Strategic e-Business Solutions, Inc.

Delivering innovative solutions to business

challenges that impede performance

INCOSE Washington DC
Meeting Presentation

“Standard Approach to
Trade Studies”
Art Felix
Lean Six Sigma Black Belt
April 10, 2007
1 ©2006 Strategic e-Business Solutions, Inc.
 Standard Approach to Trade Studies

“Informed decision-making comes from a

long tradition of guessing and then blaming
others for inadequate results.”

Scott Adams

2 ©2006 Strategic e-Business Solutions, Inc.

 Standard Approach - Advantages

• Transform a subjective decision-making process to

a more objective decision-making process
• Advantages to a Standard Approach
• Understood with confidence.
• Repeated at a later date
• Remove blind dependence on commercially available decision
making packages
• Provide flexibility to accommodate informal decisions

3 ©2006 Strategic e-Business Solutions, Inc.

 Problems and Thoughts on Trade Studies

• Problems associated with previous Trade Studies

• Pre-designated winner
• Process used, or lack thereof
• Management involvement or lack thereof
• Criteria used and Alternatives evaluated are questioned
• Conflict in evaluation of Cost and Risk

• Additional thoughts on Trade Studies

• Who is the Trade Study customer?
• Documenting thinking process
• Varying complexity due to information/resources
• CAIV

4 ©2006 Strategic e-Business Solutions, Inc.

 Basic steps in previous Trade Studies

• Get a copy of a previously approved Trade Study and

duplicate the steps.
(or)

• Alternatives – use baseline if available

• Criteria – use costs and risk as tradable criteria
• Weighting – the criteria Summary Matrix Alternative A Alternative B Alternative C Alternative D
Cost $____ Cost $____ Cost $____ Cost $____

• Summary Matrix
Criteria Sub- Weighting Raw Weighted Raw Weighted Raw Weighted Raw Weighted
Criteria Score Score Score Score Score Score Score Score
Performance --- --- --- --- --- --- --- ---
speed 3.0
acceleration 3.0
payload 2.0

• Sensitivity Study
fuel consumption 1.0
ceiling 1.0
Reliability --- --- --- --- --- --- --- ---
MTBF 1.0
Safety --- --- --- --- --- --- --- ---
Safety 1.0
Logistics --- --- --- --- --- --- --- ---
Supply Lines 1.0
Spare Parts 1.0

(and add the eventual) TOTAL

Crew Training 2.0
--- #1 Score --- #2 Score --- #3 Score --- #4 Score

Sample Summary Matrix - Used to tabulate the weighted criteria scoring for each
Viable Alternative

• Customization – individual preferences and/or individual

Lessons Learned

5 ©2006 Strategic e-Business Solutions, Inc.

 Trade Studies – The Next Generation

• Re-use many of the same basic steps and summary matrix

• Add many of the Lessons Learned from previous Trade
Studies
• Define a phased approach with mandatory “Gate Reviews”
between phases
• Define roles and responsibilities for participants
• Define products from each phase to be used in the Trade
Study report

• Present six features that are paramount in this Standard

Approach to Trade Studies

Note: The desire is to enhance the existing methodology by

providing knowledge and information to the Decision
Making Authority

6 ©2006 Strategic e-Business Solutions, Inc.

 That Meets
Trade Study Process CMMI
(Framework and Structure) Level 3!!!!
1

4
Uncertainty / Lack
of Confidence

Trade Study Steps Trade Study Steps

Priorities/Weighting Priorities/Weighting
Sensitivity Study Sensitivity Study

Alternatives Alternatives 6
5 Cost Risk
Criteria Cost 2 Criteria 2 Risk –
Baseline – Benefit Baseline / Benefit
Summary Matrix chart Summary Matrix 3 chart
Optimum
Pros / Cons Pros / Cons Solution
Trade Study Subsets Trade Study Subsets

7 ©2006 Strategic e-Business Solutions, Inc.

 1. Framework and Structure (basic)

Program Development:
Requirements Design and Validation & Deployment
Definition Development Verification

Trade Study Development:

Phase I Phase II Phase III Phase IV
Initiate the Develop the Evaluate the Course of
Trade Study Summary Matrix Results Action

wo e-p ive
eff an
s
mm lop trix

re- or r nat

ort
ns
gs

l
Re d de ary e
co ve Ma
nt eds

an mm te th

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tio
tin
s,

da
Cr iteria tive

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rk
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igh

Su alua

en
trix ary
)
we
Cr erna

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ate e

se ecu
ria ,
St rpos

Ma m m

Ev

Ex
Alt

Su
ite
Pu

Gate 1 Gate 2 Summary Gate 3

Review Review Matrix Review
Review

8 ©2006 Strategic e-Business Solutions, Inc.

 1. Framework and Structure (diagram)
Phase I Phase II Phase III Phase IV
1
Initiate Trade Study Develop Summary Matrix Evaluate Results Course of Action
Cost-Benefit
Trade Study

Assemble Summary Matrixes 5

Lead

- Purpose/Need Statement Risk-Benefit

- Program Plan Trade Study
Report
6

Alternatives a
Trade Study Team Recommendation
Alternative f Costs
grading Criteria-Baseline/Opt b
Baseline/ d
Optimum solution Risk
Trade Study

c
Assessment Priorities/Weighting
a
Team

Alternative g
Alternatives Alternative Grading d
3 scoring
Risk
Criteria Apply Mitigation e
Uncertainty
b weighting
2
f
Cost
Priorities/Weighting Uncertainty
g
c e 4 Issues / Risk Assessment
Concerns

Major

Item(s)
Action
Decision Making

Close
Authority

Gate 1 - Go-Ahead Trade

Item(s)
Action
Minor
Study
efforts
Gate 2(n) - Review Gate 3(n) Review

Release
Trade Study Report

- Purpose/Need (Statement) -Alternatives grades and scores - Cost-Benefit chart - Major /Minor action items
- Program Plan (Schedule, Resources) (Back-up information justifying) - Risk-Benefit chart - Updates (as required, spiral
- Trade Study Team - Uncertainty (for each criteria) - Risk Assessment development)
Products

- Alternatives (Complete =>Viable) - Apply weighting - Risk Mitigation - Trade Study Report
- Criteria (Definitions, Utility Curves)) - Costs - Issues / Concerns - add Lessons Learned
- Baseline/Optimum Solution(Definition) - Recommendation - add Action Item resolution
- Priorities/Weighting (methodology) - Summary Matrixes (Lower, Nominal
and Upper uncertainty values) - Gate 3(n) Minutes
- Gate 1 Minutes
- Gate 2(n) Minutes Trade Study process

9 ©2006 Strategic e-Business Solutions, Inc.

 2. Cost and Risk; 3. Baseline & Optimum

• Cost and Risk

• Loose importance as tradable criteria
• Revisited in final review (part of eventual customization)
• Proposition: Remove Cost and Risk as tradable criteria and
evaluate both in the Cost-Benefit and Risk-Benefit chart

Criteria (n) - Utility Curve

• Establish Baseline
and Optimum
Criteria Scoring

solution for each 8

7
Optimum Solution

tradable criteria 6
5
Baseline Solution
4
3
2
1

Min Alternative Grade Max

10 ©2006 Strategic e-Business Solutions, Inc.

 4. Uncertainty

• Identify uncertainty boundaries for each evaluation

criteria in the grading process
Criteria (n) - Utility Curve

9
Criteria Scoring

8 Maximum
7 Nominal
6
5
4
Minimum
3
2
1

Min Alternative Grade Max

Note: Do not forget to establish uncertainty boundaries

for the total costs of each alternative!
11 ©2006 Strategic e-Business Solutions, Inc.
 5. Cost-Benefit Chart

• Example:
(Least Desirable Quadrant)

(Acceptable Solution)

(Ideal Solution)

(Max possible Score)

(High Cost – Low Benefit) (High Cost – High Benefit)
High

Alternative B
Cost

(Maximum allowable costs) Alternative B

(Baseline Score)
Alternative A
Alternative D

Alternative C

Low (Low Cost – Low Benefit)

10% 20% 30% 40% 50% 60% 70% 80% 90%

Low
Benefit High

12 ©2006 Strategic e-Business Solutions, Inc.

 5. Cost-Benefit Chart (continued)

• Example:
(Least Desirable Quadrant)

(Max possible Score)

(High Cost – Low Benefit) (High Cost – High Benefit)
High

Alternative B
Cost

(Maximum allowable costs)

on
Ea
sy cisi
De e
cis r dD
ion Ha

(Baseline Score)

Low (Low Cost – Low Benefit)

Low
Benefit High

13 ©2006 Strategic e-Business Solutions, Inc.

 6. Risk-Benefit Chart

(Ideal Solution)
Risk Assessment 9

High
Risk 8
9
Probability

(High Risk - Bad)

8 7

7
6
6 Alternative D
Risk

(Low Risk - Good) 1 2 3 4 5 5

Alternative C
Severity
4

(Acceptable Solution)
3

Alternative A
2

Alternative B
1
Low
Risk 10% 20% 30% 40% 50% 60% 70% 80% 90%

Low Benefit High

14 ©2006 Strategic e-Business Solutions, Inc.

 Types or Subsets of Trade Studies

• Single Criterion • Single Criterion

Choice
SUBJECTIVE

• Pros/Cons • Pros/Cons (Unique and Common),

Trade Off Study Single
Single Criterion
Criterion

• Multiple • Multiple Criteria with priority,

Criteria Selection Pros/Cons
Pros/Cons (Unique
(Unique and
and Common)
Common)
• Pugh Controlled • Baseline / Optimum Solution, Multiple
Convergence Criteria with priority
• Relative Comparison • Baseline / Optimum Solution, Multiple
(Basic) Criteria with priority
OBJECTIVE

• Relative Comparison • Criteria Scoring, Criteria Weighting,

(Advanced) Sensitivity Study, Baseline / Optimum Solution,
Multiple Criteria with
with priority
priority

• Complete Trade Study • Uncertainty/Confidence, two-tier criteria,

Sensitivity
Sensitivity Study,
Study, Criteria Scoring, Criteria
Weighting, Baseline / Standard, Multiple Criteria

15 ©2006 Strategic e-Business Solutions, Inc.

 Trade Study Subsets/Types in Framework

1
Phase I Phase II Phase III Phase IV
Initiate Trade Study Develop Summary Matrix Evaluate Results Course of Action
Cost-Benefit
Trade Study

Assemble Summary Matrix(es) 5

Lead

- Purpose/Need Statement Risk-Benefit

- Program Plan Trade Study
Report
6

Alternatives a
Trade Study Team Recommendation
Alternative f Costs
grading
Baseline/
3 Optimum Risk
Trade Study

solution Assessment
a
Team

Alternatives g
Risk
Apply Mitigation
b weighting
2 2
f
Cost
Uncertainty
Uncertainty g
c e 4 Issues / Risk Assessment
4
Concerns

Major

Item(s)
Action
Decision Making

Close
Authority

Gate 1 - Go-Ahead Trade

Item(s)
Action
Minor
Study
efforts
Gate 2(n) - Review Gate 3(n) Review

Release
Trade Study Report

- Purpose/Need (Statement) - - Cost-Benefit chart - Major /Minor action items

- Program Plan (Schedule, Resources) - Risk-Benefit chart - Updates (as required, spiral
- Trade Study Team - Risk Assessment development)
Products

- Alternatives (Complete =>Viable) - - Risk Mitigation - Trade Study Report

- - - Issues / Concerns - add Lessons Learned
- - Costs - Recommendation - add Action Item resolution
-
- Summary Matrix - Gate 3(n) Minutes
- Gate 1 Minutes
- Gate 2 Minutes Trade Study Subsets process

16 ©2006 Strategic e-Business Solutions, Inc.

 Summary

• CMMI® Level III compliant – Decision Analysis and Problem

Resolution
• Six unique features are introduced to enhance Trade Studies
• 14th INCOSE International Symposium –
• Paper presentation directed to engineers
• 15th INCOSE International Symposium –
• Paper presentation directed to program managers and customers
• Four hour tutorial on Trade Studies
• Patent Pending 10/890,838 filed 12 July for this process
• DAU is developing on line class for DAU students.
• Part of systems engineering
• Soon to be part of Program Management series
• Plan to develop class for industry based on these concepts.
17 ©2006 Strategic e-Business Solutions, Inc.
 Contact Information

Strategic e-Business Solutions, Inc.

3 Bethesda Metro Center, Suite 700-1A
Bethesda, Maryland 20814, USA

(877) NOW-SeBS

Email: corporate@Sebsolutions.com
Web site: www.SeBSolutions.com

Art Felix, LSS Black Belt

afelix@sebsolutions.com
(805) 914-4482

18 ©2006 Strategic e-Business Solutions, Inc.