lecture 8: soft OR, soft ST an example characteristics of soft systems problems terminology

1. lecture 8: soft OR, soft ST • an example • characteristics of soft systems problems • terminology • a list of soft methodologies • Checkland’s SSM:“soft systems methodology” • other methodologies IE 398 - lecture 8

2. hard/soft distinction is not absolute • soft aspects are almost always present in any problem situation, and hard thinking can be useful even in pluralistic or coercive situations • the soft perspective should not be pushed aside when doing hard OR and vice-versa • and, most importantly, problem situations that look suited to hard OR are often more complex than they appear at first sight • consider the BAKÜ-CEYHAN example [adapted from “Tools for Thinking” by M Pidd, Wiley 2003] IE 398 - lecture 8

3. the “BAKÜ-CEYHAN” example: • oil from Bakü is piped by BOTAS to tanks in Ceyhan where it is then pumped into waiting tankers and shipped to consumption points • technology used involves sections of flexible hose about one metre in diameter that connect the oil tanks, via pumping stations, to the tankers in the harbour • hoses are subject to twisting forces and this sometimes causes the hoses to fail in service; when this happens there is a large spillage of crude oil until the pumps are switched to auxiliary hose lines • until recently, the hoses have been bought from ABC, a supplier who was the originator of these flexible hoses and has been selling its current range of hoses for about 10 years; and, until now, the same company has provided replacements as necessary IE 398 - lecture 8

4. over the last two years, two new suppliers – TUV and XYZ - have appeared both claiming that their hoses are at least as good, though their production technology is different and allows them to undercut ABC prices by up to 40% • new equipment may be needed to adapt pumping operations if TUV or XYZ products are to replace the ABC product. • the BOTAS Port Manager (PM)is very keen to reduce his costs and has insisted that one of the pumping stations is switched to XYZ Hose for a trial period; there have been problems during this trial and the BOTAS Pumping Officer (PO) is unhappy about what he feels is a much higher rate of hose failure than was the case with ABC products IE 398 - lecture 8

5. the PM, the PO, the BOTAS Maintenance Manager (MM) and you (a BOTAS IE) discuss the situation and the conversation goes something like this: • PM: ... Yes, I know that the hoses seem to fail a bit more often, but look at the price; we save 40% on the prices charged by ABC. I'm not bothered about shorter service lives with that reduction. • PO: Even if the life is only 50% of ABC Hose? • PM: Come on! It's much higher than that. • MM: Well, I'm not too sure about that. But I don't really know what the failure rates are. I'm sure that we could improve things by better maintenance. • PM: But if we stop the pumping just for preventive maintenance then it costs money. There's all the demurrage to pay to the tanker owners for a start. • MM: It's still cheaper than having a hose blow oil all over the harbour when it fails. Then we still have to stop pumping, but we also have to replace the hose section. Then we have to clean up the harbour. We also have the Greens on our backs about pollution. I'm sure that better maintenance is the answer. • PM: But it all costs money. There must be some way to work out what to do. Don’t you have any ideas in the IE Department? IE 398 - lecture 8

6. the problem looks straightforward and suitable for a hard-OR approach: • controllable variables seem to be: • the type of hose selected - ABCHose, XYZHose or TUVHose • the maintenance policies applied to the hoses once they are in use • that is, the decision problem is to select a hose type and to decide what maintenance it should have when in service • uncontrollable variables: • the expected life of the different types of hose - this may be expressed as a probability distribution • the likely purchase price of the hoses • the likely costs of spillages, should they occur - this may also be expressed as a probability distribution • the costs of the different maintenance policies • decision criterion: • minimise Expected (total cost) = ∑ [ Expected ( purchase price ) + Expected ( maintenance costs ) + Expected (spillage costs ) ] • data requirements: • hose prices: there may be no "price list" for such expensive items and, instead, the prices may be negotiated between BOTAS and the hose supplier; thus it may be better to think of Expected ( prices ) IE 398 - lecture 8

7. expected maintenance costs: first, are there any proper records of the cost of existing maintenance policies? If so, they may be used to estimate the likely cost of applying similar policies. The complications then begin. Is it reasonable to assume that similar policies will be needed for any type of hose? Probably not if we take seriously the views of the MM: "I'm sure that we could improve things by better maintenance." This means that the apparently simple decision model based on cost minimization may depend on at least one other model that attempts to show the costs of different maintenance policies • expected spillage costs: this will have at least two components. First, some estimate of the likely costs of a spillage and the number of spillages likely to occur. That is, some estimate of the life/failure distribution is needed for each of the three hose types. A further complication is that the service lives will depend on the maintenance policies, otherwise there is no point in having a maintenance policy. Thus, some model showing the link between maintenance and hose life will be needed. • thus, an apparently simple situation involving a choice among only three known alternatives can turn out to be more complicated than it would seem at first sight • this is much more than a minimisation problem since lifetime distributions for all hoses are hard to estimate, as are the effects of maintenance policies IE 398 - lecture 8

8. suitable data will most probably be not be available such as hose prices and cost of maintenance etc. • there may be even more complications to consider: • the PM was identified as the problem owner but there are other stakeholders: • for the PO, continuous and safe flow of oil may be more important than costs, so the most reliable hose would be the best • for the MM, an opportunity to show how effective maintenance is, could be the most important concern • therefore if these two internal stakeholders are not consulted, any proposed solution is likely to fail • there are also external stakeholders: • tanker operators • politicians • environmentalist groups • local residents • hose suppliers IE 398 - lecture 8

9. conclusion: • the problem was described as a problem of hose choice, but we know little or nothing about the history of the issue. We do not know why this group, led by the PM, has decided to search for a possible new supplier of these expensive hoses. It could be pressure from one of the external stakeholders; it might be dissatisfaction with the existing ABCHose; it might be that other pressures within BOTAS make it important that something is seen to be done at Ceyhan. There are many such possibilities and the careful analyst does not ignore them, nor should they necessarily be accepted. They all form part of the "mess" with which we have to work. • "problems" do not exist in a vacuum, but exist in people's minds and relate to their experience of the world and to their expectations. IE 398 - lecture 8

10. the proponents of soft OR/soft systems approaches point out that the majority of real-life problem situations in business, industry, and government violate many, if not most of the assumptions underlying hard OR approaches • furthermore, the human aspects inherent in the problem situation and the intervention process used should not be treated as separate unrelated issues • soft systems approaches were designed to deal with complex problem situations, which are messy, ill-structured, ill-defined, and not independent of people • in other words, where differentstakeholders with differentworldviews have different, possibly conflicting perceptions about the problem situation and about the appropriate objectives IE 398 - lecture 8

11. characteristics of soft systems approaches: • Structuring the issues in a problem situation, rather than narrowly focussed problem solving. • Facilitating dialogue between the various stakeholders with the aim of achieving a greater degree of shared perceptions of the problem situation, rather than providing a decision aid to decision makers. • Addressing “what" questions first, and “how" questions afterwards, i.e. • What is the nature of the issue? • What are appropriate objectives, given the various world views of the stakeholders? • What is the appropriate definition of the system for the issue considered? • Which changes are systemicallydesirable andculturally feasible? • How are these changes best brought about? • Getting the resolution of the problem from the stakeholders themselves, rather than from the analyst. • Changing the role of the problem solver to becoming a facilitator and resource person who relies on the technical subject expertise of the stakeholders. IE 398 - lecture 8

12. a note on terminology: in inquiry; scientific, systemic or whatever, the following procedures are used: • tools: a physical or a conceptual instrument; examples are mathematical symbols, computers, microscopes, random number tables etc. • techniques: ways of using inquiry tools, a course of action; examples are measurement techniques, sampling techniques, optimisation techniques etc. • methods: a set of techniques operated in sequence or ways of selecting techniques, ie. the evaluation of alternative courses of action; examples are the selection of the best sampling or optimisation technique • methodology: the study of methods so as to improve inquiry; therefore the theory that justifies the use of a particular method or methods • epistemology is a broader, philosophical conception IE 398 - lecture 8

13. there are several soft systems methodologies devised since 1950’s: • Gaming (The Rand Corporation) • Metagame analysis (US Arms Control and Disarmament Agency) • Strategic choice approach (J. Friend, A. Hickling) • Strategic assumption surfacing and testing (R.O. Mason, I.I. Mitroff) • Social systems design (C.W. Churchman) • Social systems sciences, also as Interactive Planning (R.L.Ackoff) • Soft systems methodology (P. Checkland) • Strategic option development and analysis (C. Eden) • Hypergame analysis (P.G. Bennett) • Robustness analysis (J. Rosenhead) • Theory of constraints (E. Goldratt) • Critical systems heuristics (W. Ulrich) • Drama theory (P.G. Bennett. M. Bradley, J. Bryant, N. Howard) • Total systems intervention (R.L. Flood, M.C. Jackson) • Multimethodology (J. Brocklesby, J. Mingers) IE 398 - lecture 8

14. several of these approaches were developed through action research, often within a practical consulting context • “action research originated in the work of Kurt Lewin who, in the late 1940s, recognised the problems inherent in the study of complex social and psychological processes by breaking them apart (reductionism) and taking them into the laboratory; he advocated instead testing theory in action, in the process of implementation • action research contributes both to the practical concerns of people in an immediate problematic situation and to the goals of social science by joint collaboration within a mutually agreed ethical framework” [“Systems Approaches to Management”, MC Jackson, Kluwer 2000] IE 398 - lecture 8

15. Checkland's soft systems methodology, Churchman's social system design, and Ulrich's critical systems heuristics, are based on philosophical foundations and systems theory • gaming, metagame and hypergame analysis, and drama theory originate in the ideas of game theory, but do not adopt its rigorous axiomatic foundations and only retain its outer form, i.e. two or more players with opposing views • other approaches, such as SODA and drama theory have psychological roots • total systems intervention and multimethodology are meta-methodologies that help analysts determine which paradigm and method or combination of methods is most suitable for a given problem situation IE 398 - lecture 8

16. They all have one thing in common, while hard OR deals mainly with the 'content' of the problem, giving only limited concern to 'process', soft approaches put equal emphasis on both content and process. • At the very start of an intervention, process is used for extracting content and the underlying value systems. • The methods seek to attain a reasonably comprehensive view of the issues within their wider context, although they recognize that true comprehensiveness is impossible, nor may it be needed to get to a workable solution or resolution of the problem. • The main aim at that stage is to gain a shared understanding and mutual appreciations about values, interests, objectives, choices for action, and the environment, and identify clusters of highly connected aspects. • Boundary choices are subjected to critical assessment and evaluation. • They also recognise that a resolution of a problem does not necessarily require a full convergence of views, and that a mutual appreciation of views may be sufficient to bring about an acceptable compromise and commitment for action. IE 398 - lecture 8

17. IE 398 - lecture 8