Systems Thinking &
The Supply Chain

"We supply chain managers maintain and feed a conceit that we understand and employ systems thinking in the execution of our duties."

That is how my article in Supply Chain Digest started. Actually, it was two articles, a Part 1 and a Part 2. You can read them below, too. I was not kidding about my opinion about managers and systems thinking.

Systems thinking is an approach to problem solving that looks at  problems as part of a system. When working with an organizational structure, like a supply chain, the system is the combination of the people, structures, processes, and environment that work together (or don’t work together) to create a desired outcome. A healthy system delivers the desired outcome. An unhealthy system delivers unintended consequences.

When things go wrong in a system, the result (what went wrong) is often the symptom, not the cause. People pay attention to the symptom, not the cause. If it is safety related we may move quickly on it. When process change is needed, we hear much about pealing back the layers and getting to the root cause of a problem. However, the conceit held by most managers is that the problems are easy to fix, that training people better (just training them to start with) or adding more technology will fix the root cause. We can ask “Why?” five times, or do fishbone charts. Great lineal thinking! That logic comes from the Toyota Production System (TPS) and the famous 5 Whys of Six Sigma thinking. Yes, they help solve problems, but only localized problems. The methods work when the problem can be localized. But they don’t work for large, complex problems, like climate change.

The key to TPS and 5 Whys is the concept of acceptance:  you fix what you can fix in your own sphere of control and influence. If the cause of a problem is outside of your sphere of control, the assumption is that the condition can’t change, so your processes must conform to the constraints created by the entities outside the direct process.

I never liked accepting that you can’t fix a remote cause of a problem in a system. Acceptance is not necessary or even right. We can change and influence the behavior of people in other departments in our own companies and people working in other companies. We can change the behavior of companies. That can come contractually or by the influence of practice.

To do it right, you have to know about systems thinking, and be able to look at the broad view of the problem as part of the system. The problem happens because some event elsewhere fails to stop a undesirable outcome, or worse, the event that makes the decision does not happen. Decisions made or not made, across the globe or across the hall, affect the outcome of other events.

That is where systems thinking methods come into play. The challenge is more than fixing problems in a current system; it is developing new systems that replace the current ones that are allowing failure to happen. Systems thinking take a holistic view of the entire system, the constraints, the influences, the motivators, in all of the enterprises and entities involved in the system. Sometimes these systems are complex, sometimes very simple. The one thing in common is that they operate in loops.

Loops are how many things work in life. When we define a process as a straight line, we are really just taking a short section of a larger system. In flowcharting there is always the “loop” function.

In this topic, we introduce the concept of systems thinking. There are a number of more technical articles about what it is and how to use it. There are also narrative descriptions of how to apply systems thinking in a Warehouse. If you want to know more, just start digging into it below.

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Articles in This Series

Articles in This Series


Thinking Systems

What is a system? If you immediately imagine a computer or a game console, you may be missing the forest for the trees. Sure, computers are parts of systems, and game consoles are parts of systems, but are they really systems?....              Read More

Lines and Circles

Let’s engage in a quick experiment. Look out your window and find something that is a work of nature.
Find the straight line in it. Did you see a straight line? No? ....                                          Read More

Systems Thinking &
The Supply Chain

In August 2013, Supply Chain Digest ran an article of mine in the “First Thoughts” section. Actually, it was two articles, a Part 1 and a Part 2. SC Digest editor Dan Gilmore runs what is one of the more thoughtful resources about supply chain management....                                            Read More

Balancing Process With Delay Systems Archetype 1

The most basic of the archetypes, the Balancing Process With Delay shows up everywhere. Let’s look at an everyday example:
Read More

Shifting the Burden to the Intervenor Systems Archetype 4 

Outside intervention is often the cause of change in an organization. That intervention is not market pressure, like competition, but can come from partners like suppliers, vendors, and service providers.
Read More

Success to the Successful Systems Archetype 7 

Another team- or activity-based dynamic system we see in logistics operations is Success to the Successful.   Read More

Growth and Underinvestment Systems Archetype 10

Businesses must grow in order to sustain their financial health. A growing concern is a going concern.  Read More

Systems Thinking: Getting More Out of the Systems

“How bad are WMS start-up failures?” A colleague asked me that question after my presentation about Start Up Distribution Center Failures at the Warehouse Education and Research Council (WERC) meeting in Dallas in May 2013.   Read More

Limits to Growth Systems Archetype 2 

One of the first concepts engineers learn in the Principles of Engineering Economics class is the Law of Diminishing Returns. Read More

Eroding Goals Systems Archetype 5 

Goal setting is a big deal in logistics. Warehouse operators set goals, just as transportation managers set goals. We all set goals. The real question is, Who makes their goals?
Read More


Tragedy of the Commons Systems Archetype 8 

Individual performance incentive programs can generate outstanding results. But at some point, the Tragedy of the Commons, if it is not carefully watched, can erode that success, breeding conflict in an organization, conflict that harms morale and reverses the early positive results.   Read More

Systems Thinking & Mowing the Grass

A neighbor’s difficulty getting his lawn mowed helps illustrate the how systems thinking can apply to what we do in everyday life, and to our warehouse and logistics operations.       Read More

Archetypes of Systems

We live in a world of millions of variables, billions of people, and trillions of possibilities. Yet despite all these variables, people, and possibilities, we can reduce the number of symptomatic descriptions to 10 basic models, or archetypes.    Read More

Shifting the Burden Systems Archetype 3

How many times have people advised you to “treat the cause, not the symptom”? Treating the symptom is the hallmark of the Shifting the Burden archetype.   Read More

Escalation Systems Archetype 6 

“My Dad can pick up 50 pounds with one hand!” “Oh yeah? Well, MY Dad can pick up 500 pounds with one hand!” “HA! MY Dad can pick up a WHOLE CAR with just his pinky!” Have you heard those lines on the schoolhouse playground before?       Read More

Fixes That Fail Systems Archetype 9

The problem with managers is that they do the first damned thing that pops into their minds. This single sentence is perhaps the best description of Archetype #9.
Read More

The Systems Archetypes of Pork Production

Imagine you are sitting at the table, the linen table cloth spread out before you .....     Read More

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