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System-wide Process Model:
by John G. Carlson, System Change, Inc. Innovative leadership regards systems thinking as the underpinning of comprehensive measurement and management of performance. Supported by networked computing, the push is now on for enterprise-wide systems that link a broad range of business activities. A total systems, process model can be created by extending process mapping to customers, suppliers, employees and family members. There are four major benefits to a total systems model: 1. A complete view of waste. A total systems approach requires that all sub-cost systems be considered interdependent and part of a larger cost system. Organizations need new tools and measurements to better measure and manage this vital interrelatedness. Quality and productivity cost elements often overlap. A total systems approach clarifies interrelationships. Strategic leadership can then measure Total Quality and Total Productivity costs across multiple organizations defining an even more global cost measurement process. 2. A new life-cycle view of assets. As waste is eliminated systematically, it unleashes the full revenue-generating power of in-place assets. All asset have differing life-cycles, representing separate, yet interdependent processes. Assessing and managing this uniqueness and interdependence allows for improved control over time-based, cause and effect relationships. When employers adopt this same life-cycle perspective for productivity, they obtain data to understand the cost / benefit of better managing their human assets from hire to retire, rather than from hire to fire. Businesses involved in knowledge-based products and services are severely sub-optimizing their cost structure by churning employees through head-count reduction tactics. 3. Life-cycle cost management for both equipment and people. Database technology allows managers to slice their cost structure in new ways. A powerful, broad-based measurement involves segmenting costs at three points in the life-cycle: cost of acquisition, cost of maintenance, and cost of replacement. Acquisition and replacement costs, in conjunction with lost revenues, usually overwhelm the differential cost of quality-driven maintenance spending for equipment and productivity-driven maintenance spending for employees and their families. Life-cycle cost profiling quickly points out the waste involved in many cost cutting and cost containment tactics. 4. Data-driven self-organizing systems. Rethinking structure and systems, using a total systems process model, ushers in a new world of data-driven self-organizing systems. Executives obtain real power to optimize their cost structure, managing equipment, people and technology at the margin, not based on averages, through the use of new global and life-cycle models and tools. System feedback loops change from those employed traditionally in Total Quality Management. Database technology, combined with cost-effective access through corporate Intranets, introduces a new population-based approach to managing assets across the total enterprise and across time. Global and life-cycle cost management can then be connected to global and life-cycle management of risks, quality and productivity. When these elements are integrated, executives obtain vastly increased control over their future.
First publication, copyrighted 1996 by System Change, Inc.: John G. Carlson is Founder and CEO of System Change, Inc., a methods-based consulting firm featuring assessment services. He can be reached at jcarlson@systemchange.com or through his firm's website: www.systemchange.com. |
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