Systems Approach or Process Approach? Micro level of managing

[Randy Stewart]

By ensuring that the goals of all elements of the system are aligned and interrelated it becomes easier to identify the 10% of the improvement opportunities that will result in true improvement to the total system.

Great comment. The key word here is interrelated. All to often we have all these great initiatives going, however no one really knows how 1 affects the other.
Our group just went through our warehouse and logistics processes for an internal audit/review, a week later the newly established Internal Controls people were in the warehouse going through the same things we had just gone over. A good example of the left hand not knowing what the right hand was doing.
Plus without the interrelation being mapped or known you stand a good chance of losing, on one end, all that you have gained on the other.

 

[Kevin Mader]

NYH/Randy,

I agree. Randy, you raise a common occurrence, evidence that folks don't see things as a System, but rather a series of subsystems or processes without a common AIM.

If 'value' is at the center of the System, and each component of the System has a value statement connected to it, we begin to view things a lot differently, I think. Right now, each value statement is unrelated to the whole, thus we see individual profit centers working on their own problems, not necessarily the problems of the System.

I raised the item of 'Entropy' on the possibility that there is a limit to the amount of value (as is with energy). T_s stirred a part in my brain that I hadn't explored in a while, but much of the discussion centers about the state of flux (with regard to value) the system components are in. If there is a limit to the amount of Value contained in a system, it might be reasonable to consider that each component would experience varying levels of value in relationship to the amount of value consumed by another component. What does it take for a System and its components to survive? Amassing value in one component might cause the System to collapse (I think it will). What is necessary is for the proper balance to be achieved. This, as far as I can tell, is never static in any one component and is always dynamic. Individual profit centers makes this impossible, thus harmony is never achievable.

Thoughts??

Regards,

Kevin

 

[Craig H.]

Individual profit centers makes this impossible, thus harmony is never achievable.

Thoughts??

Kevin:

While I am still trying to learn about much of what has been said in this thread, one thing that I think we have all seen is the effects of kingdom building. When profit centers within a system are competing with each other for resources, and a manager's worth is measured by budget amount and number of employees reporting to them, harmony is but a sweet pipe dream.

Something I sense the tools outlined here can help with is to weaken and eventually remove such barriers. In practice, though, does it really work? Attitudes, especially ingrained ones, can be hard to change.

Craig

 

[Claes Gefvenberg]

My thought (after harrying my brains a bit) is: I agree. Massive suboptimation will certainly bring the whole structure down. Reason: No system contains endless resources... Good post, Kevin.

/Claes

 

[Randy Stewart]

If there is a limit to the amount of Value contained in a system, it might be reasonable to consider that each component would experience varying levels of value in relationship to the amount of value consumed by another component.

Okay I see where you're going with this and I agree with your observation.
I reviewed some of my old books last night and found this on Shannon entropy and information.
H(P)=sum P(s).log P(s) {P(s) = probability distribution that the system would be in state s}
"H" reaches its maximum value if all states are equiprobable, that is, if we have no indication whatsoever to assume that one state is more probable than another state. Thus it is natural that in this case entropy H reduces to variety V. Like variety, H expresses our uncertainty or ignorance about the syste's state. It is clear tha H =0 if and only if the probability of a certain state is 1 (and of all other states 0). In that case we have maximal certainty or complete information about what state the system is in.

A little confusing but after I read it a few time it started making a little sense. Anyway, when I couldn't see the relationship at first I thought you were referring to the Shannon model.

Now going along with what you have suggested Kevin:
If we say that Customer defined value = 1 then the sum of all our processes needs to add up to 1. Differing values would cause one step to add and one to subtract from the whole. I agree with this. And as S_T & NYH have brought up we need to evaluate the system and eliminate as much of the negatives as possible.

I have another example for you. I just went through some painting on the place and here is what I saw.
The value that the customer (me) is interested in is paint on the walls. So the only part of the painters operation that adds "customer" value is the paint brush on the wall - all else in non-customer value added. But all the support processes - taping, tarps, mixing, ladders, brush/roller cleaning - are absolutely necessary (to one extent or another) in order to satisfy the customer.
With what Kevin was saying: There is only so much I can do with spreading a tarp, taping off, etc. before it is a waste of time, costs to much, etc. and system collaspes.
What you are doing with a VSM then balancing time and cost so as to not disturb the "customer defined value".

 

[Mike S.]

NYH/Randy,

I raised the item of 'Entropy' on the possibility that there is a limit to the amount of value (as is with energy).
Kevin

Kev,

Which "energy" are you talking about? If you're talking about our buddy the Sheriff, maybe there is a limit to him (which I have yet to see ) but there is not, and never will be, a limit to the amount of energy in the universe. It may change form, but not quantity.

I agree you can over-optimize certain areas to the point of damaging the overall system, and this should be watched-for. But so many companies today are less than optimal in many areas, and due to management limitations, often the best a "regular" worker or lower-level manager can do each day is to try to optimize his/her sphere of influence.

 

[Kevin Mader]

Terrific thoughts folks!!! I'm late running out of the door, so I'll have to come in early (traffic permitting) to get a few new thoughts you have generated. Thanks for taking a shot at answering the questions I posed, and for doing homework (Randy).

Regards,

Kevin

 

[James Gutherson]

Are we going backwards at bit?

I have another example for you. I just went through some painting on the place and here is what I saw.
The value that the customer (me) is interested in is paint on the walls. So the only part of the painters operation that adds "customer" value is the paint brush on the wall - all else in non-customer value added. But all the support processes - taping, tarps, mixing, ladders, brush/roller cleaning - are absolutely necessary (to one extent or another) in order to satisfy the customer.
With what Kevin was saying: There is only so much I can do with spreading a tarp, taping off, etc. before it is a waste of time, costs to much, etc. and system collaspes.
What you are doing with a VSM then balancing time and cost so as to not disturb the "customer defined value".

This is great stuff guy's and girls.

I think however that this part of Randy's comment is going the other direction (or was that the point??)

Wouldn't looking at the value to the customer being 'paint on the walls' be a suboptimised process based view of what is happening?
If this was the case surely the most value to the custome would be just pouring the paint out of the tin - if all you wanted were paint on the wall.

If you looked at it from a system view, the customer really want's an even spread on paint of one colour spread on the wall, and only the wall hence the value in 'spreading a tarp, taping off, etc'.

I don't know whether I'm off track here, I'm doing a lot of learning in this thread.

 

[NYHawkeye - 2005]

Kev,

But so many companies today are less than optimal in many areas, and due to management limitations, often the best a "regular" worker or lower-level manager can do each day is to try to optimize his/her sphere of influence.

Mike -

This is a great observation - particularly the reference to management limitations.

When I was younger and more idealistic, I sincerely believed that the amount of value that could be added to any process was unlimited. You just needed a good plan and hard work.

Now that I am wiser (???) I understand that the amount of value that can be added to an individual process is controlled by many things - still unlimited, but more constrained than I would have ever imagined. IMO, systems thinking, and management's willingness to buy into a holistic view of the world is the biggest key to unlocking hidden value.

This realization has allowed me to better pick and choose what I expend my efforts on and has resulted in less time banging my head against the wall.

 

[htanaka]

Just academic?

systems_thinker, you say "Toyota is one of the few companies that "gets it", i.e., understands how to manage their business as a system. Most managers do not even know what the ultimate goal of their business system is, let alone know how to influence the behaviour of the system to achieve it"

Isn't this then a failure of 'systems thinkers' (people that 'get it' but are not able to communicate it to managers)?

Are all 'systems thinkers' just academics?