Socially Constructing Warships — Emergence, growth & senescence of a knowledge-intensive complex adaptive system

William P. Hall

President Kororoit Institute Proponents and Supporters Assoc., Inc. - http://kororoit.org Documentation & Knowledge Management Systems Analyst (Ret.)

[email protected] http://www.orgs-evolution-knowledge.net

Access my research papers from Google Citations

Melbourne Emergence, 11 June 2015 Tenix Defence’s $7 BN ANZAC Ship Project was the most successful Defence Project in Australian History

 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 changes affecting everything – Stringently fixed price contract & delivery schedule – Required to achieve 80% /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 2 – Failing to learn from Australia’s most successful defence project ANZAC Frigates designed for modular construction

 Modules can be built anywhere appropriate standards and arrangements exist

 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 STEPS 1. Steel plate stockyard 2. Blast & prime plate 3. NC plate cutting 4. Fabricate panels b 5. Assemble units & blocks 6. Blast/paint units & blocks d 7. Assemble modules & pre- outfit them 8. Erect modules on slipway b 8a. Receive off-site modules 9. Outfit & set to work Engineering 10.Underwater & set to work — a a. Warehouse (components & Admin material receive & store) e b. Bar fabrication c c. Machine shop

Staff d. Pipe shop 4 parking e. Kitting Receiving modules, erecting hull

Modules built in NZ for NZ ships

5 Erecting modules & launching ship

Click main picture for video

Note transporter under module to left

Note open structure to facilitate installation of 2 6 cruise diesels, LM 2500 gas turbine and main gear box Launching!

7 Emergence & senescence of an ANZAC ship Lifecycle of a major engineering project

RFT AND BIDS CONCEPT STUDIES  SYSTEM REQUIREMENTS PRELIM DESIGN STUDIES HIGH LEVEL SPECIFICATIONS  FUNCTIONAL ANALYSIS SYSTEMS & AND ENG DESIGN REQUIREMENTS ALLOCATION LOWER LEVEL SPECS 

SYNTHESIS, ANALYSIS, TRADE-OFF STUDIES AND DESIGN OPTIMISATION The product emerges In Service from a complex web SYSTEM TEST AND EVALUATION Support of millions of decisions DESIGN VALIDATION (ISS)

CONSTRUCTION / PRODUCTION 

 DEPLOYMENT AND SUPPORT

 RETIREMENT & PHASEOUT

Mfg Resource Planing (MRP) MAINTENANCE MANAGEMENT ​ 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 10 knowledge

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  ‖ Weld panels into “unit”  in core of star  [ Blast & paint unit ]  Ejected by supernova as cosmic dust  ‖ Weld units into “module”   Captured in formation of planet  [ ‖ fit & install other components Earth and equipment into module]  Precipitated as concentrated ore by  ‖ Erect and weld module with geological processes other modules into ship structure   Controlled application of energy as  [ Complete ship fit out, set to work () to mine and refine ore work]   Smelt and forge iron into steel  [ Deliver doco packages & train plate by via complex machinery crew]   Transport plate from foundry to  [ Sea trials & commission ship into steel yard in Williamstown  service  ]   Blast and prime plate following  [ In operational service] production design & schedule ()    Maintain, change & refit   cut plate into flat “parts”   Entropic senescence, decommission   Shape, fit & weld parts into 3D  Scrapping & recycling “panel” in parallel (‖) with many 11 other parts 

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

OVERSIMPLIFIED! 1. Read RFT / individual line items 2. Collect source data/docs 3. Decide response for each line item 4. Assemble required DIDs 5. Author paragraphs responding to each requirement 6. Review/rewrite many times 7. Assemble into documents 8. Review/rewrite many times 9. Assemble documents into system- level Annexes 10.Preliminary design & costing 11. Print files and assemble review volumes 12.Management review & edit 13.Final cross check against RFT and proofing 12 14.Assemble & deliver formal bid

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 OBSERVE ORIENT DECIDE ACT  Inseparability of (Results of Test) (Hypothesis) (Test) knowledge & life OBSERVATION GUIDANCE AND CONTROL DNA PARADIGM CULTURE PARADIGM EXTERNAL GENETIC INFORMATION PARADIGMS  John Boyd’s OODA HERITAGE PROCESSES – Includes choice,

decision, and INPUT O ANALYSIS O SYNTHESIS D A wilful action CHANGING CIRCUMSTANCES

MEMORY OF HISTORY UNFOLDING UNFOLDING INTERACTION ENVIRONMENTAL WITH EXTERNAL RESULTS OF ENVIRONMENT 14 ACTIONS Non-equilibrium thermodyanmics drives emergence of knowledge-based living systems

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

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

...... Symbolic . knowledge . . Embodied . . Autonomy . . . knowledge . . . Autocatalytic

. metabolism

Exergy Material source cycles

Entropy  Flux along the focal level  sink Slide 16 Varela et al. (1974) define life as autopoiesis Reliable 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 17 What makes a system living?

 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 demonstrated

by self-producing cellular automata HIGHER LEVEL SYSTEM / ENVIRONMENT

emerging in toy universes Constraints and boundaries, regulations determine what is physically allowable

The entity's history and present circumstances

Energy (exergy) Entropy/Waste

Materials Gosper’s Glider Gun Processes Products

cycles in 14 steps Component recruitment Departures

Gliders – cycle in 4 steps Actions Rule: Observations The entity's imperatives and goals Live cell with 2 or 3 live neighbours lives Dead cell with 3 live neighbours lives "universal" laws governing component interactions determine physical capabilities 18 All other live cells die SUBSYSTEMS / COMPONENTS Autopoiesis may develop at several levels of hierarchical organization

19 Economic organizations may be autopoietic

20 Information transformations in the living entity through time

World 2 Living system Cell Multicellular organism Classification Social organisation State

World 1 Memory of history Semantic Observations processing to (data) form knowledge

Meaning

Perturbations Anticipate, predict, propose Intelligence

Related Hall, W.P., Else, S., Martin, C., Philp, W. 2011. Time-based information frameworks for valuing knowledge: maintaining strategic Slide 21 knowledge. Kororoit Institute Working Papers No. 1: 1-28. (OASIS Seminar Presentation, Department of Information An "attractor basin" Systems, University of Melbourne, 27 July 2007) Another view

World 1 World 2 Medium/ Autopoietic system Environment Observation Memory World State 1 Classification Perturbation Transduction Synthesis Time

Evaluation

Decide! Processing Paradigm (may include W3)

World 3 Assemble Response Observed internal changes Iterate

World State 2 Effect Execute internal changes

Effect action Slide 22 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

Tenix’s systems for ANZAC Frigatges

Covers engineering drawings, tech data & documentation, production planning & history, 24 maintenance history, etc. 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 25 requirements Emergence and disintegration of the shipbuilder as an autopoietic entity Three generations of Sydney-based family companies as “owners”

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 27 – 2014 last infrastructure maintenance assets sold to Downer EDI A knowledge-based social network beginning to form an organization

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.

"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 28 will be valuable in addressing organizational needs Coalescence of a community of interest (CoI) around a "human attractor"

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 29 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

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. 30 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

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. 31 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

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 32 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 33 (other industry, Navy, overseas) 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 34  Large component of self- and emergent-management 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 35  Major liquidated damages for schedule milestone breaches 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 36 – Internal solutions and innovation / Locally managed R&D 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 38 imperatives

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 42 analysis & training 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