(Using the Beer company and beer game as a system perspective)
• Every system has a purpose within a larger system. From an IT perspective multiple IT sub-systems have a purpose within a lager system. The boundaries of the system also determine relationship of sub-system to other system. A manufacturing plant can be a sub-system of the larger system. An ERP system not only is a sub-system itself from a hardware perspective but its applications themselves are multiple elements that interact with each other and external elements (RFID, network ect…) Its main purpose is to achieve organizational key objectives such as enabling profits and maximizing productivity.
• All of a system’s parts must be present for the system to carry out its purpose optimally. An ERP sub-system cannot carry-out its purpose optimally if network access (system mechanism) is limited or not available. Without system access the overall system objectives cannot be met. Without the ERP system invoice cannot be generated impacting organization objectives of generating revenue. Without money (part of a system) raw materials cannot be procured. Without inventory, product cannot be sold. Without ERP organization can still function but not optimally.
• A system’s parts must be arranged in a specific way for the system to carry out its purpose. Example: in order to produce a finished product on a critical resource, adequate quantity of raw / semi-finished material must be available timeously to avoid starving critical resource (system mechanism) responsible for material transformation. If manufacturing department is split into different areas of responsibility: Semi finished department and Finished product department and they are not in sync in production implies sub-optimal achievement of its purpose.
• Systems change in response to feedback. The word feedback plays a central role in systems thinking. Feedback is information that returns to its original transmitter such that it influences that transmitter’s subsequent actions. Example: Suppose you turn too sharply while driving your car around a curve. Visual cues (you see a mailbox rushing toward you) would tell you that you were turning too sharply. These cues constitute feedback that prompts you to change what you’re doing (jerk the steering wheel in the other direction somewhat) so you can put your car back on course.
• Systems maintain their stability by making adjustments based on feedback. Example: if sales rate is exceeding expected sales, adjustment should be made based on this feed-back to avoid stock out of critical products. If critical resources are producing at higher expected rate, feed-back will require that available raw materials/ semi-finished supply to line adjusted accordingly. Critical resource that require high set-up time should not be carried-out should tooling not be ready or input semi-finished materials delays. Feedback adjustments are fundamental within understanding system dynamics and achieving optimum purpose.