Siemens

HARD SYSTEM METHOD (HSM) VERSUS SOFT SYSTEM METHOD (SSM):

A CASE STUDY OF SIEMENS Apply the HSM method to this Siemens Situation case? Explain your conclusions?  

Systems description:

Siemens is currently operating in around 190 countries all over the world. The headquarter of the company is at Germany, from where all global operations are being monitored and supervised. At the same time, the company has provided the local units with the required authority in order to take decisions according to the local situation. This has resulted in increasing issues and challenges associated with the integration and collaboration of the all business units. Along with this Siemens is operating in different business categories. One of the important decision in this regard is to analyse the locations for production. Management of the organisation should also be considerate about the national concern. All business units should also fulfil the local needs and requirements.

Spray Diagram:

Identification of objectives and constraints:

Objectives Hierarchy

  • Increase Profits
    • Maximize the sales of products
      • Increase the products offered
      • Work on improving the quality of the products
        • Select best feasible location for this
    • Maximize the sales of services
      • Increase the services offered
      • Increase the quality of the services offered
        • Select best feasible location for this
  • Increase customer satisfaction
    • Maximize the quality of the products and services offered
      • Selection of the best location for this
    • Increase on site managers
      • Maximize the contact point for each customer
    • Provide more localized experience to the customers
      • Increase decentralization
  • Reduce operational cost
    • Minimize the risk of foreign exchange
    • Minimize the labour cost
      • Select appropriate location according to the opportunity cost associated with labours

Generation of routes to objectives:

There are different routes available for achieving the objectives. Some of the routes are:

Formulating measures of performance:

The strategy or policy in order to fulfil the objectives will be selected on following basis:

  1. Low cost
  2. High revenue
  3. Internal Factors
    1. Capacity of production
    2. Internal competencies
  4. External Factors
    1. Political environment

    2. Local demand
    3. Economic environment
    4. Competitive environment

Modelling:

All three available routes will be modelled with the help of NPV model by comparing the current cost and future benefits or returns.

Evaluation:

The constructed NPV models will be evaluated on the basis of the measure of performance. The model with the highest NPV will be selected.

Choice of routes to objectives:

The desired objectives can be achieved by selecting UK has the location for producing more goods and services. As the country has different business units which are not only fulfilling the global requirements but are also meeting the local requirements. At the same time, there is low foreign exchange risk associated with this option. The localised experience can increase the customer satisfaction.

Implementation:

The organisation should start to implement the strategy of selecting UK for further expansion of its business operations.

QUESTION # 2:

If you have a choice, would you use this HSM method or would you rather us the SSM? Explain why to senior management who hired you as a consultant.

HARD SYSTEM METHOD (HSM) VERSUS SOFT SYSTEM METHOD (SSM):

It is better to use Soft System Method (SSM) as compared to Hard System Method (HSM) for this situation. As there is no specific problem or issue in this situation. The need is to analyse the current operations of the company and to come up with different strategies in order to improve them. Soft System Method (SSM) is appropriate for such conditions. Also, Soft System Method (SSM) will enable the management to take into account the various perspectives about the problem under investigation. Soft System Method (SSM) will provide a solution directly relating with the overall context. Although Soft System Method (SSM) ignore the technology factor, it provides the more thorough analysis of the complete situation and available alternatives (Lane & Oliva, 1998).

Soft System Method (SSM) will enable the analyst to understand the overall problem or issue of the organisation which in turn will lead to the process of learning and development. On the other hand the Hard System Method (HSM) only provides the management with strategies to cope up with existing issue or problem (Lance, 2000). Moreover Hard System Method (HSM) results in lack of control despite of the formulation of the design by an expert (Checkland & Scholes, 1999).

QUESTION # 3:

What areas need further study and what methods and tools would be used in this further study?

AREAS FOR FURTHER STUDY:

In order to come up with optimal solution it is necessary to get hold of several important factors. There should be considerable information about the cost associated with different available options and the associated benefits. Apart from this the current operating cost should also be available. The global and local demand will also facilitates in the process of making the final decision.

All these areas can be explored with the help of Soft System Method (SSM). As Soft System Method (SSM) will enable the management to investigate the current situation and provide with complete analysis of different perspectives. Also, Soft System Method (SSM) will be helpful in the process of analysing the current and future demand and will come up with effective strategies to fulfil these demands (Checkland & Haynes, 1994).

References List

Checkland, P, & Haynes, G 1994, ‘Varieties of systems thinking: the case of soft systems methodology’, System Dynamics Review, vol. 10, no. 2-3, pp. 189-197.

Checkland, P, & Scholes, J 1999, Soft System Methodology: A 30 year retrospective. John Wiley & Sons, New York.

Lance, D 2000, ‘Should system dynamics be described as a ‘hard’ or ‘deterministic’ systems approach?’ Systems Research and Behavioral Science, vol. 17, pp. 3-22.

Lane, D, & Oliva, R 1998, ‘The greater whole: towards a synthesis of system dynamics and soft systems methodology’, European Journal of Operational Research, vol. 107, no. 1, pp. 214-235.

The Open University. Developing the Open University Hard Systems Method. Available from <http://openlearn.open.ac.uk/mod/oucontent/view.php?id=397869&section=15.6> [Accessed 26 November 2011]

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