The Systems Thinking Perspective: Structure Produces Behavior A fundamental principle of systems thinking is that one must view the world simultaneously from three levels: events, patterns of behaviors, and structure. We will provide an example of each one by putting it in the context of a business system: the logistics and sales system that connects a manufacturing firm to its many customers. In this system, we focus on observing the effect of delivery delays on product sales. Events: An event is each sale to each customer. These events are recorded in a report, showing the number of products sold in the prior month. Patterns of Behavior: The report includes a chart which plots prior monthly sales over a rolling twelve month historical horizon. This graphs the “pattern of behavior” of the monthly sales rate. The pattern demonstrates a healthy sales increase up until six months earlier, when the sales rate flattened out and then turned down slightly. Another chart illustrates the average delivery time to the firm’s customers. The pattern of behavior of delivery time over the past twelve months shows that up until eight months ago, delivery times were equal to the industry average, but then began to increase steadily. Structure: Taken together, the patterns of behavior of these two variables, monthly sales and average delivery time, suggest an increasing average delivery time causes a decrease in sales. This relationship is a manifestation of the cause-effect-cause “structure” of the industry system in which this firm competes.
Posted on: Thu, 14 Aug 2014 09:59:13 +0000
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