Systems Thinking

This article discusses the application of systems thinking approach in improving inventory management and reducing costs. It also explores the impact on supply chains and employee performance.

Running head: SYSTEMS THINKING
Systems Thinking
Name of student
Name of University
Author note

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Part A Proposal
I have been working as the Operations manager at Woolworths, Australia. At present,
the company has faced several operational issues associated with the management of
inventories such as lack of inventory and sometimes even excess amount of stocks, which get
wasted. Due to this, the inventory management has been complex and also I has affected the
business performance. Moreover, the emergence of competitors in business and changing
demands of customers have also forced to deliver products and services at lower rate and at a
faster rate, which has become daunting with each progressing days (Arnold & Wade, 2015).
The Systems Thinking approach should assist in engaging the various organisational
stakeholders and make collaborative decision regarding focus on the competition policy
along with putting focus on the reduction of inventory management related costs. According
To Young & Leveson (2013), the systems thinking approach could also be beneficial for
guiding the employees to logically think and then undertake the right course of action to the
overall management for delivering the best sustainable solution. It would allow for gathering
information about the inventories and identify the causes, then assess both the supply and
demand related information for proposing an effective solution to ensure reduction of
inventory management costs along with preventing wastage of stocks too (Williams et al.,
2017).

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Figure: Inventory management
(Source: Williams et al., 2017)
The general information should include the business nature, its characteristics,
policies to improve the inventory management and costs associated with the management of
inventories. The information about the supply chains is also an integral part of the systems
thinking approach, which could also analyse the aspects of planning and decision making.
The analysis of causes of the issues would be possible with the analysis of synchronisation of
supply and demand and also the present processes associated with the decision making and
planning. With the help of this systems thinking approach, the company would be able to
monitor the condition of warehouse and ensure abundant stock of inventories required to
prevent stoppage of consistent production all throughout (Riley et al., 2017). This would
improve the supply chain attributes, furthermore ensure that the supplies meet the demands in
the marketplace, thereby, and result in customer satisfaction at large. All these activities
should meet the criteria for CATWOE, i.e., enable transformation of processes, benefit the
stakeholders and customers too. Lastly, the company must be socially responsible and focus
on low carbon emissions to keep the environment healthy and safe too, which should resolve
the environmental constraints too.

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Figure: Big Picture for inventory management
(Source: Riley et al., 2017)
Few other issues that were experienced at the workplace of Woolworths had been the
poor performances of the employees, which resulted in delayed responses to customers’
queries and poor customers’ services. The management of rewards, benefits and incentives is
related to the increase in morale of the staffs, furthermore ensure introduction of the
incentives system for supporting the systems thinking approach. . The incentives or reward
system could allow Woolworths to ensure that they perform to their potential within the
workplace. The extrinsic as well as intrinsic rewards are associated with the various benefits
offered to the employees along with managing wages, overtime, merit pay, commissions and
sharing of profit as well. The recognition of employees could also be considered as intrinsic,
which is based on the accomplishment of tasks by the employees, while appreciation of their
efforts should also ensure remaining ait to the employees. This would make them more
engaged and allow them to perform effectively to deliver the best quality services and raise

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the level of customer satisfaction, which could influence consumer buying behaviours too
while making purchases of products and services from Woolworths. The systems thinking
approach has enabled the leader or manager of Woolworths to encourage the staffs and make
them recognize the organisation as a system. This would not only allow the people to
redesign the work and foster development of a good corporate culture, but could even help in
ensuring teamwork, collaboration and cooperation (Georgiou, 2013). The systems thinking
approach should not only create scopes for the employees in terms of their performance, but
would also empower them to reach their potential, furthermore deliver better services to the
customers for increasing their level of satisfaction and meet the business goals and objectives
too (Dekker, 2016). This would also strengthen the skills and expertise of employees and at
the same time, make the customers attain a good shopping experience while buying products
and services from Woolworths.

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References
Arnold, R. D., & Wade, J. P. (2015). A definition of systems thinking: a systems
approach. Procedia Computer Science, 44, 669-678.
Dekker, S. (2016). Drift into failure: From hunting broken components to understanding
complex systems. CRC Press.
Georgiou, I. (2013). Thinking through systems thinking. Routledge.
Riley, B., Willis, C., Holmes, B., FINEGOOD, D., BEST, A., & McIsaac, J. (2017). Systems
thinking and dissemination and implementation research. Dissemination and
Implementation Research in Health: Translating Science to Practice,.
Williams, A., Kennedy, S., Philipp, F., & Whiteman, G. (2017). Systems thinking: A review
of sustainability management research. Journal of Cleaner Production, 148, 866-881.