Putting Systems Thinking to Use: A Case Study
by
Pirkka-Matti P. Alanne, Kirjatyontekijankatu 4 B 25, 00170 Helsinki, Finland
and
Anil B. Jambekar', Michigan Technological University, Houghton, Michigan 49931
Systems thinking tools are*particularly useful for diagnosing the problems for the situations with
known history and insights are generated by structuring the assumptions to uncover causes of
significant problems. An objective of this paper is to put systems thinking to use by showing how
the problems faced by the case company were due to collective actions of several functional units
of the organization. The focus here is to illustrate thorugh causal loop diagramming the
consistently recurring themes during the case company’s attempt to adopt quality management
concepts. The paper concludes with generic insights equally applicable elsewhere.
Background, Method and Sources
The case company, SISU of USA fabricates some components and assembles logging machines
on demand. It employs more than 150 people. Prior to 1992 due to unhealthy financial status the
management decided to adopt the latest and notorious management philosophy of what is known
as Total Quality Management which they named Total Valmet Quality (TVQ). Valmet Logging
of America, Inc. was the name of the company prior to acquisition by SISU of Finland. However,
the TVQ program was prematurely abandoned in 1993 and restarted under different name in 1994
using the ISO-9000 standards and guidelines as a framework. After learning what happened to
the 1992-93 attempt, authors decided to thoroughly investigate the failed attempt by viewing
through systems thinking lens to uncover any systemic problems which may potentially cause the
problems for the 1994 attempt of adopting quality management concepts. The systems thinking
tools were selected, because the tools offer a shared language to deal with complexity as well as
a sense of control over the future one strives to influence. Furthermore, the critical insight the
process of application leads to is the revelation how today's problems are created by our own past
actions. Causal loop diagramming and archetypes [Brown and Tse, 1992; Kim, Daniel and
Burchill, Gary, 1993] were the primary tools utilized.
The information for building a consistent story was collected by interviewing the employees
directly involved in the TVQ program as members of the steering committee and by accessing
the project file that included a complete set of minutes and other records related to the project
plans and activities. Whenever necessary other employees were asked to illuminate their views on
certain events during that period. All these interviews and data collection activities were aimed at
constructing causal loop diagrams that would be based solely on facts.
The next section describes a causal loop showing a shared mental model of members of the
management team at the time of the enrollment process into the TVQ initiative. The following
section contains six specific stories, in the form of causal loops, happened during 1992 and 1993
" Corresponding Author
that led to abandonment of the TVQ. The stories were verified. Finally, the paper concludes with
identification of forces which modulates everybody’s interest in the quality management program.
The generic insight about these forces is equally applicable elsewhere.
Management Mental Model Prior to TVQ Initiation
The TVQ program started from the suggestion and interest of one member of the management
team. The managers recognized that quality thinking and improvement might be the crucial key to
get the shop floor operations into better shape, to maintain and gain competitiveness in the
market place and thus to improve financial bottom line. Management expectation about evolution
of VQM are shown in the Figure 1.
INABILITY TO IMPROVE FIN.
XN FORMANCE
TIME — oe t
FINANCIAL GOALS—#m SIGNIFICANCE OF
FINANCIAL GAP (gy MANAGEMENT WILLINGNESS T TiME
INVEST IN NEW APPROACHES
° D
1
~~ FINANCIAL STATUS ESR CEIVED VALUE NOTORIETY OF
qm e;
TIME - ” _
® TIME INVESTMENT IN t i
&
a TIME
a
FIGURE 1: VELMET MANAGEMENT MENTAL MODEL OF TOM PROGRAM IN EARLY 1992
TVQ Implementation Stories
In early 1992, most of the managers did not have any substantial knowledge of quality
management related issues. Consequently, the manager who initially suggested the program
received a free hand to develop a customized approach. Rest of the managers accepted the
arrangement, in spite of some concerns. The team began to self-educate in quality management
concepts that first concentrated introducing indiscriminately the principles of team dynamics,
problem solving techniques, customer focus, cost of good quality, process control, etc. Many
meetings were devoted to generate suitable implementation strategies. Several companies
engaged in quality programs were visited by the team members. Later an external consultant was
brought in to train the management team and to help in putting together a TVQ manual that
would be distributed to all key employees. Although most employees knew that a quality
management program was being put together, they were in total dark as far as the details and its
implications. Due to lack of planning and inconsistent communication with all employees, TVQ
was not progressing as wished for. Gradually, management’s conviction and patience with
program bagman to diminish. Employee resistance and apathy toward the program was also
evident. By the summer of 1993 the TVQ program had not achieved tangible results that would
have been comparable to the invested resources. The only tangible result prior to its
abandonment was a TVQ booklet.
The case company’s experience with the failed TVQ program was subjected to examination to
generate any insights that may be of value in the newly initiated ISO9000 driven quality
management program. The personal interviews with key individuals and access to the project file
that included a complete set of minutes and other records related to the project plans and
activities, generated several stories which were amenable to be represented using systems tools.
All six stories are presented in Figures 2 through 7. The details can be found in the thesis by the
first author [Pirkka-Matti P. Alanne, 1995].
Conclusion
The Table 1 offers a list of forces influencing the employee interest in VQM. The insights from
studying these forces are also applicable elsewhere.
Table 1: Employee Interest Influencing Forces
Interest Enhancing
Planning Domain
« Fear of losing / not gaining =e
orders
Improving bottom- line .
Buying time
Improving morale
Improving operations
References
Lack of result
orientation
Failure to
recognize
shortfalls in time
and resources
Lack of
consistency of
purpose
Lack of
appreciation of the
need for training
Interest Diminishing
Information Domain
Lack of quality
management
knowledge
Inability to
understand the
requirements
Failure to maintain
communication
Unavailability of
advice
No prior quality
documentation
Resources Domain
.
.
Lack of time
Conflicting demand
on time
Mismatch between
Tesource invested and
the results
Insufficient knowledge
resource
Insufficient workforce
Brown, Jim and Tse, Scott S. F., A System Dynamics Analysis of Total Quality Management
Implementation False Starts, Massachusetts Institute of Technology, May 1992.
Kim, Daniel and Burchill, Gary, “System Archetypes as a Diagnostic Tool: A Filed Based Study
of Total Quality Management Implementation, “ D-4289 System Dynamics Group Work-paper,
Massachusetts Institute of Technology, 1992.
Pirkka-Matti P. Alanne, A Clean Slate Approach to Designing an Infrastructure for Systemic
Quality Evolution: A Case Study, an unpublished M.S. thesis, Michigan Technological
University, 1995.
\\
TOM ACTIVITIES
iEED-{O SELF-EDUCATE
MEETINGS / SEMINARS / VISITS TO
ra OTHER PLAN
PERCEIVED $TATE (82)
UNDERSTANDING ABOUT PLANNING ON’
TOM k
JSION ABOUT T
2 oN DELAY 2
PRESSURE TO TI (R2)
SOMETHING QUICKLY °
° & PERCEIVED IMAGE,
STISFACTION.a——_ OF Tom
LEVEL WITH
‘TQM PROGRESS.
FIGURE 2: SLUGGISH WARM-UP
g DEMAND FROM
‘SHOP FLOOR
(R3)_, FOR BETTER
PROMISED SHIPPING, SCHEDULING Re priORITIZNG
GOALS ~* pRESSURE TO MEET "AL.
Omi een
EXPEDITING Ie Rtoeury
Bt) FIRE Fi
ACTIVITIES
°
eo
PROCESS ff —~ TIME DEVOTED To
IMPROVEMENTS + TOMBY THE TROOPS
FIGURE 4: RESISTANCE TO CHANGE
CONVICTION THAT EVERYBODY
UNDERSTANDS THAT TOM
REQUIRES LONG-TERM
Se Nemaas
MANAGEMENT RESS
(ey SWocrIMiNaTE TOM PROJECT
LAUNCH. IMPROVING
PERCEIVED PROGRESS /ABILITY TO REPORT ACTIVITIES
TOM “ACTITY"
REPORTED
BUSINESS
PERFORMANCE °
RESULT ORIENTED
‘TOM PROJECTS
FIGURE 6: “ACTIVITY” VS “RESULT” ORIENTED PROJECTS.
NEED TO INSTILLA
TOM ACTIVITIES CULTURE OF PARTICIPATIVE
MANAGEMENT
SELF reas ano EDUCATION IN
TEAM MENT
PRACTICING PARTICIPATIVE AUTOCRATIC
DECISION
MANAGEMENT N
®) errective comanecitey ze) 0 MANAGEMENT
AND CODRONATION ATTENTION
PERCEIVED
py _» PERFORMANCE, ae
GAP PE
PERPORMANGE PERFORMANCE
GOALS
FIGURE 3;TENSION BETWEEN PARTICIPATIVE AND
AUTOCRATIC DECISION MAKING
ADOPTION OF A
“NEAT BOX" TQM HH
( ” ¥
fe) fe)
:SSURE TO
LEVEL OF DIFFICULTY (R1) IDENTIFY UNIQUE
IN IMPLEMENTATION SOLUTION TO LOCAL
9 pas
LOCAL premise invoke
(82) CONCEPTS , PRINCIPLES &
GAMBEITY TOOLS TO LOCAL SITUATION
TO PERCEIVE
LEVERAGES POINTS,
+ ¥
FIGURE 5: “HAPPY MEAL" SYNDROME
‘TOTAL TIME AVAILABLE TO
ALL ACTIVITIES FRACTION OF THE TIME
ALLOCATED TO DAILY ACTIVITIES
am to ~&
:RFO! IN DAILY’
(e2)“ACTIVITIES
LAY
Rbouihed Perrontunce
‘TARGETED PERFORMANCE IN DAILY ACTIVITIES.
IN TOM ACTIVITIES ‘TOTAL TIME DEMANDED |
\ ee ALL, Aes
IME NEEDEL
me REQUIRED FOR
TOMACTIVITIES any ot
STRE
°
FIGURE 7: TRAGEDY OF COMMONS AT AN INDIVIDUAL LEVEL
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