STAT3100/6100 Assignment 2 - Semester 2, 2019: Systems Thinking

This assignment solution for STAT3100/6100 explores systems thinking in an integrated workforce context, focusing on process capability and the Taguchi loss function. The solution analyzes data related to elongation, comparing original and adjusted data to assess average Taguchi loss per unit. It delves into the Deming philosophy, contrasting a stove manufacturer's practices with the principles of quality improvement and the impact of market competition. Furthermore, the assignment examines Total Quality Management (TQM) principles, particularly trust and teamwork, within an iron-ore mining company scenario, highlighting the consequences of lacking these aspects. The solution also provides an example of how teamwork can improve sales and profit. The assignment emphasizes the importance of applying systems thinking to optimize processes and improve workforce efficiency and effectiveness.

Process capability and the Taguchi loss function
1c)
The average Taguchi loss per unit based on the original data (Elongation) is 56.519564 and that
of adjusted data (Adj Data) is 80.480419. The average Taguchi loss per unit for the adjusted data
“Adj Data” is greater than that of the original data (Shojaei, Haeri & Mohammadi, 2018).
1d)
k(mean-target)2 + k(variance)
20(13.3548-15)2+ 20(0.0245112)
54.62388
1e) The loss due to centring the process on the target variable is less than the loss due to the
variation of the process. This is because the target value is greater than the mean of the original
data hence on subtracting the two value we a negative which is less than the variance of the same
original data. Since the loss is greater on the variance this indicates that the system improved for
every value in the original data.
3b)
In the past decade when John Formosa and John Mc Alpin were the managers of a small Sydney
stove manufacturer in which it was realized that they had forged the reputation for quality goods.
Therefore, they did not utilize the deming philosophy since they did not improve quality of
goods. Furthermore, most of their goods looked dated because of lack of improvement of the
quality. As a result of poor quality the sales reduced and the company became bankrupt
indicating that the deming philosophy was not utilized.
When the European brands were getting into the market St. George could have also improved
and changed their model so that their models do not look dated and they continue making more

sales hence no bankruptcy. The company could also ensure that the cost of production would be
low this would be done by ensuring better use of materials and decrease in costs which would
later improve sales hence staying in the business.
4a)
The Iron-Ore mining company has three junior managers and one general managerial and all the
three junior managers’ report their issue to the general managers. In this case the aspect of TQM
which is overlooked is the trust. This is because for the company to be effective and efficient in
its operation there should be trust among the managers that is the three junior managers should
be trusted and given chance to make their own decision based on the challenges they are facing
at their stations. Another aspect which may be lacking from the above scenario is teamwork.
There is no team work in that each junior manager must always report to the general manager
and he is the one making the final decision (Saeedi, 2017). In any organization where there is
team work each and every person could come up with ideas on how to solve challenges and then
the idea is brainstormed by everybody and then solution is found. However, in the above
scenario we see that the general manager is the decision maker and his decisions are the final
hence making the company to sale 58mtpa and yet they had the capacity of selling 60 mtpa. If
the iron-ore company trusted the three junior managers then the company would be more
effective and efficient because the junior managers would work hard with minimum supervision
so as to improve the quality of the company. Moreover, they will do their work in free manner
without stress hence better output will be produced at the end. Team work will also play a very
important role in this company because whenever there is team work each and every member is
able to share challenges and different ways in which the problems can be solved. This later can

help the company for example in this case where the general manager dictated that 58 mtpa were
to be sold and yet the company could sell 60 mtpa. This arose due to lack of team work.
b)
The aspect of TQM which this company was overlooking is team work. For example a company
decides to make sales and before making the sales the members of the company decides to meet
and share the issue. Then one member suggest that if they make sales at that time they won’t
make good profit and therefore suggest that they make sales at a certain month in which they all
agreed. Then later they sales all their products at the suggested month and makes the good profit
that were projected by one of them. Therefore from the example we see that if there was no team
work they could have sold their product at lower profit compared to whatever they sold hence
team work is very important in any organization.

References
Shojaei, P., Haeri, S. A. S., & Mohammadi, S. (2018). Airports evaluation and ranking model
using Taguchi loss function, best-worst method and VIKOR technique. Journal of Air Transport
Management, 68, 4-13.
Saeedi, H. (2017). Deming Quality Culture Questionnaire: Automobile Industry. Imperial
Journal of Interdisciplinary Research, 3(9).