CMSCB3004 Systems, Cybernetics and Management

1. CMSCB3004Systems, Cybernetics and Management Hard Systems Thinking

2. Development of the Hard Systems Approach • Defining the approach • Assumes the managers task is to solve clearly defined problems • Assumes a hard scientific/engineering basis • Attempts to reduce the gap between the current state of affairs and the desired state of affairs (economically) • Core Beliefs • Measurement and quantification are central to the approach • Assumes problems assume general characteristics and can be classified as a ‘type’ • Once that type is identified standard solutions can be systematically derived

3. Hard Systems Assumptions • All hard systems approaches begin with the assumption that the problem-solving process begins with a definitive problem statement • The end point of the process is to change the system to eliminate the problem • The process itself then becomes the identification and evaluation of efficient/economic ways to get from the beginning point to the end • Two example approaches - • Operations Research • Systems Analysis • Both rely to some extent on mathematical modeling (reduce the system to basic numerical form)

4. Uncertainty Reduction • Attempts to reduce complex problems to simpler elements • Takes the view that complex problems are simply an accumulation of many simple problems • If simple problems have simple solutions then the approach to complex situations is to break the problem into its constituent parts and apply the appropriate technique to those problems • However • Parts in isolation rarely behave in a similar manner when embedded in a system • Assumes it is important to know the inner working of parts not how they relate • Such reduction does little to how how the overall system works

5. The Fundamentals of Hard Systems Thinking • Identify the problem (Problem Definition) • Identify alternative solutions • Evaluate the costs and benefits of each alternative • Eliminate the causes of the problem (Implement the solution) • Transform the system to attain the desired state of affairs

6. Rational Decision Making • Decision making has been defined as • “…selecting a pathwhich will move the system - individual, computer program or organization - from some initial state to some terminal state” • So in this view decision making comes down to the identification and selection among satisfactory alternatives • Such choice is limited by the parameters present that limit the choices available e.g. cash flow, human skills, resources etc.

7. Rational Decision Making (2) • Every proposed alternative will fit the desired solution equally well • A set of decision criteria should be determined to evaluate the fit between the available options and the needs of the organization • E.g A company decide to replace old unreliable equipment • Decision criteria • Cost Limitations, required speed/accuracy of new machines, retraining requirements and installation costs • So each alternative proposed has following characteristics • Degree of risk in failing to meet decision criteria • Development and installation costs • Benefits to the organization

8. The Seven-Step Operations Research Process • Operations Research grew out of successful application of hard systems approaches in WW2 (anti-aircraft fire & submarine detection and deterrence systems) • Uses mathematical models to derive ‘algorithmic’ solutions to (usually routine) tactical problems • Forms the basis of ‘management science’ approaches

9. Types of Operation Research Problems • Generally non-strategic and tactical in nature • Focus on efficiency improvement • Relies on classifying of problems by form • Form - relationships between properties of the problem • Content - nature or meaning of those properties • So while the OR specialist may not know the content of a particular job - it is assumed that the form allows essential problem characteristics to be understood and similar solutions applied • Eight classes of OR problems • Allocation Inventory • Replacement Queuing • Sequencing and co-ordination Routing • Competitive Search

10. Types of Operation Research Problems • Allocation problems • Optimum apportionment of scarce resources • Inventory problems • Stock maintenance - optimum re-order point • Replacement problems • Asset maintenance - capital outlay vs maintenance costs • Queuing problems • Optimal management of waiting lines • Sequencing and co-ordination problems • Sequencing - prioritizing waiting lines e.g. hospital/maintenance triage • Co-ordination -arrange tasks to complete project on-time/cost PERT/CPM

11. Types of Operation Research Problems • Routing problems • Determining optimal route in a network of locations e.g. travelling salesman problem • Competitive problems • Characterized by‘games theory’ - zero-sum games - only one winner - non-zero sum games - possibility of other players benefiting • Search problems • Minimizes the search cost when a match between a class of problem and a class of solutions doesn’t exist - allowable cost becomes a parameter of the search problem • OR deals with complex but well-defined problems that are operational rather than strategic - wider scale problems - SA

12. Systems Analysis • Five steps of Systems Analysis are: • Problem Formulation • designed to clarify the goals and expectations of the client • identify constraints and obstacle that apply to project • Generating alternatives • No identifiable guidance regarding this element • relies on the creativity of the analyst • Forecasting future environmental states • Forecast future events that may impact on alternatives • Remains something of a black art

13. Systems Analysis • Identifying and evaluating the consequences • Each alternative has associated costs & benefits - means must be found that allow tradeoffs between various alternatives to be evaluated • Future value of the alternative as opposed to current system must be indicated • Comparing and ranking alternative courses of action • possibly the most difficult area - as each alternative has its own associated costs and benefits - no common yardstick to determine best alternative • Advise using domain expertise to determine best alternative

14. Iteration in the Systems Analysis Process • Systems analysis is somewhat unusual in that it generally incorporates iteration • This allows any models developed to be continually checked against changes in the target system • Introduces a ‘learning’ element into the process as each iteration produces new information or understanding of the situation

15. Hard Systems Approaches - Summary • Hard Systems Approaches represent one of several different means in the systems approach to management • Attempts to develop economical solutions to well-defined problems - best result with minimum effort and cost • Assumes all the necessary information is available • Assumes that the end to be achieved is agreed • In well-structured situations can produce very effective solutions • Does not perform well in situations where the end to be achieved is less clear