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Hello everyone, welcome to the 5 Minutes Podcast. Today I’d like to talk about Systems Thinking. What is System Thinking? And I think that the best way to explain it's by doing the opposite, it’s to explain the traditional analysis. Usually in the past when we wore analyzing a system, what did we do? Basically, we split that big system into small pieces and we analyze each of these pieces.
I want just to give you a simple example: Imagine the process of manufacturing a car into the auto industry, ok? So I look at the painting, I take a look at the electrical works, I take a look at the suspension, and a take a look at the final assembly, and I take a look at each of these pieces trying to understand how I can optimize them, where are the problems and how a should update. However, this works with one assumption, which is now very riskier, and very not useful, is that these systems do not talk to each other, but in reality, everything talks, and the is a very strong connection between pieces of the system. And this is where Systems Thinking comes into place.
So Systems Thinking studies how parts interrelate and how this system behaves over time. So what do I what? I what to say, ok, if a change a process, due to any improvement or due to additional transformation in one part of my value chain, what will happen with other pieces? Will they keep the equilibrium or they will have some kind of reinforcement? And this is exactly what we want to talk about now.
So basically you compare two things, equilibrium, and reinforcement. When you change something, you test, does the system still maintain the equilibrium, or when a change something there is a reinforcement in one part or one component of the system?
For example, you are transforming the way you do the painting on the car, and then you simulate that, and then what do you do? You test it in other pieces of the system, to see, ok what will happen with for example the final assembly? And maybe doing that new kind of painting you can create trouble, for example in the final assembly, or trouble in the warranty over time. So you can evaluate this down in the value chain or even in other related components.
A second example, I was talking about the F1 and the race and how they simulate. So basically what do they do? They do this kind of systems thinking on their cars. So they study the track and they try to calculate, ok, if a change the suspension of the car by one inch or by 2.5 centimeters, what will happen with the tires? What will happen with the fuel consumption? So you simulated, this is exactly the systems thinking, because some times you reduce that, and this gives more break to the car on the turns, however, it will spend more fuel for any reason, and this fuel will weight the car, and then you may lose power. I’m just, of course, I’m no expert on that, I’m just talking about how the system behaves. So basically what do you do if you have a part of a component that is facing a reinforcement, and you don’t do anything? There is a risk, that system will collapse. So you need to balance and bring that the equilibrium. So this is systems thinking, and systems thinking expands our ability to solve problems.
We know there’s no perfect, so most of the time, when we are working with systems thinking, we are using, of course, simulation modeling, but we are in an awareness that there is no perfect solution, that one side will create trouble for another side. So if you speed up so for example the delivery of components, maybe you will create trouble in your stock system because you have to manage a far bigger stock. So if you, for example, do one thing on your weather forecast using one behavior, if something changes, the system behaves completely different.
So basically, what is the system thinking? Is the set of skills, your analytical skills to understand these casualties and reinforcement, and the equilibrium of your system, plus your awareness, your awareness that you can not control everything in your system. Plus the simulation tools, I’m not talking only about statistical simulation, I’m talking about, for example for construction is a simulation, that will understand and will show you how the system behaves. I’m not talking about manufacturing, this is deeply used in projects, in any sort of project, for example, if you are developing a system, maybe something you do here, will open a bridge in terms of security that will create a risk of a hacker invasion or a risk of a legal claim.
Some final examples, weather forecast, climate change, global supply change. Did you see what we are facing now, for example, with the global supply change due to COVID? Because of the ports, opening, and closing, opening, and closing, what happening with half of the planet? Has the ships and the goods, and the other half has the containers, empty containers. So how do you match this? Because they don’t have containers and they cannot ship. So all this button-neck is creating such chaos in the global supply chain, that the prices of the freight, increased, ow 10x. Another example is the fight against terrorism, and this kind of intelligence, encounter intelligence, economic police. So all of these are really strong examples of systems thinking. An this is why PMI on the standards puts such an emphasis on making systems thinking the fifth principle of the standard, is because there is no way you can handle your project without understanding the complexity of your system, and the complexity of where your project is operating.
I hope you enjoy this podcast, I’m sorry for my English, some words are quite tricky for me, ok? And I hope you have a wonderful week.