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©Kanji Ueda
Value Creation and Decision Making toward Sustainable Society
Kanji UedaVice President, The National Institute of Advanced Industrial Science and Technology
Emeritus Professor, The University of Tokyo
Manufuture 2009, Göteborg
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©Kanji Ueda
Outline of the National Institute ofAdvanced Industrial Science and Technology
AIST Network throughout Japan and networks throughout the world
More than 8,000 researchers including about 5,000 visiting researchers
The largest National Institute in Japan
Active International Partnerships
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Developmentand Application
Acquisitionand Clarificationof Knowledge
Type-IBasic Research
Basic Researchfor Science & Technology
Research forLong-Term
Government Policies
Advanced Research
Geological Surveyand AppliedGeoscience
Metrology andMeasurement
Science
Life Science andBiotechnology
Environmentand Energy
Nanotechnology,Materials andManufacturing
InformationTechnology
and ElectronicsUniting and
Application ofKnowledge
Type-IIBasic Research
Six specialized fields; • Life Science and Biotechnology • Information Technology and Electronics• Nanotechnology, Materials and Manufacturing• Environment and Energy• Metrology and Measurement Science• Geological Survey and Applied Geoscience
Integrated research system with different scientific backgrounds to participate in scenario-oriented research projects.
AIST Organization and Specified Research Fields
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Value and Value CreationThe value of an artifact is not determined solely by its functionality.
Globalization brings two conflicting goals:1.Price competition >> Commoditization of products 2.Value competition >> Service‐oriented manufacturing
Information networking changes the values and lifestyles of consumers: 1.Diversification >> Long tail phenomenon and niche markets2.Homogenization >> de facto standards, network externality
Social complexity and instability: global networking has gradually come to entail negative aspects. >> large‐scale accidents of information systems
Sustainable development: Maintaining sustainability often creates a dilemmabetween values of a whole society and values of individuals.
We must rethink values from relations among humans, artifacts, and society as decision-making problems.
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History of Axiology
K. Ueda et al: CIRP Annals - Manufacturing Technology 58 (2009) 681–700
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Historical approaches to value
Two Origins: •Plato(Idea), Aristotle: Absolute value >> Idealism, Realism •Epicurus(Hedonism): Natural value >> Utilitarianism (J. Bentham, J. Mill) , EgoismPhilosophy (in the 17th century):•Descartes(Cartesian dualism) : Objective value >> Mechanical Materialism•J. Locke, F. Bacon, D. Hume >> Empiricism Philosophy (in the 18th -19th century):•I. Kant (Epistemology): Subjective value >> H. Rickert, G. Hegel, E. HusserlPhilosophy (in the 20th century):•F. Nietzsche, F. Saussure, J.P. Sartre, L. Wittgenstein, Levi-Strauss, M. Polanyi :Metaknowledge valuePsychology:S. Freud, B. Skinner, J. Piaget , A. Maslow: Psychological valueEconomics:•F. Quesnay, A. Smith, K Marx (Classical economics): Absolute/Objective Economic value•C. Menger, V. Pareto, J. Neumann(Neo-Classocal economics): Relative Economic value•D. Kahneman , A. Tversky (Behavioral economics) : Subjective Economic valueEngineering:•F.W. Taylor, C. Peirce’s, , H. Simon, H. Yoshikawa: Pragmatic valueEcology:•Club of Rome, UN, ICSU: Environmental value
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Value and sustainability
Value for Whole Society (“value as it should be”) VS.
Value for Individuals (“values as they are”)
•To resolve this dilemma, greater attention must be devoted to the mechanism of human value judgments and social value systems including market mechanisms. Moreover, this is not an analysis problem but a synthesis problem. •For this purpose, we should integrate values such as ecological value, pragmaticvalue, economic value, psychological value and meta-knowledge value.
Sustainability is the most recent topic of axiology and was originally raisedas a social issue or an environmental issue. (The Club of Rome, 1972, International Council for Science Union (ICSU) , 2002)
To realize sustainable society, we must solve the dilemma between two conflicting values.
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From analysis of existing value to value creation
Real worldComplex andDynamic
Real worldComplex andDynamic
Value Creation Model
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Sustainability, Sustainable Development and Sustainable ManufacturingSustainability: In an ecological context, sustainability can be defined as thecapacity of ecosystems to maintain necessary processes and functions and to retain biological diversity without impoverishment.
According to Seliger(2007), sustainability is directed to enhancing human living standards while improving the availability of natural resources and ecosystems for future generations.
Sustainable Development: The World Commission on Environment and Development (WCED) declared that “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
Sustainable Manufacturing: Jovane et al. (2008) deeply discussed competitive sustainable manufacturing (CSM) as supportive of sustainable development. The CIRP can play a relevant role at strategic, scientific and technological levels for the coming global technological and industrial revolution: CSM.
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Sustainable Manufacturing
(Jovane, F, et al., 2008, The incoming global technological and industrial revolution towards competitive sustainable manufacturing, CIRP Annals, 57(2), 641-659.)
Fundamentals of sustainable development
Pursuing CSM: referencemodel for proactive action.
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Sustainable Society
Sustainable decision-making.
Sustainable Society: A society in which both the overall purpose and individual happiness can be achieved concurrently through decision-making among various stakeholders.
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Approaches
Transdisciplinary approaches to values
Human Sciences(psychology, medical science,
sociology)
Engineering(IT, manufacturing,
Data mining)
Economic Sciences(economics, marketing,
management)
Transdisciplinary Sciences•Sustainability •Service Engineering•Lifecycle Engineering•Healthcare Science•Gerontology•Co-creation Engineering……
Converging technologies•The US Government refers to convergence as the integration of Nanotechnology, Biotechnology, Information Technology and Cognitive Science (NBIC) •The European Commission proposed Converging Technologies for the European Knowledge Society (CTEKS)•Jovane, Westkämper and Williams (2008) discussed promising technologies for sustainable manufacturing and propose the generic model of ManuFuture, Vision 2020 and the Strategic Research Agenda
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Emergent synthesis approaches
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• Emergent synthesis : system synthesis methodology based on the concept of emergence.
• Emergence: a global order of structure expressing new function is formed through bi‐directional dynamic processes.
Local interaction
Global behavior
Bottom‐up
Top‐down
System
environment
purpose
(a) Generation of global order from local interaction among elements
(b) Feedback of global behavior as environment of local elements
(c) Global order expressing new function is formed
Concept of emergence ‐ From Local Simplicity to Global Complexity ‐
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Class l: Problem with complete description:If the information concerning the environment and specification are wholly given, then the problem is completely described. However, it is often difficult to find an optimal solution. Optimization Strategy
Class II: Problem with incomplete environment description:The specification is complete, but the information on the environment is incomplete. Since the problem is not wholly described now, it is difficult to cope with the dynamic properties of the unknown environment. Adaptation Strategy
Class III: Problem with incomplete specification:Not only the environment description but also the specification are incomplete. The problem solving, therefore, has to start with an ambiguous purpose, and the human interaction becomes significant. Co-creation Strategy
Classification of Emergent Synthesis Problempu rp ose
environm en t
pu rp ose
u nd ete rmined sy stem fu nction fo
Q - 1
e
f o
inv ers e pr ob lemstructu re
Q
s
f
d ir ect p roblem
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Value co-creation among systems
Systems of Society Systems of Humans
Systems of Artifacts
EconomyPoliticsPublicCultureGroup
Language/SymbolCognition/ActionModalityBrain/NeuronGenome
DesignManufacturingUtilizationProduct LifecycleNetworks
ValueCo-Creation
price
cost
← utility function satisfaction
Isolated systems cannot create value!
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Co-creative Decision Making
Model of Co-creative Decision Making
Decision making system:・ consists of multiple agents, each of
which has its own purpose・ achieves its purpose as a whole・ determines a feasible solution・ under a certain environment
However, often・ environmental is unpredictable・ purpose is ambiguous・ agent’s behavior is bounded rational・ less information gives better results
Therefore,Co-creativeDecision Making under incomplete information is essential
environment
agents(human, artifact, organization…) purpose
actionsolution
Co-creation is “emergent process” to create an effective solution, heretofore unattained by an independently- acting agents, as a whole system with interaction among acting agents.
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P
P/S
E
Rinformation
providing
PP/S
E
R
PP/S
E
RValue co‐creation
Class I Value: Providing Value ModelProduct/Service provider and its receiver are defined independently. Their values (objectives), and environments are clear. Model can be described completely with a closed system. Optimization strategy is essential.
Class II Value: Adaptive Value ModelObjective of product/service receiver is defined completely, however, environment is changing and not predictable. Therefore, model is to be an opened system. Adaptive strategy is essential.
Class III Value: Co-creative Value ModelObjective of product/service receiver is uncertain even for itself, so that the provider and receiver cannot be separable each other. Value-Co-creation by the provider and receiver is essential.
adaptation
Co‐creation
P
R
EP/S
provider
Receiver
environment
Product/service
information
P,R: agent self-organizing internal structureE: changing with internal structureP/S for Class II and III: required self-organizing
internal structure
information
prod
uct
service
Value Creation Models
Classification of value creation.
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Research Interests in Study of Service
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1995
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Complexity
GPS
Optimization
Mobility
Adaptation
Agent based
Innovation
Cognitive
Sustainable orSustainabilityPersonality
Recommendation
Large scale data
IC Card
Num
ber o
f Arti
cles
Articles including some technical keywords co-occurring with “service”.
Manufacturing industries must now confront how to expand their activities into service businesses to increase the value of their products. In contrast, service industries are expected to increase their productivity because many existing services are thought to be provided less efficiently than manufactured products.
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Value Creation in ServicesIn case I, 200 customers use the service. In case II, although the same service can be selected, the producer’s profit is less than that of case I, according to the decrease of the number of the service users (average approx. 180). However, the customers’ averaged profit is higher than in case I, relating to changes of each customer’s reservation value. In case III, the total profit of the producer and customers is highest of all the cases (average users are approx. 193). This occurs due to the increased value perception by the customers because of the network externalities.
0200400600800
10001200
Case I Case II Case III
Producer's ProfitCustomers' ProfitTotal Profit
Averaged Producer’s Profit, Consumers’ Profit and their Total Profit in Value Creation Models
•Ueda, K., Kito, T., and Takenaka, T., 2008, Modelling of Value Creation Based on Emergent Synthesis. CIRP Annals,57/1:473–476.
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•DNA-type:genetic information, evolving through generations.
•BN-type: individually learned information, acquired during lifetime of an organism
BMS: Biological Manufacturing System
BMS is next generation manufacturing system which dynamically adapts to non-predeterministic changes in both internal and external environments based on biologically-inspired ideas such as self-recognition, self-organization, adaptation and evolution. BMS covers total product life cycle, dealing with complexity in whole process of manufacturing activities from planning to disposal. (1987 K. Ueda)
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Real world(incomplete conditions)
Human being(bounded-rational)
System(flexible, robust)
Agents’ bounded rationality might have Positive aspects to its use!
Decision makingSystem goal:To realize efficient production
How to behave?
Environment surrounding systemRequirements for system
Incompleteconditionsconsumer
workerdesigner
robot machine
Manufacturing system
Economic environment
Collective decision making that creates an effective solution,heretofore unattained by independently-acting agents, as a whole system that allows interaction among acting agents, for synthesis of an artifact.
Flexibility, Optimality < Robustness,
Adaptively
Co-Creative Decision Making
Co-Creative Decision Making by Introducing Bounded-Rational Agents (T. Kito, K. Ueda)
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(Change the number of bounded-rational ants)
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限定合理的な蟻の数
採餌
所要
時間
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Exe
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- The system performance was improved by introducing bounded-rational ants.
- A differentiation of roles emerged: rational ants carries food bounded-rational ant searches for new feeding stations
Simulation Results
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Sustainable Manufacturing
Diversified requirements necessary for sustainability -Design components and solutions –- (H. Yoshikawa, Former President of AIST 2008).
Suppression of Climate Change
Conservation of bio- diversity
Sanitation
Control of chemical risk
Energy security
Drinking water security
Food security
Peace governance
Disaster mitigationEradication of poverty
Preventive medicine
Suppression of pollutionWaste minimization
Sustainable services
ElementCellMoleculeAtom
PartyOrganizationCorporationClub
IndividualFamilyCouplePerson
SocietyWorld*StateCommunity
Local Global
Range of problem = Design solution
H
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(*In case of human)
Human security
Conservation of minerals
Nuclear Non-penetration
Sustainable manufacturing
Nation
Hie
rarc
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= D
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com
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nt
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HY
Related Researches for Sustainable Industry in AIST for Minimal Manufacturing and Maximal servicing (H. Yoshikawa)
Manufacturing
InverseManufacturing
UseInverse Use
Compact Chemistry
Security system
Biomass technology
Earth Science
Sustainable design
Nanotechnology
Bio informatics
Grid technology
Bio remedying
Green sustainability chemistry
RoboticsSustainable material
Environmental controlMetrology
BiotechnologyEnergy source technology
Energy supply systems
Novel processing
Artificial intelligenceBrain scienceHuman stressHuman science
Digital human
PhotonicsQuantum electronics
Risk managementComputational
science
Design theory
Sustainability metrics
Digital manufacturing
Design for manufacturing
Facility design
Service science
Renewable energy
Design offunctionality
Implementation offunctionality
Extraction of functionality
Dissolution offunctionality
Maximal servicing
Min
imal
Man
ufac
turin
g
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Concluding remarks
■Historically, values have been studied from philosophical, ethical, economical, psychological, and technological viewpoints. Values can be classified by absoluteness, objectivity, and subjectivity.
■However, the current problems of values confronting us are apparently new problems; they are not analysis problems but synthesis problems. The problem of sustainability is expected to be a decision-making problem in a society; discrepancies between overall purposes and individual happiness often present a dilemma structure. .
■In the real world, manufacturing industries must now confront how to expand their activities into service businesses to increase the value of their products. In contrast, service industries are expected to increase their productivity. The integration of both industries is needed from the viewpoint of value creation toward a sustainable society.
■Co-creation is a promising concept to integrate values of industries and those of consumers.
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Thank you very much for your attention.
Cool Analysis, but Hot Synthesis!