Bridges, Booms, Busts, Banks, Bailouts, ... Who Needs Capacity Planning?

Given that Wall Street management has proven once again that there are black swans; this time on a global scale, why would anyone be crazy enough to contemplate capacity management in the middle of such a mess?

See what Wall Street IT managers Simple CIO and Sal Viati have to say about it in "Let the Bridge Fall—As Long as It Falls on Time" (with apologies to Galileo).

"The commonly held idea that it's cheaper to over-engineer the hardware architecture to ensure adequate capacity is patently false. Here's the simple counter-example. If performance testing is skipped in order to meet the release schedule (and who knows if that's really valid?), and the deployed application ends up running single-threaded with lousy performance, a boat-load of the cheapest servers from China won't improve that."

...

"The bottom line is not really new. The sagacity of looking beyond the end of your nose is a truism, but incredibly that truth has been lost in the irrational exuberance of false Wall Street economics. A robust economy and IT customer satisfaction both come from foresight, not just eyesight. In fact, it's the second word in capacity planning.

Lest you think I'm being too hard on Wall St., listen to Peter Day of the BBC interviewing Philip Delves-Broughton about his new book entitled, What They Teach You at Harvard Business School: My Two Years in the Cauldron of Capitalism. Some points to listen for:

• MBAs are not taught to get their hands dirty with such sleazy activities as sales. That's sales as in: salesforce, sales people, the Fuller Brush Man.
  
• Neither Steve Jobs nor Bill Gates have an MBA.
  
• Too much devotion to spreadsheet calculations and powerpoint presentations. This is why Robert McNamara (Harvard MBA) mis-managed the Vietnam War. Too much faith in (manipulated) uncorroborated numbers.
  
• Total disconnect between teaching abstract business models and the business of business which is, err... like... selling stuff.
  
• These are the people running things! (Let's read that again)
  
• The Economist rankings: French model beats Anglo-Saxon model (of which Wall St. is obviously a subset).
  

Update (Tue, Jun 9, 2009): George Soros (hedge-funder extraordinaire) estimates this black swan could be 3-5 times bigger than the one seen in 1929. Update (Wed, Jun 10, 2009): Nobel economist, Joseph Stiglitz, slams Wall St. for tarnishing the reputation of American-style capitalism, which may pose new threats to global stability and U.S. security. Update (Mon, Jul 20, 2009): Associate director of M.I.T. Media Lab considers institutional monocultures in his Boston Globe op-ed piece: "What can failures teach us?"

Forged in the USA

Little's law, Jackson's theorem, and JIT are concepts that we associate with computer performance analysis and capacity planning for IT systems. But the truth is, these ideas were forged while solving business and manufacturing problems. It's also true to say that both IT and manufacturing in the USA have suffered dramatically from the effects of rapid offshoring in the new global economy. In the past decade, 5 million manufacturing jobs have been eliminated in the USA.

Walmart is one of the few USA retailers that has managed to do reasonably well in this economic recession, because they (patriotically?) cut USA manufacturers loose in favor of setting up factories offshore; mostly in China. Indeed, if you look at the tags on the items in a Walmart store, you won't see Made in Anywhere USA. Instead, it's anywhere but USA. Or so it would seem.

This piece: Despite Job Loss, U.S. Manufacturing Still Leads , on NPR this morning, caught my attention when it was pointed out that the USA still ranks as the number one manufacturer, producing some 20% of all goods in the world, ahead of Japan and well ahead of China. The reason this appears to contradict simple observation (like looking at Walmart tags) is that manufacturing in the USA is two levels of indirection away. The USA manufactures things that manufacture things. In other words, USA companies make heavy equipment and machines that are used in factories and on assembly lines that make the goods we buy, and that's not stated on those Walmart tags. But that's where Little, Jackson and JIT came in.

Mao Meets Capacity Management

Could happen. Not ex-Chairman Mao Zedong (Mao Tse Tung, when I was in school), who hasn't been "The Great Helmsman" in the national bridge for 35 years, but rather his grandson, Mao Xinyu. The latter's blog about his grandfather was selected by the Chinese government as the most "attention-grabbing" blog of 2008 (in mainland China, I assume).

In the course of studiously searching the web for references to his grandfather, Mao Xinyu might well have come across the rubric on my Guerrilla Manifesto page. It's a paraphrasing of a passage from gandpa's Little Red Book:

"Mao Tse-tung during the Chinese civil war, condensed guerrilla warfare into the following points for his troops: The enemy advances, we retreat. The enemy camps, we harass. The enemy tires, we attack. The enemy retreats, we pursue."

On second thought, maybe Mao Xinyu didn't find my page. I've been told that my entire web site is blocked in China. In an act of profound irony, this may be because the current Communist government blocks on keywords like "guerrilla" or possibly the Mao quotation, out of fear that such words might encourage some of their 1.3 billion people to rise up, like Mao and his guerrilla army in 1949, and do to them what Mao did to the Kuomintang. Could happen.