1. System of Profound Knowledge
Fundamentals of Total Quality Leadership
Module 3
System of Profound Knowledge
Lesson 1
Systems

2. At the end of this lesson the student will be able to:
Learning Objectives
At the end of this lesson the student will be able to:
Define system
Explain the relationship among systems, subsystems and processes
Identify elements of an extended system
Explain the concepts of optimization/suboptimization
Explain the importance of viewing an organization as a system
Explain the importance of measures in the extended system 2

3. DON Approach to Quality Management System of Profound Knowledge
Systems
Psychology
Variation
Knowledge
System of Profound Knowledge
14 Points
PDCA & Tools

4. What is a System?
Collection of interacting parts functioning as a whole
Collection of subsystems that support the larger system
Collection of processes oriented toward a common goal
The organization as a system 5

5. Systems and Subsystems
for
Defense y n
Army
Marines
Air Force
Navy

6. Organization as an Extended System
Consumer Research
Design and redesign
Suppliers of materials and equipment
A B C D
Consumers
Receipt and test of materials
Distribution
Production, assembly, inspection
Test of processes, machines, methods
(Deming, 1986) 6

7. Optimization of the Organization
Occurs when the aims of the subsystems or parts support the aims of the organization
May result in a delayed effect
Must be managed 7

8. Suboptimization of the Organization
Occurs when the aims of the subsystems or parts do not support the aims of the organization
Occurs when management fails to lead the organization as a system 8

9. Conditions Leading to Suboptimization
A lack of organizational aims
Improper recognition of people
Ineffective organizational design 9

10. Ways of Viewing the Organization
Organization as
a Black Box
Bits and Pieces
of Knowledge
Ways of Viewing the Organization

11. The Organization as a System, Subsystems, and Processes
Yes No
The Organization as a System,
Subsystems, and Processes

12. Extending Outside the OrganizationP L I E R
END

13. Stakeholders of the Extended System
End-user
Suppliers
Long-term
feedback
Feedback
Yes No
Environment
Internal

14. Measures in the Extended System
Processes
Inputs
Outputs
Outcomes
Product or
service
End-user
Supplier
Measures in the
Extended System
Machines
Methods
Material
People
Environment

15. Extended System Example
BUPERS
Pubs/Forms Ctr
Supply Center
Legal
Post Office
Message Center
MWR
DFAS
ISIC
Employees
Admin
Travel
Transportation
Customer Svc
Disbursing
COs of Cmds
serviced
Active Duty
Retired pers
DON Civs
Dependents
UAs
Deserters
Suppliers
Internal
End-users
Environment
Host base, local community, DOD
Congress, DON, OSHA, EPA, BRAC
Personnel Support Detachment (PSD)

16. Measurements in the Extended System
Outputs
Outcomes
Processes
Inputs
BUPERS
Pubs/Forms Ctr
Supply Center
Legal
Post Office
Message Center
MWR
DFAS
ISIC
Employees
Admin
Travel
Transportation
Customer Svc
Disbursing
COs of Cmds
serviced
Active Duty
Retired pers
DON Civs
Dependents
UAs
Deserters
Timely service
Accurate pay
Accurate prsnl svcs
Accurate travel svcs
Flexible transport’n
Responsive to needs
Courteous service
Correct check
issued on time
Correct direct
deposit by
payday
Accurate processing
of SDS changes
Corrections to ECCO
system w/in 3 days
Change info fm
svc mbr
Docs fm svc mbr
DK training
Computer access
Suppliers
Internal
End-users

17. Lesson Summary
It is important for managers to view the organization as a system
Everyone must work toward the aims of the organization to avoid suboptimization
Boundaries of a system extend beyond the organization itself (customers, suppliers) 21