Education Reform. It sparked three decades of sincere efforts by educators and policymakers that cost trillions of dollars, yet the United States failed to build a system that ensures students attain the competencies the country needs. Our research examined how this happened and explored possible solutions.

The approach: Education is an extremely complex system. Noble attempts at reform often fail because there is little understanding of how the system works in its totality. Also, policymakers typically do not have the tools to successfully address roadblocks such as internal tensions, delays, feedback, and unintended consequences.

By treating education as a complex system and modeling it using system dynamics—as well as discrete event, network, operations research, and agent-based techniques—we attempted to move away from the research efforts of the past, which have been too narrow to drive systemic reform agendas.

Over the past six years, we explored the potential of modeling to help: • identify important trends; • develop robust policy timelines and goals; and • explain worse-before-better patterns.

Our partners included: • schools, including the University of Maryland and Edmonds Community College;• communities in Louisville, KY, and Dayton, OH;• nonprofits, including the Hewlett and Gates foundations; • government bodies, notably the Office of Naval Research; and • companies, such as Raytheon and Boeing.

Over that time, we found modeling to be a valuable tool for exploring many intriguing questions, including:

• Why did student outcomes suffer when California spent $2 billion to reduce class sizes?

• Why have thousands of STEM enrichment programs had virtually no impact?• Why did a low-cost partnership with a community college dramatically improve

profitability for a major logistics hub?• How does high unemployment coexist with high demand for employees?

10

9

87

1 5

4

32

They move

1. People graduate2. The unemployed seek work, �rms hire3. Employed people seek work, �rms hire4. Firms lay o�5. People retire

They learn

6. People in school learn 7. The unemployed learn 8. Employees learn 9. The skills �rms need change 10. Societal level innovation and knowledge expansion

6

continued on page 12

The process: We partnered with the Hewlett Foundation to develop the “aligned workforce model,” a web-based simulation that considers (among other things): How would workforce outcomes change if policies were implemented that emphasized “deeper learning” skills such as mastery of core academic content, critical thinking and problem-solving, collaboration, effective communication, self-directed learning, and an academic mindset?

This agent- and network-based model simulates an economy that includes firms with changing needs and people with particular sets of skills that evolve from education through retirement. The model illustrates the benefits of better aligning educational institutions with employers, teaching “soft skills” such as time management, and altering practices related to hiring, evaluation, and lifelong learning.

In some respects the model functions like a board game. Simulated people learn new skills, seek work, use their capabilities on the job, and mature. During simulated careers, people move and learn. They seek to attain happy and productive professional lives. Simulated firms aim to become more productive and lean.

The model also represents the body of human knowledge as a network of skills that grows through technological innovation. Each person navigates this vast network of knowledge, building interrelated competencies over the course of a career. Firms need workforces with various skills, and these needs change over time.

Figure 1. This chart illustrates the aligned workforce model approach.

11

sdmpulse spring 2014 sdm.mit.edu

Figure 3. This histogram shows the distribution of value firms place on skill sets based on the mismatch between supply and demand. Note that some people’s skills are highly valued while others are not. In the real world, this difference would result in wage differences. As a result, the model reveals the effects of such a mismatch on a simulated middle class.

15%

10%

5%

0%0 10 20 30 40

continued from page 11

Figure 2. This graph shows the career trajectory of a single virtual person. This individual learns over a lifetime, but only some of her accumulated skills are in demand, both in the overall economy and with her current employer.

SkillsHigh-demand skills (Economy)High-demand skills (Current Employer)

40

35

30

25

20

15

10

5

0January 1, 2050

Educational Reform

The results: The model makes it possible to explore how different policy choices might affect unemployment, employee retention, workforce effectiveness/employee happiness, productivity/profitability, and the distribution of wealth in the real world.

Next steps: Our goal in developing the aligned workforce model is to• provide a strong visual tool for exploring the business and societal value of policy alternatives, such as an increased

focus on what the Hewlett Foundation calls “deeper learning”;• identify areas where additional research on deeper learning could be helpful; and• provide a way for diverse stakeholders to constructively join nationally important conversations.

The model is currently in the final phases of development. Our findings and subsequent policy recommendations will be released this year. At this stage, we are looking for people willing to provide constructive feedback. Please contact us at dan.sturtevant@sloan.mit.edu, 781.223.8200, if you are willing to participate.

http

://

>

To read the entire article describing this project, visit

sdm.mit.edu/educationalreform

12

Fall 2013 ReportInnovation can be as close as your own back yard—as 21 SDM fellows discovered on Oct. 15, 2013, when they toured two local companies during SDM’s fall tech trek.

Each year, SDM Tech Treks give students the opportunity to:• Learn how growing and established companies manage their systems challenges;• Experience different company cultures and consider what connections exist between culture and business operations; and • Explore potential career directions based on first-hand company knowledge.

This fall’s trek took students to Amazon Web Services (AWS) in Cambridge, MA, and Demandware in Burlington, MA. “They both rolled out the red carpet for us,” said Jonathan Pratt, SDM’s director of recruiting and career development.

At AWS, a cloud computing service provider founded to meet Amazon’s internal need for additional resources, SDMs learned that:• The company has expanded exponentially, enabling Amazon to offer cloud capabilities to third-party sellers; • AWS services are attractive to other companies because they reduce capital requirements (startups, for example, don’t need as

much seed funding to support information technology); and• The company’s business model is similar to a utility’s, with AWS retaining the infrastructure and customers buying capacity as

needed.

The AWS visit was hosted by two SDM ’13 alumni—Ricardo DeMatos and Ari Liberman, both of whom work at AWS—and was coordinated by Senior Account Executive Thomson Nguy.

SDMs also got to meet top management at Demandware, including Senior Director of Platform Engineering David Boyle and Chief Operating Officer Jeff Barnett. The leaders explained that Demandware:

• Created the infrastructure to host e-commerce sites for many leading retailers, including Adidas, Crabtree & Evelyn, Ethan Allen, Godiva, L’Oreal, and Panasonic;

• Uses systems thinking to match hardware infrastructure with the unique needs of each retail business;

• Employs a single software platform, upgraded up to six times a year, to ensure retail sites remain on the cutting edge; • Provides software to help clients manage, provision, and run their storefronts; and• Bases its financial model on charging a percent of sales revenue for hosting e-commerce sites.

SDM Tech Treks

Spring 2014 Preview Tech treks benefit both students and companies. The SDM cohort gains a deeper perspective on the types of complex challenges leading firms face in the marketplace. SDM fellows learn how the approaches they are discussing in the classroom can be used to tackle systems issues in real-world situations. And, companies benefit from broad discussions that open up the potential for expanding partnerships with SDM—through class projects, internships, and recruiting.

The SDM cohort will be heading to San Francisco in late March 2014 for a weeklong tech trek exploring leading companies in the Bay Area. The group will visit Google Ventures, AppDynamics, Intuit, Panlantir, Salesforce.com, Tesla Motors, SanDisk, and Yelp. A report on the highlights will appear in the next edition of the SDM Pulse.

If your company would like to participate in an upcoming SDM Tech Trek, please contact SDM Industry Codirector Joan Rubin at jsrubin@mit.edu or 617.253.2081.

Photo courtesy of Demandware

13

Donny Holaschutz, SDM

alumnus and an inodú

cofounder, is a seasoned

entrepreneur with experience

in both for- and not-for-profit

ventures related to clean and

sustainable technology. He holds

a master’s degree in engineering

and management from MIT and

bachelor’s and master’s degrees

in aerospace engineering from

the University of Texas at Austin.

Jorge Moreno, SDM alumnus

and inodú cofounder, has

extensive experience in the

energy industry in the United

States and Latin America. He

holds a master’s degree in

engineering and management

from MIT and bachelor’s and

master’s degrees in electrical

engineering from the Pontificia

Universidad Católica de Chile.

continued from page 1

14 sdmpulse spring 2014 sdm.mit.edu

Systems Thinking in Chile

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4000 5000 6000 7000 8000 9000 10000 11000 12000

Cost

of E

lect

rici

ty($

USD

/kW

h)

Tons of Carbon Dioxide Produced Per Year

Actual Consump�on at Observatory (3,484 Cases)Varia�on Introduced to Actual Demand and Renewable Resource (3,854 Cases)Cases with Solar and Fossil Fuel Generator without Wind TurbineCases with Wind and Fossil Fuel Generator without Solar Turbine

Cases with Current Turbine Opera�ng as Backup

Cases with Current Turbine Opera�ng as Primary Unit

Figure 1. Potential hybrid system solutions shown against cost and environmental friendliness metrics.

About the Authors

The inodú team then developed energy system goals and requirements. By engaging the stakeholders and understanding the local context, the team was able to consider the system beyond purely economic considerations—including such properties as reliability, maintainability, flexibility, adaptability, reparability, modularity, evolve-ability, robustness, and environmental friendliness. The system goals and requirements synthesized by the team were used to establish a frame of reference by which all possible solutions could be evaluated.

Next, inodú employed a powerful modeling tool to evaluate many hybrid system configurations (solar, wind, batteries, and fossil fuel generators) and assess them in light of the defined system goals and requirements. These potential solutions were then compared to connecting the observatory to the grid, 50 kilometers from the facility. Finally, the team conducted a study to identify some of the legal and permitting challenges associated with the development of the project.

The findings: The “design space” was defined and analyzed through the frame of reference set by the system goals and requirements. The team identified the following insights (Figure 1):

• Based on wind and solar resource assessments, the expected observatory load profile, and equipment alternatives, the solar/fossil fuel generator hybrid solution will be more reliable, cost-efficient, and environmentally friendly than a wind/fossil fuel generator hybrid solution.

• The size and number of the fossil fuel generators are the design variables that have the most impact on the current configuration’s environmental friendliness and cost efficiency metrics.

http

://

>

To read the entire article describing this project, visit

sdm.mit.edu/chile

Figure 2. Evaluation of cases against defined requirements.

Understanding the stakeholders’ needs and constraints allowed the team to finally arrive at five potential solutions based on hybrid systems. In addition, the team evaluated the option of developing a transmission line to connect the observatory complex to the grid. The alternatives can power Paranal’s energy demand with the E-ELT included. A summary of the evaluation is presented in Figure 2. It was found that the cost of the transmission is comparable to the cost of developing hybrid-isolated system solutions in the region.

The results: By synthesizing the key stakeholders’ constraints and perceptions of how the energy system should create value for the observatory—as well as visiting Paranal to observe the system and the operators at work—inodú facilitated a joint fact-finding process that allowed the Chilean government and ESO to systematically evaluate different alternatives for providing energy to the Paranal Observatory and the future E-ELT.

Inodú found that developing a high-voltage transmission line to Chile’s Central Interconnected System is comparable in cost to developing a highly reliable hybrid isolated system. The development of a transmission line would elegantly satisfy the primary system goal, which is to facilitate astronomic observation in a more reliable, cost-effective, and environmentally friendly manner.

Special thanks: We would like to thank Marcel Silva from the Chilean Energy Ministry and Roberto Tamai from the European Southern Observatory for their support of this project.

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sdmpulseVol. 9, No. 1 Spring 2014 Copyright MIT, all rights reserved

Publisher: Joan S. Rubin, MIT SDM Industry Codirector

Editor: Lois Slavin, MIT SDM Communications Director

Contributors: Jean Contardo, Ph.D.; Jesse DeLaughter; Stephanie Goerges; Donny Holaschutz; Jorge Le Dantec; Juan-Esteban Montero; Jorge Moreno; Camila Lértora Nardozzi; Renato Lima de Oliveira, Ph.D.; Daniel Sturtevant, Ph.D.

Layout: Dave Schultz

Copy editor: Kathryn O’Neill

Printer: Puritan Capital

MIT’s System Design and Management program is jointly offered by the MIT School of Engineering and the MIT Sloan School of Management.

For further information, visit sdm.mit.edu.

A V A I L A B L Eon demandPrerecorded webinarssdm.mit.edu/voices/webinars.htmlVideos: sdm.mit.edu/voices/videos.html

>

MIT SDM Systems Thinking Webinar SeriesThis series features research conducted by members of the SDM community.All webinars are held on Mondays, from noon to 1 p.m., and are free and open to all. Details/registration: sdm.mit.edu.

May 5

Strategy, Simulation, and Analytics for the Complex World of EducationDaniel Sturtevant, Ph.D. and SDM alumnus, and Jeanne Contardo, Ph.D.

May 19

Risks and Mitigation Approaches for Business System Integration Daniel Adsit, SDM alumnus

June 2

The Maturation of Model-Based Systems Engineering: OPM as the ISO Conceptual Modeling Language Dov Dori, Ph.D., visiting professor, Engineering Systems Division, MIT

June 16

Accelerating Disruptive Solutions in Healthcare and Medicine Through Hackathons Andrea Ippolito, SDM alumnus and Ph.D. student, Engineering Systems Division, MIT; Allison Yost, Ph.D. candidate, mechanical engineering, MIT

July 14

Designing Systems for Corporate InnovationMona Vernon, SDM alumna and senior director for emerging technology at Thomson Reuters

Event information includes all details available at press time. For more current event information, visit sdm.mit.edu.

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sdmcalendarspring

2014March 24–29 2014 SDM Silicon Valley Tech Trek Details: See page 13

June 4 2014 MIT SDM Information Evening Boston Marriott Cambridge Learn about the MIT master’s of science degree in engineering and management; discuss career opportunities; and network with SDM alumni, faculty, students, and staff. Details/registration: sdm.mit.edu