October 4, 2014 1 Crafitti Consulting Private Ltd.

INVITED TALK:
CHOICE COMPLEXITY
TECHNOLOGY DECISIONS
for New Product Development
Navneet Bhushan
navneet.bhushan@crafitti.com
Phone: +91 9902766961
22 August 2014,
GTRE, DRDO,
Bangalore
Questions!
Do you think Decision Making is your Teams
Strength?
Do you think Problem Solving and Innovation
are your Teams Strengths?
Do you Manage Crisis all the times in all the
projects or most of the times? Or do you avoid
Crisis?
Do you and your Team always know the Value you
are delivering to your Customer?
NO
What is Crisis Avoidance?
We Know Value But Customer Doesnt Know
our Value Dont know why?
How do we make Decisions?
Dostoyevsky


man acts in the way he feels like acting
and not necessarily in his best interests
A GAME OF CHANCE
Please give your preference choice from the following
options. You have 4 Ladoos to choose from.

With each choice you will get two benefits an initial
sum of money and a chance to get $1Million in a
sweepstakes (confirmed to get with specific probability)
Option You Get Immediately (USD) Probability to get $
1 Million
Ladoo A 2000 1%
Ladoo B 1000 5%
Ladoo C 500 10%
Ladoo D (Minus) 5000 (You Pay
initially)
15%
A GAME OF CHANCE The results (9 respondents)
Option Number of People Reasons
Ladoo A 4 Probability of 15% is too low hence
take maximum immediately
Ladoo B 1 I want some money assured and I am
ok to take some risk as well
Ladoo C 3 I can live with 10% chance of winning
with a smaller immediate benefit. The
outflow of 5000 with a likelihood of
not winning is not all that palatable.
Ladoo D 1 Willing to surrender current gains for
future value. It is an investment-
however willing to take the risk of
actually loosing
Which Ladoo will you choose?
A GAME OF CHANCE The results Surprising .
Rationality/Objective/Value theory tells us the following formula

Profit = Gains Investment
Value = probability x Prize + Initial Gain
Option You Get Immediately (USD) (G) Probability (p) to get
$ 1 Million in next
three months
Value = p x 1000000 +
G
Ladoo A 2000 1% 12000
Ladoo B 1000 5% 51000
Ladoo C 500 10% 100500
Ladoo D (Minus) 5000 (You Pay initially) 15% 145000
The Rational Value theory tells us Ladoo D will give the maximum gains, however, human
beings give different weights to different parameters hence the variation

1. Ladoo A guys are saying Let me get what I am getting now (2000 USD) I know whether
it is 1% or 15% it is same I will not get it!
2. Ladoo C guys want to get maximum of both sides certainty and uncertainty thereby
saying I will not give anything from my pocket (-5000) but still would like to maximize the
probability of getting maximum in the sweepstakes.
3. Ladoo D is the rational value follower with objective analysis he follows the rationality
based on mathematical analysis. He is taking calculated Risk!!!
4. Ladoo B is the most perplexing! (may be caught in between A and C)
A GAME OF CHANCE Inferences .
Rational Value Theory is not the way in which people decide. In real life
people perceive specific coarse weights (for example anything below
20% is actually 0% probability) (DECISION MAKING IS EMOTIONAL,
EXPERIENCE BASED SUBJECTIVE PROCESS)

Giving away what you possess now, even if you have a probability of
getting high returns is a very difficult threshold to cross. (RISK
THRESHOLD) {A Bird in Hand }

Companies that are getting Ladoo A regularly will find it difficult to
invest for Ladoo D even if the rational value analysis says D is better.
(COMFORT ZONES)

Different people give different preferences to different parameters of a
problem hence it is not a simple matter of arithmetic. (PERSON
DEPENDENT)
Decision Making in a Complex World
Contents
Globalizing World Complexity Explosion
Need for Decision Engineering
Problem Solving, Brainstorming,
Innovation and Decision Making
New Methodologies AHP, DSM, TRIZ,
SBCE, Decision Dependency Matrices
Case Studies
Possible Ways Ahead
Globe has been Re-engineered!
Flattening World
And we dont even realize it
While the defining measurement of (old
world) was weight the defining
measurement of the globalization system is
speed speed of commerce, travel,
communication and innovation
Thomas L. Friedman, The Lexus and Olive Tree
Complexity in a Flattening World
Number of alternatives
Time pressure
Need for analysis
Information de-coherence
Connections
Networks
Human Processing Limits
(The Magic Number 7 2)
Framing Limits
Confidence
Rapid Explosion
of Complexity
Connections create Value and
Dependencies create complexity
Future is approaching us Faster than
History is leaving us!
Increasing distance between user
requirements of what they really need
versus what they want.
With every choice we make today we Kill
many possible futures
Decision Making in a Flattening World
Number of alternatives
Time pressure
Need for analysis
Information de-coherence
Connections
Networks
Human Processing Limits
(The Magic Number 7 2)
Framing Limits
Confidence
Rapid Explosion
of Complexity
Each Decision (a Choice) affects future
Choices (decisions)
Each Decision is impacted by past
Decisions (Choices) made by someone
somewhere
With every choice we make today we Kill
many possible futures
With every choice we make today we
Select only a small subset of possible
futures
The Magical Number Seven, Plus or Minus Two:
Some Limits on our Capacity for Processing Information

George A. Miller (1956)
Harvard University
First published in Psychological Review, 63, 81-97.

[1] This paper was first read as an Invited Address before the Eastern Psychological Association in Philadelphia on April 15, 1955.

The point seems to be that, as we
add more variables to the display,
we increase the total capacity, but
we decrease the accuracy for any
particular variable. In other
words, we can make relatively
crude judgments of several
things simultaneously.
13
DECISION MAKING Involves Choice
Def: Choice of an alternative(s) amongst a set of alternatives on some basis
or criteria (usually many, often conflicting) to meet one or multiple objectives
by one or more actors
.
.
.
GOAL (s) CRITERIA
.
.
.
ALTERNATIVES
.
.
.
Actors/
Decision Makers
(Group Decision
Making)
Theory and Practice How Decisions are made in
Organizations*
NORMATIVE METHODS - What should be done based on rational
theories of choice
DESCRIPTIVE BEHAVIOR What is actually done by individuals and
groups in practice
* Hoch & Kunreuther, A Complex Web of Decisions, Wharton on Making Decisions, Wiley 2006
Prescriptive
Recommendations
Normative
Models
Descriptive
Behavior
Rational Behavior
Maximize Utility
Individuals do not
maximize their Utility
in practice
Managers often are so caught up in
making decisions that they rarely have
the luxury of giving much thought to
how they make them
Spending time thinking
about the process of
decision making can have
significant payoffs,
however, because it can
help you improve quality
and effectiveness of
subsequent choices
Case for Decision Engineering
An Emerging Discipline for developing Tools
and Techniques for informed Operational and
Business Decision Making/Problem
Solving/I nnovation within Industry by
collating and exploiting distributed
organizational knowledge
Situation
Assessment
Explanation
Forecasting
Options
Generation
Making
Decision -
Choice
Stages & Requirements in Decision Making
Situation
Assessment
Data Collection
Data Cleansing
Data Collation
Classification
Observation
Explanation
Causal
Analysis
Cognitive
Mapping
Systems
Analysis

Forecasting
Historical
Analogies
General
Analogies
Prediction
Projection
Forecasting
What if
Analysis

Options
Generation
Decision
Trees
Scenario
Writing
Alternatives
Brainstormin
g
Solution
Choice
Optimization
Decision
Making under
uncertainty and
partial
information

Situation Assessment Where do we stand?
Simple Indicators and Checklists/ Complex Indicators/ Scaling (R-factor Analysis)/
Typologies (Q-factor Analysis) /Cluster Analysis /Multidimensional Scaling/ Artificial
Neural Networks (ANN)/ Value Stream Mapping / TRIZ 9 Windows/ TRIZ- Ideal Final
Result
Explanation Why are things as they are?
Correlation Analysis/ Regression Analysis/Analysis of Non-Linear Relationships/ Partial
and Multiple Correlation Analysis/ Multiple Regression Analysis/ Path Analysis
Forecast What will happen?
Systematic Expert Judgment/ Decision Matrix/ Analytic Hierarchy Process/ Bayesian
Inference/ Cross-Impact Analysis/ Early warning Indicators/ Extrapolation with Moving
Averages/ Trend Analysis/ Time Series Analysis/ Spectral Analysis/Combined Trend and
Time Series Analysis /Trend Impact Analysis
Preparation of Decisions What are the Options?
Game Theory/ Gaming/ Computer Simulation/ Cellular Automata/ Petri Nets/ Econometric
Models/Mathematical Modeling / TRIZ
Choice What to do?
Decisional Trees/ Decisional Matrix/ Linear Partial Information (LPI) Analysis/
Linear/Integer/Non-Linear Programming/ Heuristic Optimization Techniques Genetic
Algorithms, Simulated Annealing, Tabu Search, Artificial Life / AHP
Techniques & Methodologies
Skill Set & Capabilities to be
Developed/Acquired
Data Sampling and Collection
Statistical Analysis
Data Visualization
Mathematical Modeling
Petri Nets
System Dynamics
Cellular Automata
Process Algebra
Simulation
Systems Analysis
Optimization Tools and
Techniques
Linear and Non Linear
Heuristic Optimization
Operations Research Queuing
Theory
Industrial Engineering
Quantitative Techniques for
Extracting Judgment
MAUT/ AHP
Methods for Group Decision
Making and Consensus
Risk Analysis Methodologies
Crisis and Disaster Management
Models
Crisis Gaming/Business Gaming
Effort/Cost Estimation Models
Knowledge Management Models
Business Intelligence Generation
and Management
Artificial Life Techniques
Game theory
TRIZ
Decisions need to be Engineered.
Strategic/Policy
Evaluating Options/Alternatives
Evaluating Factors affecting a particular decision
Evaluating ROI/ Cost Benefit Analysis
Evaluating Uncertainty
Market Analysis/ Technology Forecasting
Operational
Process Evaluation
Process Optimization
Performance Evaluation
Evaluation of Quality Attributes Reliability/Availability/
Survivability
Project/Program Execution
Technology Evaluation
Choosing a Product
Benchmarking products
Evaluating Architectures
Multi Criteria Decision Making
A decision may need to be taken on the basis of
multiple criteria rather than single criterion
Assessment of various criteria and evaluation
of alternatives on the basis of each criteria
Aggregation of these evaluations to achieve
ranking of alternatives
The problem is further compounded when there
are multiple experts whose opinion needs to be
incorporated in the decision making
to organize multiple criteria
to assess multiple criteria (on the same scale)
to evaluate alternatives
to rank alternatives
to incorporate judgments of multiple experts
The Problem
Lack of adequate quantitative information leads
to dependence on Intuition, Experience and
Judgment of Knowledgeable persons called
EXPERTS
COMPARING APPLES WITH ORANGES
AN EXPOSITION OF AHP
Analytic Hierarchy Process
Similar to Decision Matrix approach but allows a
wider range of values in comparison of alternatives
Developed by T.L. Saaty (1980)
AHP invites pair-wise qualitative comparisons
The problem is organized as a hierarchy
Bhushan N. and Rai K., Strategic Decision Making
Applying the Analytic Hierarchy Process, Springer,
2004

Analytic Hierarchy Process For Decision
Making
Goal
Criterion 1
Criterion 2
Sub Criterion 1.1 SC 1.2
SC 2.1 SC 2.2
Alternative 1 Alternative 2 Alternative 3 Alternative 1
AHP Example
Organize the problem as a Hierarchy
Car Rating
Cost Dependability
Size Aesthetics
Santro Indica Zen
AHP Example
Collect Data in the specified formats
Crit.
EI SI I MI EQ MI I SI EI
Crit
Cost

Dep
Cost

Size
Cost

Aest
Dep

Size
Dep

Aest
Size

Aest
9 7 5 3 1 1/3 1/5 1/7 1/9
EI : Extremely Important SI:Strongly Important I: Important
MI: Marginally Important EQ: Equal
Evaluation of Criterion
Cost Depend. Size Aesthetics NEV
Cost 1 5 7 9
0.64
Depend. 1/5 1 3 7
0.21
Size 1/7 1/3 1 6
0.11
Aesthe 1/9 1/7 1/6 1
0.04
AHP Example
Reciprocal Matrix
Eigen Value: 4.36 Consistency Index: 0.123 Consistency Ratio:
0.137
Criterion Weight Rating of Cars using AHP
Zen Santro Indica
Cost 0.64
0.14 0.43 0.43
Depend 0.21
0.48 0.41 0.11
Size 0.11
0.28 0.65 0.07
Aesthetics 0.04
0.27 0.06 0.67
Weighted Sum 0.23 0.44 0.33
Ranking III I II
AHP : Consistency Evaluation
Principle Eigen Value (Lamda)
|A I| = 0
Order of matrix (n)
For Perfect Consistency : = n
Define Consistency Index (CI) as
CI = | n|/ (n-1)
Random Index (RI)
CI has been generated for random reciprocal
matrices of various order e.g. n= 4 RI= 0.90
Consistency Ratio = CI/RI
CR < 0.1 matrix is consistent
If the Matrix is filled in
totally random manner
the average CI = RI
CR measures how far the matrix
is from total inconsistency
Why AHP ?
Qualitative Inputs
Pairwise comparisons
Gartner
Reduces Complexity of decision by organizing it in
structured format
Promotes comparison of homogeneous characteristics
Framework to check logical consistency
Facilitates What if Scenarios
It undermines Political Agendas
Facilitates Senior Managers buy-in
Sound Mathematical Basis
Consistency Evaluation
CASE STUDY
Mobile Applications
Forecasting
Case Study: Technology Forecasting
Which Mobile Commerce Application will
become Killer ?
Three Dimensional Analysis:
Geography (NA, Europe, Asia-Pacific)
Segment of Population (Youth, Business
People, Common People)
Industry Segment (Travel, Finance,
Retail & Distribution, Infotainment)
Concept of Killer Sure Scores
Bhushan N., Evaluating M-Business Killer Apps A Quantitative Framework, Ist
International conference on M-Business, July 2002, Athens, Greece,
http://www.mobiforum.org/proceedings/papers/06/6.4.pdf.
Legend
Frozen
Cold
Warm
Hot
Red Hot
KiSS (Killer Sure Score)
< 5.0
5.0 20.0
20.0 50.0
50.0 100.0
> 100.0
Killer Sure Scores
Travel
Finance
Retail &
Distributi
on
Infotain
ment
North America Europe Asia Pacific
BP CP
Y
o
u
t
h

BP
CP BP CP
KiSS Analysis of Infostations
Y
o
u
t
h

Y
o
u
t
h

CASE STUDY
Supply Chain Forecasting
Problem Statement
Forecast data from a leading retailer,
The errors shown above are a consequence of
combination of factors
Actual Errors
Assumption
2% reduction
* Assumption $1 mn investment
Improvement
% Error $ Cost*
Basic Item
Fashion Item
% Error $ Savings*
13.1% 160,000
139.6% 580,000
11% 32,000
137.5% 106,000
Three opportunities for Improvement
Areas
Reconciliation of Initial
forecast with Business
Plan
Over-riding of
Reconciled Forecast
Allocation of
Reconciled Forecast
Current Methodology
Initial forecast generated by the
tool is reconciled with the Business
Plan by Inventory & Financial
personnel based on their
experience
Planner based on his experience
can over ride the reconciled
forecast
The reconciled category-level
forecast is allocated to lower
levels based on planners
experience and the tool
Risk
Judgmental errors
Limited ability to
consider and process
large amounts of
information
Judgmental Error
Mis-match with
Business Plan
Judgmental Error
Non- optimal
Allocation
May reduce Category
profitability
Allocation of
Reconciled Forecast
Reconciliation of
Initial forecast with
Business Plan
Over-riding of
Reconciled Forecast
Reconciliation of
Initial forecast with
Business Plan
Over-riding of
Reconciled forecast
Allocation of
Reconciled Forecast
Of the three decision areas mentioned where AHP can
be applied, we have chosen Reconciliation of Initial
forecast with Business Plan, for illustrative purpose
Improvement Areas Decision Criterion
Application of AHP
Calculation of Weights
Inventory and Financial personnel individually compare each
criterion against other criteria in the format shown below
This matrix checks for consistency of the ratings
Application of AHP
Calculation of Weights
As per the comparisons, weights for each criterion are
calculated individually for Inventory and Financial personnel
Application of AHP
Calculation of Weights
Weights for each criterion calculated using inputs from
Inventory and Financial personnel are consolidated
Application of AHP
Calculation of Reconciled Forecast
A category that is to be forecasted is rated across each
criterion on a scale of 0 1 for two forecasting periods
Application of AHP
Reconciled Forecast is calculated using the ratio of the Forecast
Indices
of the two forecasting periods

Forecast (period 2) = (Relative Forecast Index) X Forecast
(period 1)

Forecasted sales for the period 2, is the reconciled forecast on
application of AHP
Continuous Improvement
As a Continuous Improvement process, a part of the
error from the previous forecasting period is added as
a feedback to the current forecasting period.
This process synchronizes the Forecasted Sales to
that of Actual Sales, thereby reducing error
Inventory
Inputs
Financial
Inputs
Application
of AHP
Forecast
Reconciliation
Error
correction
Error
Decision Engineering, TRIZ,
Decision Dependency Matrices
and Set-Based Thinking for
GLOBAL PRODUCT
DEVELOPMENT
2006 Businessweek most manufacturers understand what Global
Product Development (GPD) is and why it is important but few really
understand how to make it successful.
Product Development going Global
Teams around the globe
work together to
conceive, design and
develop new products.
The commercial value
proposition
Leverage the Globe
Time to market
(24x7 Enterprise)
Cost,
Innovation
Quality/ Robustness
Co-located teams
Cross-functional interactions,
Informal collaborations
High bandwidth
communications (face to face
discussions)
Product Development going Global
FROM
Globally dispersed
Culturally un-adjusted
Non-e-mail communication
minimized
Physically unaware teams
Spread over thousands of
miles to collaborate on
new product development
TO
Fuzzy front end of New Product Development amplified in Global Product
Development Scenarios
Dimensions of Global Product Development
GEOGRAPHICAL BOUNDARIES

Near-shoring (within same
country)
Off-shoring (across countries and
continents)

ORGANIZATIONAL BOUNDARIES

In-House (within same enterprise)
Outsourced (across different
enterprises Client Vendor
relationship)
Collaborated (across different
enterprises - peer to peer
relationship)
KEY ENABLERS

Fully digital product
development process
Internet connectivity for
business
Global skilled labor
market
International
collaboration
experience.
Global Product Development Scenarios
GPD Scenarios Geographical Boundaries Organizational Boundaries
Near-
Shoring
(same
country)
Off-Shoring
(across
countries
and
continents)
In-house
(within
same
enterpr
ise)
Out-Sourced
(across
different
enterprises
client vendor
relation)
Collaborated
(across
different
enterprise
s
peer to peer
relation)
Outsourced
Near-shoring

Outsourced
Off-shoring

In-house Near-
shoring

In-house Off-
shoring

Collaborated
Near-shoring

Collaborated
Off-shoring

Winners in the New World

Toyota Lean Product
Development
P&G - Connect &
Develop The Open
Innovation Program
TRIZ
New world needs new ways
Old World
centralized control
centralized management
how to assign work
how to align
how to control
The realization that so called
managerial control is a myth in a self-
organizing and continuously evolving
enterprise has not yet sunk in most of
the enterprises.
LEAN Product Development
How fast one converges to the final design?
Set-Based Concurrent Engineering (SBCE)

A counter-intuitive method of product development where
all alternatives are kept alive as long as possible in the
product development journey
52
Convergence in Design
How to converge from an initial set of conceptual ideas to one idea
that will become the final Design?
Early Convergence Strategy -
Point-Based CE
Design Space
Chosen
Design
Critical
Analysis
Modification
DESIGN CHURNING
Toyotas Slow Convergence
Set-Based CE
Large Design Spaces Integration
of Sets
ELIMINATE WEAKEST
ALTERNATIVES
53
Second Toyota Paradox Set-Based Concurrent Engg
SBCE leading to slow convergence seems like an inefficient and
expensive way to develop products, however, Toyota creates new
automobiles faster than industry average with less effort!!
SET-BASED
CONCURRENT
ENGINEERING
Mapping of the Design Space
C
o
n
c
e
p
t
u
a
l

R
o
b
u
s
t
n
e
s
s

Integration by Intersection
F
e
a
s
i
b
i
l
i
t
y

b
e
f
o
r
e

C
o
m
m
i
t
m
e
n
t

C
o
n
f
l
i
c
t

H
a
n
d
l
i
n
g

SBCE Approach The Five Key Principles [2]
1. Mapping the Design Space
All functional departments identify the
solution space independent of others
Communication between departments
is based on Design Spaces Not on
Single Ideas
Discussion is kept vague and abstract
2. Striving for Conceptual Robustness
Design remains functional after
variations in its environment
Will the Design still fit the solution space
after some time?
Create Designs that work regardless of
what the rest of the team decides to do
3. Integration by Intersection
Overlap of feasible design spaces of the
different sub systems directly
translatable into acceptable solutions
A decision once taken has to be
respected by all
Taking late decisions means that more
importance has to be given to the
decision and hence more effort should
be spent
4. Feasibility before commitment
Multiple concepts considered in parallel
prototypes created and infeasible ones
eliminated
Each concept is analyzed from the
reasons why a concept is still (in)
feasible and the role and impact of
problem in the overall product
SBCE Approach The Five Key Principles [2]
SBCE reduces the cost of taking back a decision earlier made, hence there
is more room to improve the concept while developing it. Wrong decisions
in later phases of the development process do not have much impact on
cost and are far less time-consuming than if these would have been made in
beginning
Client Assisted Design Advice System Solutions that meet the needs of the
customer based on
Equality between all related parties
Avoiding asymmetric dissatisfaction to any party in particular
Equality of priorities of different points of view
Two types of subsets of problems
Competition Vs Cooperation
Domain Level Vs Control Level Conflicts
5. Conflict Handling
SBCE Ideally Suited for Global Product Development Scenarios
SBCE can help in maximizing the dispersed creative capabilities of the teams
at various geographic locations
With each dispersed team making their components robust while exploring
many alternatives; the global product development teams can leverage the
true potential of GPD
The coordination effort which is an overhead will be minimized
Designs that do not meet the tolerance limits will automatically be eliminated
in the process
Decision Dependency Matrices


Bhushan N., Decision Dependency Matrices, 8th
International DSM Conference, Seattle, US, Oct 2006
Decision Point has Set of Alternatives
Each Decision Point
has Set of
Alternatives, Criteria
and Goals
GOAL (s)
CRITERIA ALTERNATIVES
ACTORS / DECISION MAKERS
Existing Decision Theory
Focuses on a Single Decision Point


Does Not Consider
Dependency of other/past decisions on the existing
decision situation
Dependency of existing decision on other/future decisions
GOAL (s)
CRITERIA
ALTERNATIVES
ACTORS / DECISION MAKERS
Rank Orders each
Alternative with respect
to each criteria and also
with respect to each other
on the basis of contextual
definition of VALUE
Decisions Depend upon Decisions
Decisions Depend upon other decisions in Space
and Time
Decision Map- Decision Points (DP) in space time
(Nine-Windows Approach*)
1
2 6
5
4
3
7
8
9
11
10
TIME
PAST PRESENT FUTURE
SYSTEM
SUPER
SYSTEM
SUB
SYSTEM
* Mann D, Hands on Systematic Innovation,
Creax Press, 2002
Existing Approaches for Network of Decisions
Typically the problems addressed are Chain of
Decisions (e.g. Bullwhip Effect defined in the MITs
Beer Game) and Methodologies include

Queuing Theory for Network of Queues

Bayesian Belief Networks for probabilistic
reordering of inferences from evidences in a
dynamic situation

Modeling and Simulation System Dynamics

(Colored) Petri Nets

Decision Chains (Qualitative Analysis)
Complex Web of Decisions
Network of Decisions has not been addressed
explicitly and comprehensively in literature

The Increasing Global Complexity (mainly due to
multi-dimensional interdependencies) demands a
comprehensive methodology to surface decision
complexity as it plays out in time and space

Creating a visibility about the impact of each
decision (read each choice) on other decisions is
the need of the Globalizing world
DECISION DEPENDENCY MATRICES
We propose a new class of DSM called
Decision Dependency Matrix (DDM).

Def: DDM is a binary square matrix representation of
interdependencies of all known past, present, future, super-system,
system and subsystem decision points in a decision map.

DDMs can estimate the decision complexity of the system
Each DDM has an associated Alternatives Dependency Matrix that
is used for choosing the right alternative at a given decision point in
a Space-Time Decision Map
Creating a Decision Dependency Matrix
STEP 1: Create a Space-time Decision Map
1
2 6
5
4
3
7
8
9
11
10
TIME
PAST PRESENT FUTURE
SYSTEM
SUPER
SYSTEM
SUB
SYSTEM
Creating a Decision Dependency Matrix
STEP 2: Identify Decision Dependencies
1
2 6
5
4
3
7
8
9
11
10
TIME
PAST PRESENT FUTURE
SYSTEM
SUPER
SYSTEM
SUB
SYSTEM
DDM Time Dependency Representation
Decision
Points
DP1 DP2 DP3 DP4 DP5 DP6 DP7 DP8 DP9 DP10 DP11
DP1 1 1
DP2 1 1 1
DP3 1 1
DP4 1
DP5 1 1
DP6 1 1 1 1 1 1 1
DP7 1 1 1
DP8 1 1
DP9 1 1
DP10 1 1 1
DP11 1 1 1
DDM can give a measure of how much the ...

Past depends upon Past

Past depends upon Present

Past depends upon Future

Present depends upon past

Present depends upon Present

Present depends upon Future

Future depends upon Past

Future depends upon Present

Future depends upon Future
DDM Time Dependency Representation
PAST
PRESENT FUTURE
Second Order
Dependencies
First Order
Dependencies
Third Order
Dependencies
P
A
S
T

P
R
E
S
E
N
T

F
U
T
U
R
E

Decision
Points
DP1 DP2 DP3 DP4 DP5 DP6
DP
7 DP8 DP9 DP10 DP11
DP1 1 1
DP2 1 1 1
DP3 1 1
DP4 1
DP5 1 1
DP6 1 1 1 1 1 1 1
DP7 1 1 1
DP8 1 1
DP9 1 1
DP10 1 1 1
DP11 1 1 1
Creating the Alternatives Dependency Matrix
Let us consider a small example with 6 Decision Points
Decision Map
1
2
6
4 3
5
TIME
PAST PRESENT FUTURE
SYSTEM
SUPER
SYSTEM
SUB
SYSTEM
Alternatives and Values using MCDM
Decision
Point (DP)
Alternative Alternative Value
DP1
A11 0.45
A12 0.35
A13 0.20
DP2
A21 0.70
A22 0.15
A23 0.15
DP3
A31 0.50
A32 0.50
DP4
A41 0.30
A42 0.35
A43 0.35
DP5
A51 0.60
A52 0.40
DP6
A61 0.05
A62 0.50
A63 0.45
Alternatives Dependencies
Alternative Dependencies
(Quantitative Rating)
Explanation
Binding Synergy (BS) = (1.5)
If the independent Alternative has been chosen,
the dependent Alternative will have to be chosen
and together they give move value compared to
individual Alternatives.
Binding Degradation (BD) = (0.5)
If the independent Alternative has been chosen,
the dependent Alternative will have to be chosen
and together they give less value compared to
individual Alternatives.
Binding (B) = (1.0)
If the independent Alternative has been chosen,
the dependent Alternative will have to be
chosen.
Synergy (S) = (1.25)
Together they give move value compared to
individual.
Degradation (D) = (0.75)
Together they degrade the value of each other
Conflict (C) = (-1)
Only one of Alternatives can be chosen from the
pair
No Dependency (ND) = (0)
Alternatives do not directly depend upon each
other
The Algorithm for Alternative Dependency Value
Create a pair-wise comparison matrix of qualitative dependencies of
alternatives
Convert the qualitative dependencies to quantitative dependency
ratings to form Alternatives Dependency Matrix (ADM)
ADM is converted to a Direct Connection Matrix (DCM) using the
following rule if aij > 0 bij = 1 else bij = 0, where, aij is an element of
ADM and bij is the corresponding element of DCM
Alternative Dependency Value Matrix (ADVM) is created such that
dij = aij x bij x Vj
where Vj is the MCDM Value of the alternative Aj
The Alternative Dependency Value (ADV) is defined as the column sum
of ADVM for each alternative value.
Alternatives Dependency Matrix
Create Direct Connection Matrix & Alternative
Dependency Value Matrix
Alternative Dependency Value (ADV)
Path analysis on this matrix can lead to a detailed exercise in finding the optimal
path in alternatives matrix which maximize the Value ( this include the current
value and the value due to dependencies on other alternatives)
However the Alternative Dependency Value defined as above gives much quicker
and easier measure of relative value of the alternative taking into account the
current value and dependent value to create much clear visibility of the decision
map
DP Local Best
Decision w/o DDM
Using Connected
Alternative Value
Ranking
DP1 A11 A12 A13 A11 A12 A13
DP2 A21 A22 A23 A21 A22 A23
DP3 A31 A32 A31 A32
DP4 A41 A42 A43 A41 A42 A43
DP5 A51 A52 A51 A52
DP6 A61 A62 A63 A61 A62 A63
DDM compared to local MCDM based best decision
making
Decision Dependency
Matrices
Vs
Existing Local Best
Alternative using
MCDM
We propose use of Decision Dependency Matrices [5] (DDM) as
a framework for SBCE
Consider the development of a (group) decision
making system using wireless interface to a
complex simulation at the server side. Let Main
software modules be
1.Database Design
2.Client Side User Interface
3.Basic Report Generator
4.Complex Decision Simulation
5. User Interaction Model
6.Caching Algorithm
DB
SBCE Using DDM Mapping the Design Space
Client Side UI
Caching
User Interaction
Model
Database
Basic Report
Generator
Complex Decision
Simulation
SBCE Using DDM Generating Alternatives
Text UI
GUI
MM UI
Client Side UI
Caching
Client Side Caching
Pre-processed Cached
Both Side Cached
User Interaction
Model
Multi-Party
Event Based
Fixed Time-Slot
Database
Relational
Object Oriented
Basic Report
Generator
Fast Algorithm
Low Memory Footprint
Complex Decision
Simulation
Fast Algorithm
Hi Accuracy Algorithm
Low Memory Footprint
SBCE Using DDM Alternatives Dependency Matrices
SBCE Using DDM Integration by Intersection
The Elimination of Alternatives Using ADVs
Text UI
GUI
MM UI
Client Side UI
Caching
Client Side Caching
Pre-processed Cached
Both Side Cached
User Interaction
Model
Multi-Party
Event Based
Fixed Time-Slot
Database
Relational
Object Oriented
Basic Report
Generator
Fast Algorithm
Low Memory Footprint
Complex Decision
Simulation
Fast Algorithm
Hi Accuracy Algorithm
Low Memory Footprint
The Elimination of Alternatives Evolution of Optimal Design
Text UI
GUI
Client Side UI
Caching
Client Side Caching
Pre-processed Cached
User Interaction
Model
Event Based
Fixed Time-Slot
Database
Relational
Object Oriented
Basic Report
Generator
Fast Algorithm
Complex Decision
Simulation
Fast Algorithm
The Process Starts with Large Design Spaces
And Ends with an Optimal design with very less large
Iterations .At each stage the DDMs get shorter and
shorter.
SBCE Not much success outside Toyota
Although SBCE is known for many years and many research publications
have described the process, it has not been picked up by many companies
as principles are counter intuitive and in time and budget constrained
commercial organizations, it becomes very difficult to not to show one
design quickly so as to show the development project is on the right track to
the top management.

The information, decision, design and organization complexity also
increases as SBCE as a process requires strict discipline in following the
process by everyone as there is no central control, it creates a self-
organizing system.

Further, the SBCE principles dont describe specific methods, techniques,
tools or frameworks for execution. It is this important gap that TRIZ
(Theory of Inventive Problem Solving) can help in bridging for
the global product development scenarios.
TRIZ Inventive Problem Solving by Altshuller
Teoriya Resheniya Izobreatatelskikh Zadatch
1946 Patent
Officer in
Russian Navy
Discovered
patterns in
patents,
published paper.
Sent to Gulag
1954 released,
analysed
2,500,000
patents
Identified what
makes a
successful
patent
1956-1985 TRIZ
formulated
A Brief History of TRIZ
Worlds best ideas
in this situation
(Access)
A situation like mine
(Abstraction)
Access
World
Knowledge
Base
Abstraction
My specific solution My specific situation
Specific
Me / my company
Evaluate
Same Problems and Solutions appear again and again but in
different industries
There are a series of recognizable Technological Evolution paths
for all industries
Innovative solutions used theories outside their own area/industry
The most powerful solutions uncover and eliminate contradictions
Questions that TRIZ asks you
1. What is my Ideal Final Result How
can I achieve the functionality
without spending any resources or
cost
2. How the problem/situation/system
looks in time and space coordinates
3. Am I using all the existing
resources or potential resources to
the fullest
4. What is the main useful function I
need to deliver. What are various
ways in which I can deliver the
function
5. How others have solved the same
problem in the past
A
B
C
Tree
Seed
Forest Plain
DNA Fruit
Coal
Timber
Pie
Principles in the Contradiction Matrix
Parameter that gets worse
Recommended principles
Parameter to
improve
TRIZ - Contradiction Matrix Elements
1. Weight of moving object
2. Weight of stationary object
3. Length of moving object
4. Length of stationary object
5. Area of moving object
6. Area of stationary object
7. Volume of moving object
8. Volume of stationary object
9. Speed
10. Force
11. Tension, pressure
12. Shape
13. Stability of object
27. Reliability
28. Accuracy of measurement
29. Accuracy of manufacturing
30. Object affected harmful effects
31. Object generated side effects
32. Manufacturability
33. Convenience of use
34. Repairability
35. Adaptability
36. Complexity of device
37. Complexity of control
38. Level of automation
39. Productivity
14. Strength
15. Duration of action - moving object
16. Duration of action - stationary object
17. Temperature
18. Brightness
19. Use of energy by moving object
20. Use of energy by stationary object
21. Power
22. Waste of energy
23. Waste of substance
24. Loss of information
25. Waste of time
26. Amount of substance
1. Segmentation
2. Extraction
3. Local Quality
4. Asymmetry
5. Combination
6. Universality
7. Nested Doll
8. Counterweight
9. Prior Counter-Action
10. Prior Action
11. Prior Cushioning
12. Equi-potentiality
13. The Other Way Round
14. Spheroidality
15. Dynamics
16. Partial or Excessive Action
17. Another Dimension
18. Mechanical Vibration
19. Periodic Action
20. Continuity of Useful Action
21. Skipping
22. Blessing in Disguise
23. Feedback
24. Intermediary
25. Self-Service
26. Copying
27. Cheap/Short Living
28. Mechanics Substitution
29. Pneumatics and Hydraulics
30. Flexible Shells/Thin Films
31. Porous Materials
32. Colour Changes
33. Homogeneity
34. Discarding and Recovering
35. Parameter Changes
36. Phase Transitions
37. Thermal Expansion
38. Strong Oxidants
39. Inert Atmosphere
40. Composite Materials

4
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P
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p
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TRIZ A Brief Overview
TRIZ Tools for problem formulation
Focus on Function Main Useful function that product
needs to deliver to meet a customer/user need
Value is Function delivered to meet a user need
Ideal Final Result Value delivered at no cost or
resource expenditure and not harming the system in
anyway, alternatively the function is achieved on its
own self functioning system
How does the problem/situation looks in space and
time using what in literature is called the Nine
Windows Approach
How does the problem looks in depth and scope by
using Why-What Hierarchy
What are the resources available and what the
constraints in and around the problem
Function and attribute analysis
S-Curve analysis where the field is on the S curve
and where the product that needs to be designed for
customer needs should focus on
TRIZ Tools for problem solving
Technical Contradictions Inventive Principles
Physical Contradictions
Trends of Evolution
Resources Are all the resources utilized fully
even the harmful resources as well
Knowledge and effects the codified knowledge
of how others have achieved a particular function,
Ideal Final Result How to take the system closer
to IFR rather than focusing on current issues can
a method be devised to achieve IFR
S Fields and Standard solutions
Psychological Inertia tools that TRIZ has to take
the inventors mind away from the tunnels of core
competence that restricts exploration of other
fields.
Anticipatory Failure Determination (AFD) or
Subversion Analysis Inventing failures to create
robust designs
SBCE Steps Specific Actions TRIZ and Other tools
Mapping the
Design Space
(Functional Team
level)
Describe user needs
In case of multiple needs carry out
needs interdependency analysis
Find out key functions to be
performed
Function dependency analysis to
find out interdependencies
Can some high level functions
specific to strengths of different
teams be identified
Let each team explore the
specifications, needs, functions
independent of each other
Each team explore design tradeoffs
through simulations and their past
observations
Each team should come up with
their sets of different solutions with
in the functional and performance
needs of the product
Problem Formulation and Analysis
Ideal Final Result (IFR)
Why-what hierarchy
Nine windows
Dependency Structure Matrix
(DSM) [28]
Function/Attribute Analysis
System Complexity Estimator (SCE)
[4]
S curve analysis
Searching for Solutions
Contradictions Technical/Physical
Trends of evolution
SBCE Mapping the Design Space
SBCE Conceptual Robustness & Integration by Intersection
Striving for Conceptual
Robustness
(Functional Team level)
Design should remain
functional after variations in
its environment
Vulnerability of system to
changes in the environment
should be minimized
Modularized Design with
standard components
IFR
AFD/Subversion Analysis
Robust Inventive System
Design (RISD) [7]
DSM
Integration by Intersection
(System level)
How are the parts integrated
to meet at the point that will
be regarded best solution
Find out overlap of feasible
design spaces for each sub
component
Decisions about eliminating
the weak designs
Decision Dependency
Matrices (DDM) [5, 6]
Analytic Hierarchy Process
(AHP) [8, 14, 22]
Technical Contradictions
(TC)/ Inventive Principles
(IP)
SBCE Feasibility before commitment & Conflict Handling
Establish
Feasibility
before
Commitment
Multiple concepts developed using
prototyping simulation
The infeasible ones will be rejected
rest all will continue to be
developed
Decision
theoretic
principles [20,
21]
AHP
Closer to IFR
Conflict
Handling
Cooperative Conflict handling Which solution
is closer to IFR?
DDM
AHP
GPD Scenarios Value of TRIZ in SBCE
TRIZ with SBCE for
Inhouse Scenarios
0
0.2
0.4
0.6
0.8
Mapping the Design
Space
Striving for Conceptual
Robustness
Feasibility before
commitment
Integration by
Intersection
Conflict Handling
In-house Near-shoring In-house Off-shoring
TRIZ with SBCE for
Collaborated Scenarios
0
0.2
0.4
0.6
0.8
Mapping the Design
Space
Striving for Conceptual
Robustness
Feasibility before
commitment
Integration by
Intersection
Conflict Handling
Collaborated Near-shoring Collaborated Off-shoring
C
o
m
p
l
e
x
i
t
y
Time
TRIZ relevance compared to other methods in GPD Scenarios using SBCE
GPD
Scenarios
Mapping the
Design Space
Striving for
Conceptual
Robustness
Feasibility
before
commitment
Integration
by
Intersection
Conflict
Handlin
g
Outsourced
Near-
shoring
Medium
High
Low Medium Low
Outsourced
Off-shoring
Medium
High
Low Low Low
In-house
Near-
shoring
High High
Low Medium Low
In-house
Off-shoring
Medium
High
Low Low Low
Collaborated
Near-
shoring
High High
Low Medium Low
Collaborated
Off-
shoring
Medium
High
Low Low Low
Set Based Concurrent Engineering
95
Conclusions
96
Three winners in the new world Decision Engineering, Lean and TRIZ
Decision Engineering and Innovative Problem Solving is the need
Enterprises need integrated frameworks leveraging the advances made in
Innovation, problem solving and decision engineering space
In the Globalization scenarios Old methods are failing
Global Complexity is increasing Need for New ways of doing thing
Decision Engineering and Problem Solving in a Complex
World
Frameworks described here can be used at least some of the techniques
definitely can be explored