1 1 CMSCB3004 Systems, Cybernetics and Management Hard Systems Thinking

2 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 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 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 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 6 Rational Decision Making Decision making has been defined as “…selecting a path which 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 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 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 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 ReplacementQueuing 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 Queuingproblems 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