cochrane.org.ukca-global.org

COCHRANE a s s o c i a t e s

Peter Cochrane

The Curse of Optimization Future sustainability, technology, industry and society

Wednesday, 6 November 13

In a

connectedworld

of

f i n i t eresources

a stove-piped

V i e wis

dangerousWednesday, 6 November 13

Optimizing by € € € € aloneleads to brittleness andinstability often with severe ecologicaland socialdamage

Wednesday, 6 November 13

Today’s financial systems only produce one result

Countries, companies & economies

that look like thisare short lived

Wednesday, 6 November 13

In the long term this is fundamentally impossible... . . . y o u c an ’ t have it all at the same time!

Wednesday, 6 November 13

This is what business schools teach budding managers, butit is incomplete, andit is wrong!

Wednesday, 6 November 13

Brittleness

This is what business schools teach budding managers, butit is incomplete, andit is wrong!

Wednesday, 6 November 13

Brittleness

Cost of

OwnershipThis is what business schools

teach budding managers, butit is incomplete, andit is wrong!

Wednesday, 6 November 13

η

€ € €

Efficiency𝓷

Efficiency - far more sophisticated than ripping out cost or sweating assets

Wednesday, 6 November 13

η

Failure free operating cost with efficiency f1(𝓷)

€ € €

Efficiency𝓷

Efficiency - far more sophisticated than ripping out cost or sweating assets

Wednesday, 6 November 13

η

Failure free operating cost with efficiency f1(𝓷)

Failure cost with efficiency f2(𝓷)

€ € €

Efficiency𝓷

Efficiency - far more sophisticated than ripping out cost or sweating assets

Wednesday, 6 November 13

η

Optimum cost efficiency is

at the point (𝓷) where:

Failure free operating cost with efficiency f1(𝓷)

Failure cost with efficiency f2(𝓷)

€ € €

Efficiency𝓷

Efficiency - far more sophisticated than ripping out cost or sweating assets

Wednesday, 6 November 13

η

Optimum cost efficiency is

at the point (𝓷) where:

Failure free operating cost with efficiency f1(𝓷)

Failure cost with efficiency f2(𝓷)

€ € €

Efficiency𝓷

f1’(𝓷) + f2’(𝓷) = 0

Efficiency - far more sophisticated than ripping out cost or sweating assets

Wednesday, 6 November 13

η

Optimum cost efficiency is

at the point (𝓷) where:

Failure free operating cost with efficiency f1(𝓷)

Failure cost with efficiency f2(𝓷)

€ € €

Efficiency𝓷

f1’(𝓷) + f2’(𝓷) = 0

For the specific exponential case:

Efficiency - far more sophisticated than ripping out cost or sweating assets

Wednesday, 6 November 13

η

Optimum cost efficiency is

at the point (𝓷) where:

Failure free operating cost with efficiency f1(𝓷)

Failure cost with efficiency f2(𝓷)

€ € €

Efficiency𝓷

f1’(𝓷) + f2’(𝓷) = 0

For the specific exponential case:

C = Aexp(-a.𝓷) + Bexp(b.𝓷)

Efficiency - far more sophisticated than ripping out cost or sweating assets

Wednesday, 6 November 13

η

Optimum cost efficiency is

at the point (𝓷) where:

Failure free operating cost with efficiency f1(𝓷)

Failure cost with efficiency f2(𝓷)

€ € €

Efficiency𝓷

f1’(𝓷) + f2’(𝓷) = 0

For the specific exponential case:

C = Aexp(-a.𝓷) + Bexp(b.𝓷)

The optimum operating efficiency is found to be:

Efficiency - far more sophisticated than ripping out cost or sweating assets

Wednesday, 6 November 13

η

Optimum cost efficiency is

at the point (𝓷) where:

Failure free operating cost with efficiency f1(𝓷)

Failure cost with efficiency f2(𝓷)

€ € €

Efficiency𝓷

f1’(𝓷) + f2’(𝓷) = 0

For the specific exponential case:

C = Aexp(-a.𝓷) + Bexp(b.𝓷)

𝓷o = b - a__1 loge Aa

Bb_

The optimum operating efficiency is found to be:

Efficiency - far more sophisticated than ripping out cost or sweating assets

Wednesday, 6 November 13

The worst

case

Wednesday, 6 November 13

The worst

case

Only humans optimize...

Mother Nature goes for good enough....

...and in doing so achieves sustainablerelationships....a symbiosis....

Wednesday, 6 November 13

€ € € €

Society

Ecology

The minimumdecision set

Wednesday, 6 November 13

€ € € €

Society

Ecology

The minimumdecision set

tec

hn

olo

gy

Wednesday, 6 November 13

Even more fundamental to all this is the advance and adoption of new technologythat is unpredicted/not fully understood

Wednesday, 6 November 13

old processes and industries

Susta

inabil

ity is

impo

ssible

by op

timizi

ng

Wednesday, 6 November 13

The Future

Wednesday, 6 November 13

The Future PrintingInstructing

NetworkingCollaboratingProgrammingRepurposing

RecyclingReusing

Bio Nano

AI, ALITC

Wednesday, 6 November 13

Wednesday, 6 November 13

Machines are the biggest communicators

on the Planet

They dominate manufacture and production and are moving into design and general knowledge,

modeling and decision support

Wednesday, 6 November 13

even more than we do !

They need The Cloud

Wednesday, 6 November 13

The Internet cannot scale to 9Bn people

and over 50Bn machines on

line, but Clouds

can

Wednesday, 6 November 13

We are increasingly defeated by complexity,

but our machines are not !

Wednesday, 6 November 13

We are increasingly defeated by complexity,

but our machines are notNow outgunning humans on general and specific knowledge

Wednesday, 6 November 13

Ha l f L i f e o f Knowledge

Physics~13 yrs

Medical~ 4 yrs

Economics~ 9 yrs

Software~ 4 yrs

Marine Bio~ 2 yrs

Wednesday, 6 November 13

ITC is vital to our symbiosis

Material Technology the biggest game changer for industry and sustainability

Wednesday, 6 November 13

Thank You

ca-global.orgcochrane.org.uk

COCHRANE a s s o c i a t e s

Wednesday, 6 November 13