Operations Management
1.5 The Systems Approach
There are only two approaches that P/OM can use:
1. The functional field approach, and 2. The systems approach.
With the functional field approach, operations management is expected to perform its P/OM function with minimum reference to other parts of the busi- ness, such as marketing and finance. The functional field approach concentrates on the specific tasks that must be done to make the product or deliver the service.
This approach is tactical, not strategic. Many marginal firms use the functional field approach (by default) because it is human nature to be territorial. Teamwork requires caring and takes effort.
A typical organization chart—but with hierarchical details mainly for P/OM—
is shown in Figure 1.1. The P/OM department is headed by a senior vice presi- dent of operations, who has the general manager as well as staff heads (for quality, materials, and engineering) reporting to him or her. The chart also shows, without details, marketing, finance, accounting, R&D, and other functions.
There are no lines connecting people in the other functional areas to people in P/OM. The only connection is at the president’s level. Within the P/OM area, there are a limited number of connections and these are hierarchically structured.
The traditional organization chart does not reflect the systems approach wherein anyone can talk to anyone else if they are part of the problem or part of the solution.
Teamwork is difficult to achieve with self-contained functions.
This is called a “stovepipe” organization because each function operates as if it has its own separate compartment with its own chimney.
The systems approach integrates P/OM decisions with those of all other busi- ness functions. This is an integrated and coordinated team-playing model of the
Product engineering
Research
developmentand Accounting President and/or CEO
Marketing Finance OM line of direct responsibility
Production line associates
Industrial engineering General
manager Vice president
of quality Vice president
of material
Inventory
management Distribution
management Purchasing Plant
maintenance
Supervisor Supervisor Supervisor Supervisor
standardsWork Process management president ofVice
operations
Figure 1.1 Traditional organization chart showing self-contained functional areas.
organization. The challenge is to make the firm perform as a team. The systems approach entails having all participants cooperate in solving problems that require mutual involvement. It begins with strategic planning and moves to tactical accomplishments.
Muller-Merbach (1994) has provided a useful way of describing the systems approach as a combination of concepts. Figure 1.2 depicts the various meanings that he has associated with the systems approach.
“The systems approach focuses the consideration of wholes and of their relations to their parts. The systems approach is necessarily comprehen- sive, holistic and interdisciplinary. However, there are several types of systems approaches around, quite different from each other and com- peting with one another,” Muller-Merbach (1994) notes.
1.5.1 Using the Systematic–Constructive Approach
The systematic systems approach is considered the Western tradition, whereas the systemic systems approach is characteristic of Eastern philosophies. The systems approach this book uses is systematic: analytic, synthetic (i.e., synthesis), and constructive.
The systems approach called introspection is based on the analytic reduction of systems into their parts, which is characteristic of the sciences.
The systems approach called extraspection is characteristic of philosophy and the humanities. It strives to integrate objects and ideas into higher-order systems using synthesis. The field of general systems is closely associated with this effort to develop meta-systems of knowledge.
Say that a computer stops working. Following introspection, it is opened up and taken apart. By means of analysis, components are tested to find the cause of the trouble.
Systems approach
Systemic Systematic
Introspection Analytic reduction
Extraspection Synthetic integration
Construction Creative
design
Contemplation Holistic meditation
Figure 1.2 Taxonomy (hierarchical classification) of the systems approach.
Synthesis is required to reassemble the computer. Using extraspection, perhaps a better overall configuration can be found. In fact, a faster and better method for maintaining all computers in the office may be invented.
Combine analysis and synthesis to obtain the third systems approach, called construction. It is “characteristic of the engineering sciences and their creative design of systems for practical purposes,” Muller-Merbach (1994).
Teamwork increases the effectiveness of introspection, extraspection, and con- struction. Creative design that uses analysis, synthesis, and construction is the sys- tems approach described in this book.
1.5.2 Why Is the Systems Approach Required?
The systems approach is needed because it produces better solutions than any other approach, especially the functional field approach. It leads to better decisions and provides better problem-solving for complex situations, enabling those that use it to be more successful.
Think of the systems approach in terms of the sports team. If the players are coordinated by communication and training, they play better, and win more games. Similarly, in business, those using the systems approach are the leading competitors in every industry.
1.5.3 Defining the System
Elements that qualify to be part of a system are those that have a direct or indirect impact on the problem, or its solution—on the plan or the decision. Thus, a P/OM system is everything that affects product line formulation, process planning, capac- ity decisions, quality standards, inventory levels, and production schedules. A P/OM system incorporates all relevant factors, that is, those related to P/OM with an effect on the purposes and goals of the organization.
Figure 1.3 is a symbolic picture of a system. The shape (or core) encloses all fac- tors that have a strong effect on the purposes and goals of the system. Weak forces outside the core may also have to be considered.
Figure 1.4 shows an organization chart with the system’s shape mapped as a circle across certain functions. This is meant to reflect the fact that problems and opportunities include various people, departments, etc. The problem map cuts across P/OM as well as certain specific parts of marketing and accounting.
This is meant as a symbolic representation of the fact that people in departments falling inside the shaded area are involved with the problem being considered.
Major responsibilities appear to fall within the domain of the general manager, a particular supervisor, and plant maintenance. All other departments have only partial involvement.
The key to understanding the relevant system is to identify all of the main play- ers and elements that interact to create the system in which the real problem resides.
Weak interactions are outside the core of the system Strong interactions are inside the core of the system
Figure 1.3 Representation of a system. Weak interactions are outside the core of the system; strong interactions are inside the core of the system.
Product engineering
Research
developmentand Accounting President and/or CEO
Marketing Finance OM line of direct responsibility
Production line associates
Industrial engineering General
manager Vice president
of quality Vice president
of material
Inventory
management Distribution
management Purchasing Plant
maintenance
Supervisor Supervisor Supervisor Supervisor
standardsWork Process management president ofVice
operations
Figure 1.4 Systems problems are mapped over a traditional organization chart.
Even though the problem solution may be assigned to the operations management team, the resolution requires cooperation of all the organizational participants in the problem.
1.5.4 Structure of the Systems Approach
The systems approach requires identification of all the elements related to purposes and goals. The question to be answered: What accounts for the attainment of the goals?
1. The visual concept depicted in Figure 1.3 is one way of answering the question.
2. Another way is to use a mathematical model that shows what accounts for the performance of the system and the attainment of its goals. The equation shown here can be read as “The goals yi are a function of all relevant factors xj
and tj.” That is,
{ }yi = f x x{ , , , ; , , , }.1 2x t tj 1 2tj (1.1) 3. The systems approach requires control of timing. It is to be noted that
Equation 1.1 includes measures of time (tj) as an important systems param- eter. By recording conditions over time, it is possible to measure rates of change which are also important systems descriptors. Timing is critical to the performance of orchestras, sports teams, and business organizations. To achieve synchronization of functions, and harmony, which are time-depen- dent processes, the systems approach is required.
4. The systems approach demands teamwork. Coordination of all participants is essential. Designing a productive process for making sandwiches or tooth- paste, delivering packages, or servicing cars requires cooperation among all members of the system. To operate a process properly, it is necessary for all participants to have the systems perspective. In particular, the attainment of quality calls for a dedicated team effort. A mistake by anyone involved in the attainment of quality is like the weak link of a chain, which causes the whole system to fail. For example, “the surgery was successful in every regard except for the missing scalpel which may still be in the patient.”
1.5.5 Examples of the Systems Approach
As previously pointed out, managing a sports team is an excellent example of a pur- poseful effort that is enhanced by using the systems approach. Another fine exam- ple is the symphony orchestra whose conductor makes certain that all participants are synchronized (on the same timeline). If the violins, woodwinds, and brass treat
their participation as if they were separate functional fields, bedlam would result.
Everyone looks to the conductor to keep the components of the system related and balanced. A well-run restaurant, hospital, school, or theater exemplifies the critical importance of competent synchronization.
For current purposes, the main example to explore is a generic business model whereby operations managers make products and/or deliver services. Using the sys- tems approach to coordinate the business-unit team is essential to balance supply and demand, meet schedules, minimize costs, guarantee quality-standards fulfill- ment, maximize productivity, and optimize the use of critical resources.
For fun, a more abstract example that is widely known to both children and adults might be useful at this point. Jigsaw puzzles strike a chord because being able to assemble them smartly requires a systems perspective. Vision is needed to relate the interdependent elements of pieces using clues of various kinds. Puzzle difficulty increases when pieces are cut to look alike and little color differentiation is provided. Edges are important when internal spatial characteristics send no real hints concerning congruent outlines.
Puzzles become geometrically more difficult as the number of pieces increases.
Similarly, as a system becomes larger with more complex interactions, it becomes more difficult to fathom its structure and to understand how it functions. Operations management problems are composed of complex subsystems, which require inter- functional communications to uncover patterns that relate the subsystems to the whole system.
1.5.6 Designing the Product Line Using the Systems Approach
The product line (goods and/or services) is the starting point of strategic thinking for the firm as discussed in Chapter 11. Every factor relevant to the success of the product line must be included in deliberations among all functional managers of the business. The product line is tested against marketing assumptions.
Market research starts with the concept and later, after prototypes are made, tests them in the marketplace. If services are the products, the same consider- ations apply. Price points are conceived that should generate an expected volume of demand for the chosen qualities of the products.
If the products test well, then P/OM designs processes for making and deliv- ering them. Most of the time, process improvements can be suggested based on changes in the design of the products. The costs of making and delivering the prod- ucts, and the qualities of the products, are a function of materials and processes.
The discussion between marketing and P/OM involves finance as well. The kind of processes used will determine investments required by P/OM to be under- written by the financial managers. All business functions are involved in strategic planning, which means that the systems approach is essential.