In a previous post discussed the Planning System. The word “system” is used a lot but what does it really mean and how can it help us manage our organizations better?
In this post we will give an overview of what systems are by looking at a power system by way of example.
Power System Example
A system typically has inputs and outputs and a boundary. In our example system, the input is coal and the output is electricity.
If we look inside the boundary, we see that the system consists of components. In our case there is a furnace that burns the coal to heat the water and produce steam. Then there is a steam turbine that uses the steam to cause it to turn. The turbine is coupled to a generator that produces the electricity.
One can break the components or sub systems down further into their components or subsystems for as many levels of detail as needed to describe the system.
The purpose of our system is to produce electricity. We need to know how well our system is performing. If the demand goes up or down, we need to make adjustments to the system components. So we take measurements and feed that back to the appropriate components to make the corrections.
Application to Business
Every business consists of several systems. The components are typically a mixture of hardware (equipment) and people as well as the control components.
A business or organization consists of systems. So you could have for example a banking system, a newsletter system, a delivery system, etc.
Systems are used for routine, ongoing activities in your organization and are usual described by a policy/procedure document and a flow diagram.
Part of strategic planning is to identify projects. Projects have finite duration and a defined deliverable. Projects deliverables typically include:
- design a white paper on the application of your product or service, or a new product launch
- create new systems (or update existing ones) for your organization eg a new client support system
Suppose your company provides a taxi service. Then components would be the dispatcher, the radio system, drivers, and the payment system. You would measure taxi idle time, driver shift duration, car maintenance and so on to manage the system.
In upcoming posts we will expand further on the concept of systems as they apply to business (small or big, for profit or not).