Process efficiency OR systems optimisation?


Approx. time to read: 10 minutes

“More of the same, faster!” has been the primary approach to production efficiency for centuries, from factory production lines to wide-acre mono-crop farming.   And the focus of production efficiency untill recently has been individual processes.

However, process efficiency “myopia” comes with consequences:

  • When you only look at the efficiency of an individual process, then you stop seeing the systems it is part of.
    When you lose sight of the system, you lose the best opportunities to optimise its operation.
  • When you focus in on processes, you can also create create flawed performance measures that generate perverse behaviours.

    In factories, only measuring machine throughput leads to machines being run with minimum maintenance downtime and bigger batch sizes to reduce changeovers. The process might be “efficient” – but the costs to the business of machine failures and excess stock makes a big impact on the function of the business as a system.

  • Process efficiency preoccupations can also stop us questioning the overall design of products, services and the built environment.
    It can lead us to focus on minimising the power consumed by domestic air-conditioning – instead of double-insulating or applying passive design principles to create a self-cooling home.”

Before you “fix” a process, understand the system

Every process is part of a system – a system that has goals. Every system also has resource stocks, flows and bottlenecks. Business is full of systems with non-obvious feedback loops and complex patterns of human behaviour.

Looking at a process without understanding the systems it’s part of is like trying to watch a football game without knowing the rules of the game. You won’t understand why soccer players don’t touch the ball with their hands, or why AFL players get cheered for taking a high mark.

For example, before we understood fully how ecological systems functioned, we blithely introduced blackberries, rabbits and cane toads into Australia.  There might have been good intent – but without systems awareness it was disasterous.

An ability to see the systems in play can be a great advantage, whether you’re trying to reduce excess inventory, business overheads, carbon emissions or homelessness.

Systems thinking, Kaizen and TQM

Systems Thinking isn’t “some new fad” – it has one set of roots as far back as the 1950s (when W Edwards Deming got involved in the reconstruction of post-war Japan).  He concluded that there’s a limit to the usefulness of increasing the efficiency of individual processes – because it’s all too easy to lose sight of the end performance of the systems each process is a part of.

The success of the Japanese post-war quality control movement Deming started (Kaizen) challenge process thinking through the 1960s and 1970s. Deming’s work didn’t just improve ‘Japanese industry – it created a serious challenge to American industries from cars to electronics.

It returned to the west under names and adaptations including Total Quality Management and Lean Manufacturing, which address the many forms of waste created by over-focusing on throughput.

Everyone does some systems thinking

If you’ve ever managed to get a warm shower out of an under-pressured hot water system, then you’ve done some systems thinking.

You quickly learned to be much more delicate in “giving feedback” to (ie. turning) the cold water tap than you were turning the hot water tap.

The key to seeing reality systemically is seeing circles of influence rather than straight lines.
Peter Senge, The Fifth Discipline

Scaling up, professionalising and practicing your systems awareness can give you a major strategic advantage – because with it you can:

  • Recognise the real and dynamic way that inter-related processes function –  instead of simplistic, linear cause-effect chains
  • See (and influence) the process of change, instead of being blind-sided by the situations that result from it.

Systems examples – large and small

So what can systems thinking look like (and solve)?

At carpet manufacturer Interface an innovation team was tasked with reducing the environmental impact of dyeing woven carpet. One engineer on the team took a closer look at one tufting machine that made the carpet – BEFORE the dyeing process –  and found that it could be programmed to use multiple yarn colours.

That took the whole environmental impact of dyeing (and its expenses and hazards) TOTALLY out of the plant.  It happened because he looked at the broader system – not just the dyeing process.

A US homelessness project applied systems thinking to social change and came to realise that  – over the long term – homeless shelters did nothing to reduce homelessness.

Shelters simply made the homeless less visible and homelessness marginally less uncomfortable. After exploring systems behaviours, agreement was reached to focus on a simple, long term solution –  funding more supported housing instead of more shelters.

Intelligent transport systems use smart technology to optimise traffic flows on existing road networks. Rather than building more, bigger, faster roads we can use the roads we already have more effectively – by managing inter-related stop lights.  Plus, we can do it for a fraction of the cost of building new motor ways.

Combined heat and power onsite in a factory or commercial building can increase energy efficiency from 30-40% to 90%.  Rather than buying in power from the grid why not treat your building as a system.  You can make energy locally to your building and use any excess heat energy to supply your hot water and heating?  Likewise, if you’re in a factory, how could you leverage the heat produced by machinery and processes to maximise your energy system performance?

If you were only looking at an individual operation then process efficiency might orient you to trying to use less power, or dropping a required temperature to the minimum viable.  With systems thinking, you can explore for multiple ways to use the heat you create.

Study systems – not just processes

Stepping back from individual processes can enable a whole range of new opportunities emerge – if you know how to “think systems”.

The Systems Thinking toolset

Systems aren’t new – humans have been building systems for millenia – often with failures and unexpected consequences.

What we have today is online access to an organised toolset to help us do it better and more easily AND with fewer unexpected consequences.

Systems Thinking has roots everywhere – from biology to cybernetics as well as manufacturing.   It has applications across business from Just-In-Time manufacturing to team building and customer relationship management.

It gives you new access to the power of leverage

What skilled Systems Thinking practitioners have found over the decades since it was formulated is that systems thinking uncovers smarter leverage points – places where a small shift in behaviour can lead to a big change in results.







The body of knowledge and how to get started

Key chapters (Ch 5, Ch 6 and Appendix 2)  of Peter Senge’s  classic business book The Fifth Discipline are a good start.

Donella Meadows (co- author of The Limits to Growth) saw systems as a powerful tool for sustainability at all levels, and the book Thinking in Systems adds a regenerative lens

Systems thinking can be applied to social change as well as to physical systems, to better solve a variety of wickedly complex problems. Stroh’s book Systems Thinking for Social Change is excellent.   (Understanding how to work with human systems will super-charge your career, too!)

This summary article A Definition of Systems Thinking from could get you started.

Coursea’s online learning library includes a free systems thinking course on  Developing A Systems Mindset

More stories and resources

Back in the 1990s, a UK engineer for the Bourough of Woking created a combined heat and power project that delivered 80% energy savings. Engineer Allan Jones told the story to ABC (and while the audio has expired, the transcript makes fascinating reading.)

If shipping was a country, it would be the 6th largest global emitter. Now there are robots (like a Roomba for cargo ships) that scrub the cargo ship hulls clean when they’re docked at a port. Benefits flow through both economic and eco systems because:

  • reduced fuel usage reduces operational costs
  • better fuel efficiency make hydrogen fuel feasible
  • business costs are further reduced because the ship doesn’t have to be dry-docked to have its hull cleaned
  • there’s an environmental side benefit – a clean hull the spread of invasive aquatic species from port to port
  • the bunker fuel used for shipping creates toxic particulates – so less fuel used contributes to increased human health

Some extra resources

Systems thinking is a key strategy in Circular Economy innovation (Insight 03), and there’s an introductory video course on the Ellen Macarthur Foundation Website.

This article is a further useful introduction to Peter Senge’s work.

Thanks to YouTube, you can meet fascinating people – including three of my favourite systems thinkers

And some starting questions to program your brain to filter for

“You can’t solve a problem from the mindset that created it”

These question could help you to start exploring the systems you operate within for new, beneficial leverage points:

  • How do the processes of our business combine into dynamic systems?
  • What are the supply chain systems that our business is part of?
  • What are the social systems operating within our business?
  • What are the resource flow systems operating within our business?
  • What are the resource flow systems operating across our supply chain system?

Over the next few days, see what shows up for you as you start to re-imagine Business-As-Usual.

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About the Author

Leigh is a supply chain analyst turned sustainable business writer, with over 30 years of business experience. Leigh blogs and podcasts on the commercial climate solutions scaling in the marketplace and the business opportunities they offer – particularly to SMEs.  

Climate solutions have been called “the biggest business opportunity in human history” – and SME businesses need to know how to find their opportunities.

Leigh is the leader of the Better Business for Good Company Regenerative Business Expert Panel.

Leigh Baker

Business and Systems Analyst, Balance3